TMI Blog2017 (9) TMI 1575X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal for the Assessment Year 2007-08 and delete the entire addition of bogus purchases though vehemently relied upon by the Learned Counsel for the assessee. On a careful reading of the observations of the decision of the Ld.CIT(A) we do not find any valid reason to interfere with the findings and decision made by the Ld.CIT(A) in estimating the Gross Profit on such bogus purchases. However, in respect of the percentage adopted by the Ld.CIT(A) towards initial investment of capital on these purchases at 20% is on higher side. Thus, we direct the Assessing Officer to modify this percentage to 10% instead of 20% adopted by the Ld.CIT(A). Except for this percentage there is no infirmity in the order passed by the Ld.CIT(A) - Decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l these Assessment Years the purchases made by the assessee from Shri Rakesh Kumar Gupta have been considered as non-genuine based on the statement given by the Shri Rakesh Kumar Gupta in the survey proceedings conducted in his premises. The Learned Counsel for the assessee submits that, Rakesh Kumar Gupta has retracted the statement subsequently and therefore in the absence of any corroborative evidence except for the statement by Rakesh Kumar Gupta there is no justification in treating the purchases as non-genuine when the assessee has submitted all the evidences of purchases in the course of assessment proceedings. The Learned Counsel for the assessee referring to Page No.83 to 88 of the Paper Book submits that on similar circumstances t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the assessee could not prove the delivery of goods the entire purchases have to be treated as bogus purchases and accordingly the Assessing Officer is justified in treating entire purchases as bogus purchases. 6. We have heard the rival submissions, perused the orders of the authorities below. The Tribunal by common order dated 17.10.2013 for the Assessment Years under consideration restored the issue to the file of the Assessing Officer to prove the genuineness of the purchases and sale transactions and to produce evidences to show that the transaction in question are backed by actual delivery. In the re-assessment proceedings, the assessee expressed its inability to produce any documents regarding the mode of delivery of the materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he parties by cheque were deposited in bank and encashment the same was returned to the persons minus the commission. Based on above, the addition of ₹ 28,72,536/- has been made treating the entire purchases as unexplained. It is observed from the assessment order itself that the appellant must have purchased goods from open market, outside the books of 6 account and to cover the said purchases obtained Hawala bills. Therefore, it can be concluded that the appellant has made purchases although these were now disputed one. Therefore, the peak investment outside books of accounts has to be considered and benefit of the same required to be given to the appellant which has not been done by the A.O. In such type of cases where ore party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by the-appellant to the three parties namely Shri. Rakeshkumar Gupta, Mrs. Hema Gupta and Shri. Mohit Gupta have been enchased after in short time. This is also because, the said initial investment must have been re-circulated / rotated in making purchase. Accordingly, the total addition being unexplained investment is ₹ 5,76,173/- and GP addition of ₹ 8,354/- aggregating to ₹ 5,84,527/- is confirmed and the balance of ₹ 22,88,009/-(28,72,536 - 8,354) is deleted. This ground is therefore partly allowed. 8. The Ld.CIT(A) made similar calculations for the other two Assessment Years and arrived at the disallowance of ₹.16,09,2010/- and ₹.9,42,434/- for the Assessment Years 2008-09 and 2009-10 re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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