TMI Blog2016 (1) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... ties and, if the AO finds that the GP disclosed in respect of purchases from these three parties is lower than the GP disclosed in respect of other undisputed purchase, addition should be made to that extent only. We direct accordingly. - Decided partly in favour of assessee - ITA Nos.4154&4155/Mum/2010, ITA Nos.4374/Mum/12, ITA No.57 to 61/Mum/2012, ITA Nos.5436, 5437/Mum/2010, ITA Nos.4960/Mum/2012, ITA Nos.35, 37/Mum/2012, ITA Nos.43 to 45/Mum/2012 - - - Dated:- 28-10-2015 - SHRI JOGINDER SINGH, JM and SHRI R.C.SHARMA, AM For The Revenue : Shri M.Rajan For The Assessee : Shri Prakash Pandit and Mrs. Prachi Pandit ORDER PER BENCH These are the cross appeals filed by the assessee and revenue against the order of CIT(A)-16, Mumbai dated 29-2-2012, for the assessment years 2002-03, 2003-04, 2004-05, 2005-06, 2006-07, 2007-08, 2008-09 2009-10, respectively, in the matter of order passed under Section 143(3) r.w.s.147of the I.T. Act. 2. Common grounds have been taken in all the years under consideration, therefore, all the appeals were heard and are now decided by this consolidated order. 3. At the outset ld. AR did not press the ground raised with regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in various fictitious names) and then withdraw cash from the said bank to be handed over to their 'customers' after deducting their commission. From the documents impounded during the course of survey in the above cases, and also from the details of purchases submitted by the assessee during the course of assessment proceedings, it is ascertained that during the previous year relevant to A.Yr. 2002-03, the assessee had availed accommodation bills (sales bills) from the above assessees for the following amounts:- 1. M/s. Manoj Mills ₹ 5,52,666/- 2. M/s. Astha Silk Industries ₹ 12,81,449/- 3. M/s. Shree Ram Sales Synthetics ₹ 11,06,968- Total ₹ 29,41,083/- 6. Since these are only accommodation bills to the extent of ₹ 29.41,083/-, the AO held that assessee s purchases are inflated to that extent and profit is suppressed accordingly. Since, purchases to the extent of ₹ 29.41,083/- are bogus and inflated, AO a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der itself that appellant must have purchased goods from open market, outside the books of account and to cover up the said purchases, obtained hawala bills. Hence, this clearly shows that there are purchases by the appellant - although now disputed and its consequent sales - which has been offered for taxation by the appellant. 3.2(b) The above facts clearly show that the AO could not have treated the entire purchases of ₹ 29,41,083/- as unexplained when AO has observed in para 19( c)(iii) of the assessment order itself that these purchases could possibly have been made outside the book for then the 'peak investment' and circulation of the same will have to be considered and benefit of same given to the appellant - which has not been done by AO. 3.2(c) Further, the Ld. Counsel for the appellant controverts the above alternative of 'peak investment' and circulation of same by stating that in his case all the payments have been made by cheques and all the goods are fully accounted for and merely because the other parties viz. Mr. Rakeshkumar Gupta proprietor of Manoj Silk Mills, Mrs. Hema Gupta, proprietress Shree Ram Sales Synthetics arid Mr. Moh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n margin with them, so appellant cannot be given the benefit of the fact that the purchases even if made from the open market were from explained funds and payments being by cheques no addition can be made on this account. This has been done by the Hon'ble ITAT in the following cases of (i) Shanti Kumar Chordia Vs ACIT ITAT Jaipur 'A' Bench 128 IfJ (JP) 708 and (ii) ITO Vs Sunsteel, Hon'ble ITAT Ahmedabad 'B' Bench 92 TTJ (Ad) 1126. A!so, the difference in GP rate on goods sold for which purchases are not disputed and goods sold on which purchases are disputed, will also need to be added back and which is as follows :- GP as per books on undisputed purchase 15.11% GP only on sales relating to purchases from 3 parties - Mr. Rakeshkumar Gupta proprietor of Manoj Silk fviills, Mrs. Hema . Gupta, proprietress Shree Ram Sales Synthetics and Mr. Mohit Gupta the proprietor of Astha Silk Industries 13.18% Hence, the difference of 15.11%- 13.18% which comes to 1.93% should be the GP addition relating to the disputed purchases of ₹ 29,41,083/- (stated by appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments to substantiate the claim of purchases, these are not actual purchases, especially, when the said group concerns have disclosed their modus operandi of business that they issue only accommodation bills and get commission on that and in order to co-relate the sales bills issued, the purchase bills are prepared by themselves by getting the bill books printed in various fictitious firms. In view of the above, the AO concluded that the assessee has availed accommodation bills for an amount of ₹ 2941083/- . The AO further observed that the modus operandi of the said group concerns are that they issue accommodation bills and receives cheque payments. On realization, cash is withdrawn either from the disclosed concerns or from fictitious purchase concerns' account operated by the Group and handed over to the customers - seller parties (assessee and others) after deducting commission. There was neither any real purchase nor sales but merely issuing of hawala sales bills. Accordingly, the AO made addition of ₹ 29,41,083/- in respect of these three parties on account of accommodation bills. The CIT(A) has dealt with the quantitative details of purchase and sales and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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