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2017 (5) TMI 203 - AT - Income TaxBogus purchases - invoices were incomplete with respect to details of transportation etc. - Held that:- Prima facie, it appears that the addition has been made solely on the basis of information received from the Sales Tax department and statement made u/s 133A by the MD of assessee company during survey operations. Therefore, we find lapses on both the sides. The Tribunal, invariably, in all such cases, have taken a stand that even if presuming that all purchases were bogus, entire addition thereof was not warranted for particularly when the sales were not in dispute and the accounts of the assessee were audited and the assessee provided quantitative details to a reasonable extent and the addition, if any, which has to be made in all such cases is to account for profit element embedded in such purchase transactions. Therefore, after due discussion with both the representative, we estimate the addition @12.5% of bogus purchases of ₹ 6,72,98,528/- which comes to ₹ 84,12,316/-. Hence, addition to that extent is confirmed. - Decided partly in favour of assessee Addition on account of Service Tax Liability u/s 43B - Held that:- Respectfully following the jurisdictional High Court in CIT Vs. Ovira Logistics Private Limited [2015 (4) TMI 684 - BOMBAY HIGH COURT ] Rigor of Section 43B do not apply in case the liability to pay service tax did not arise as per the relevant Service Tax Rules notwithstanding the fact that the same was shown as outstanding in the books of accounts and remained unpaid. Therefore, in principle, we agree with the contentions of the Ld. AR and therefore, deem it fit to restore the matter back to the file of Ld. AO for limited purpose of verification of the fact that the service tax liability shown as outstanding at year end and remaining unpaid was actually not payable as per service tax rules. If so, the impugned additions shall stand deleted.
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