TMI Blog2014 (3) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... retained portion by giving cogent reasons - the assessee could produce before the authorities the precise rate at which the purchases were made from M/s. Vishal Traders and other suppliers to demonstrate that the purchases made on the same day carried the same price - This would substantially eliminate the angle of the purchase price being artificially inflated - the Tribunal also noted other parameters such as higher net and gross profit rates of the present year compared to the earlier years of the recent past – thus, no question of law arises – Decided against Revenue - Tax Appeal No. 844 of 2013 - - - Dated:- 10-2-2014 - Akil Kureshi And Sonia Gokani,JJ. For the Appellant : Mr. MR Bhatt For the Respondent : Mr B. S. Sopa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al has substantially erred in holding that provisions of Section 40A (3) of the Act are not attracted to the cash purchases of Rs. 61,67,077/- claimed to have been made from other parties ? Issue pertains to addition of Rs. 61.67 lakhs [rounded off] made by the Assessing Officer in case of the respondentassessee for the A.Y 2007-08. The respondentassessee is in the business of manufacturing and exports of deoiled cake, starch, glucose and cotton yarn. For the year under consideration, the Assessing Officer examined various purchases made by the assessee for the purpose of production of edible oil, and in particular, purchases said to have been made from one M/s. Vishal Traders of Virpur came up for consideration. The Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Commissioner of IncomeTax, reported in [2009] 316 ITR 274 (Guj). Revenue as well as assessee both carried this issue in appeal before the Tribunal. Revenue urged that the entire purchases were bogus and therefore Assessing Officer s order adding the entire amount to the income of the assessee should be restored. Assessee contended that the purchases were genuine and the payments were made through cheques, no disallowance therefore should be made at all. The Tribunal in the impugned judgment noted that the GP rate and the net profit rate of the year under consideration were better than the previous year. The stock register was properly maintained and the purchases in question were reflected in such stock register and finding that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly upon credit of the cheques, withdrawn the amount by bearer cheques. On such basis, the Tribunal had held that such parties were creation of the assessee itself for the purpose of banking purchases into books of account because the purchases with bills were not feasible. The Tribunal therefore, observed that such parties became conduit pipes between the assesseefirm and the sellers of the raw materials. It was on this basis that 25% of the purchase price was added by way of income of the assessee observing that possibility of inflating the price of the raw material cannot be ruled out. It was this decision that this Court upheld. In the present case, though it may appear that the purchases have been shown to have been made through M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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