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2017 (6) TMI 514 - AT - Income TaxDisallowance of purchases u/s 69C - Held that:- The assessee was one such person to whom the sales were made by the parties who were enlisted by the Sales Tax Department as hawala dealers - AO during assessment asked assessee to produce the said parties for verification alongwith supporting bills along with related details i.e. delivery challans for the goods, receipts from octroi paid - assessee expressed his inability to produce the parties and the bills - since the parties were blacklisted by the Sales Tax Department thus the purchases from them would be treated as bogus and not genuine - merely because the assessee is able to produce the purchase bills evidencing the VAT charged to the assessee, does not establish the factum of purchases being made by the assessee - the assessee has not maintained any stock details Before the CIT(A), the assessee submitted that if most of the purchases are unverifiable GP rate could be applied to make the addition - assessee claims that the purchases were made in the regular course of carrying on the business from parties who were registered with the Sales Tax Department and had VAT number - also VAT collected by the said dealers has not been deposited with the Sales Tax Department, assessee voluntarily revised his return under MVAT Act by withdrawing the set off of claim in the earlier return and paid the taxes with interest - hence CIT(A) is confirmed in estimating the addition @10% of alleged hawala purchases In the case of M/s. Chhabi Electricals Pvt. Ltd - the AO before making the addition has not even supplied the copy of statement to establish that the purchases made by the assessee were bogus thus no additioncan be made in the hands of assessee - assessee has established the trail of goods purchased to the final consumption hence no additions by Ao - Decided in favor of assessee In the case of Maa Saraswati Steel Industries - The assessee was also maintaining inward records of goods purchased and their consumption in items, which are excisable in nature - hence no additions by Ao - Decided in favor of assessee In case of Mahendra Shantilal Chaturmutha - no copy of statement was supplied to establish that the purchases made by the assessee were bogus thus no additioncan be made in the hands of assessee - Decided in favor of assessee In the case of M/s. Anant Chemicals - copy of statement was supplied - The CIT(A) applied higher GP rate to estimate the income in the hands of assessee on account of bogus purchases - Decided against the revenue.
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