TMI Blog2013 (1) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 36(1)(iii) - Decided in favor of assessee - ITA No.179/Agr/2012 - - - Dated:- 29-1-2013 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER For the Appellant : Shri Pankaj Gargh, Advocate For the Respondent : Shri K.K. Mishra, Jr. D.R. ORDER PER A.L. GEHLOT, ACCOUNTANT MEMBER: This is an appeal filed by the assessee against the order dated 30.11.2011 passed by the ld. CIT(A)-I, Agra for the Assessment Year 2008-09. 2. The assessee has raised as many as 8 grounds of appeal, however, the ld. Authorised Representative submitted that ground nos.1 to 7 pertain to addition of ₹ 37,65,836/- on account of purchases from M/s. Gopal Enterprises and second effective gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... waroop Jain, Proprietor M/s. Jain Paper Mart. The statement was recorded on 04.12.2010. The A.O. after considering statement of Shri Ram Gopal Sharma and Mohan Swaroop Jain noticed that Shri Ram Gopal Sharma is an employee of the brother of the assessee and not an independent trader. The A.O. found that the assessee has failed to establish the genuineness and correctness of the purchases amounting to ₹ 38,68,137/- from M/s. Gopal Enterprises, therefore, books of account of the assessee was rejected invoking section 145(3) of the Act. The A.O. treated the entire purchase of ₹ 38,68,137/- as bogus purchase and made addition of the said amount. 4. The assessee made submission on merit as well as on alternate submission relyin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. held that the purchase was bogus as payment was made only for ₹ 7,50,000/- and the entire balance amount was shown as outstanding. Shri Ram Gopal Sharma in his first statement dated 25.10.2010 admitted that he has sold the goods to the assessee and the same has been declared in the Sales Tax return but in the second statement dated 11.11.2010 he denied about the outstanding amount of ₹ 31,18,137/- and also shown ignorance about the Sales Tax return filed by him. It is admitted fact that M/s. Gopal Enterprises has paid the Sales Tax on the said goods and the same has been declared before the Sales Tax Authority by filing Sales Tax returns. The A.O. made addition on surmises that Shri Ram Gopal Sharma is employee of the brot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to maintain 9% G.P. rate. Under the circumstances, we are of the considered view that the addition on account of bogus purchases is not warranted. Even if we consider the case from a different angle accepting the Revenue s contention that the assessee did not make purchases from M/s. Gopal Enterprises and as held as above that there is a positive evidence that purchases was in fact made, may be from other parties than M/s. Gopal Enterprises, in such circumstances, the formula laid down by the I.T.A.T. Ahmedabad Bench in the case of Vijay Protein (supra) is applicable. If we consider the formula that the assessee may get benefit of grey market, the assessee has already surrendered ₹ 5,00,000/-, may be on account of commission and o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded back to the income of the assessee. Assessee has furnished inaccurate particulars of income, the penalty proceedings is being initiated u/s 271(1)(c) of the I.T. Act. 9. The CIT(A) has confirmed the addition made by the A.O. 10. We have heard the ld. Representatives of the parties and records perused. Submissions of the assessee are that the assessee has raised loan of ₹ 8,00,000/- from Smt. Renu Jain on 31.03.2005. A loan of ₹ 13,00,000/- was further received. The loan was transferred to the partnership firm M/s. Jain International. Thus, the loan was used for the purpose of business. The assessee is proprietor of M/s. Jain international, Agra and partner in M/s. Jain International, Noida. The assessee has maintained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 65,737.00 Mr. Atul Sharma 18,500.00 Sahara Avas Yojna 10,000.00 Building Sanjay Place 75,250.00 Smt. Anuradha 15,000.00 Building Jatni Ka Bagh 115,300.00 Building Kanpur 154,975.00 Flat Advances 800,000.00 Plot Sikendra 400,000.00 Cash in Hand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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