TMI Blog2016 (2) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... noted that since he had directed the adoption of net profits @ 2% further adhoc disallowance would result into double disallowance. Before us, apart from other findings, the observation and finding of CIT(A) of double disallowance has also not been controverted by the Revenue. - Decided in favour of assessee Addition u/s.68 - Held that:- CIT(A) correctly deleted the addition as the appellant had filed a confirmation from the parties wherein the parties confirmed their account with the appellant. Since the opposite party has confirmed to give the said sum to the appellant, the addition made by the AO in this regard is directed to be deleted correctly. - Decided in favour of assessee - ITA No. 1339/Ahd/2012, CO No. 139/Ahd/2012 - - - Dated:- 30-11-2015 - Anil Chaturvedi, AM And S. S. Godara, JM For the Appellant : Shri Nagendra Singh, Sr. D.R. For the Respondent : None ORDER Per Anil Chaturvedi, Accountant Member These two appeals of which one is filed by Revenue and the other i.e. Cross Objection by Assessee are against the order of CIT(A), Valsad, dated 30.03.2012 for the assessment year 2009-10. 2. The relevant facts as culled out from the materials ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer noticed that assessee has stated to have made purchase of waste paper amounting to ₹ 8,40,55,496/-. The Assessee was asked to furnish details so as to prove the genuineness of the purchase. Assessing Officer noted that despite various opportunity granted by him, Assessee did not produce the purchase bills for verification but only submitted the break up of purchases as URD purchases and RD purchases. Assessing Officer, therefore, concluded that in the absence of details of purchases, Assessee has failed to substantiate the genuineness of purchase. He accordingly considered 15% of the total purchase amounting to ₹ 1,26,08,324/- as being non genuine and unverifiable and added the same to the income. Aggrieved by the order of Assessing Officer, Assessee carried the matter before the ld.CIT(A) who after considering the submissions of the assessee decided the issue by holding as under: 6. I have perused the findings of the AO and the submissions made before me by the appellant. The appellant is a trader in waste paper and is purchasing the Waste paper and other similar scraps from small time vendors who are popularly known as raddiwallas. Such raddiwallas col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manipulated sale price is not established nor can be inferred. There is no circumstantial evidence to conclude that the waste paper supplier have higher than normal gross margin on sales only because they purchase from small time scrap vendors. 6.2 Further it was also brought to my notice that in the Central Circle, Surat (dealing with search assessments) similar cases were assessed during the calendar year 2011 wherein the assessing authorities considered all facts of the case which is very similar to the facts of the case of this case and have estimated the gross profit and made an addition of 0.5% to 0.75 % of the turnover as income on the basis of same facts and issues in dispute. 6.3 The appellant had furnished quantitative details of purchases and stock along with the tax audit return and has disclosed a sum of ₹ 20,72,841/-as gross profit which works out to 2.40 % of the total turnover. On consideration of the nature of the business the assessing officer doubted the profitability of the trading results of the appellant. As a result the AO completed the assessment by disallowing a portion of the purchase value of the appellant. I am of the considered opinion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GP/NP is lower. In this case the appellant had shown GP/NP at 2.2%/o.95% respectively. Thus, applying the general rule, in my considered view, the N.P. estimated at 2% as against 0.95% disclosed by the appellant will meet the justice. Accordingly, the AO is directed to adopt NP at the rate 2% for determining the taxable income in this case. This ground of appeal is partly allowed. 5.2 Aggrieved by the order of ld. CIT(A), Revenue and Assessee both are in appeal before us. 5.3 Before us, ld. D.R. pointed to the various observations made by the Assessing Officer and supported the order of Assessing Officer. 5.4 We have heard ld. D.R. and perused the material on record. The issue in the present case is with respect to addition on account of unverifiable purchases. It is undisputed fact that assessee did not produce the copy of purchase bills and other supporting documents before the Assessing Officer. Further, there is nothing on record to show that assessee had produced copy of purchase bills and other documents before CIT(A). It is also a fact that Assessing Officer on one hand has accepted the sales arising out of the impugned purchases and on the other hand out of the to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the Honorable Jurisdictional high court as relied upon by the appellant. Moreover, while dealing with the Ground No.1 above the AO is directed to adopt 2% NP in this case. Hence, the disallowance raised in this ground will amount to double disallowance if adhoc disallowance if confirmed. Therefore, the AO is directed to delete the disallowance made on presumptive basis and this ground of appeal is accordingly allowed. 6.2 Aggrieved by the order of CIT(A), Revenue is now in appeal before us. Before us, ld. D.R. supported the order of Assessing Officer. 6.3 We have heard the ld. D.R. and perused the material on record. We find that ld. CIT(A) while deleting the addition has noted that since he had directed the adoption of net profits @ 2% further adhoc disallowance would result into double disallowance. Before us, apart from other findings, the observation and finding of CIT(A) of double disallowance has also not been controverted by the Revenue. In view of these facts, we find no reason to interfere with the order of CIT(A). Thus, this ground of Revenue s appeal is dismissed. Ground nos. 3 4 are connected and are with respect to deleting the addition of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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