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2016 (4) TMI 75

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..... - ITA No. 181/JP/2015 - - - Dated:- 12-2-2016 - SHRI T.R.MEENA, AM SHRI LALIET KUMAR, JM For The Assessee : Shri Tanuj Agarwal (CA) For The Revenue : Shri Kailash Mangal (JCIT) ORDER PER T.R. MEENA, A.M. This is an appeal filed by the assessee against the order dated 30/01/2015 of the learned CIT(A)-III, Jaipur for A.Y. 2009-10. The effective grounds of appeal are as under:- 1. That on the facts and in the circumstances of the case and in law, the ld CIT(A) grossly erred in sustaining an addition of ₹ 4,22,209/- made by the Assessing Officer towards alleged bogus purchases from the following parties. S. No. Name of the supplier Goods purchased description Amount of purchases Rs. Addition sustained 1 Devi Distributors Surgicare Operation Material 41,227 41,277 100 2 Karni Enterprises Diagnostic Material 3,80, .....

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..... icare Operational Material 41227 Karni Enterprises Diagnostic Material 380982 He further observed that the summon issued to Devi Distributors Surgicare and Karni Enterprises had not been served as the firm did not carry out any business from the specified address any more and no such address as specified in the letter existed as per Inspector s report dated 13/10/2011. During the course of statement recorded of Shri Rajendra Kumar Bhargava, Marketing Manager of M/s Bhargava Hi Tech Surgimed Co. Pvt. Ltd., he sent some of the items to the assessee through challans. These challans were not verifiable from the books of account of the assessee. Shri Bhargava admitted that surgical items were sent to M/s Sharma Hospital, Chomu by challan and some of the items recorded on the challans were returned back by the hospital due to non utilization in the hospital and when the items were received back by M/s Bhargava Hi Tech Surgimed Co. Pvt. Ltd., Jaipur then bill was issued to the assessee. The Assessing Officer held that there is no systematic recording of purchase in the books of accou .....

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..... is in appeal before us. The ld AR of the assessee has submitted that the ld Assessing Officer had not rejected the books U/s 145(3) while enhancing the operating result through disallowance of the entire purchases for which he relied on the decision of Hon ble ITAT, Jaipur Bench in the case of ACIT Vs M/s Bal Kishan Nyali HUF in ITA No. 1122/JP/2011 decided on 25/07/2014, wherein it has been held that the trading addition by way of estimating of yield cannot be done in absence of rejection of books of account. He further argued that the assessee had submitted purchase bill and challan issued by M/s Devi Distributors Surgicare containing their complete address, drug license No., sales tax registration number and other details. VAT has also been charged by the supplier on sales. The ld AR has drawn our attention on page No. 7 to 9 of paper book and argued that the assessee regularly purchasing goods from both the parties i.e. M/s Devi Distributors Surgicare and Karni Enterprises. The assessee had maintained proper books of account, which were audited and also produced during the course of assessment proceedings for verification. The ld Assessing Officer had not pointed out any s .....

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..... m both the parties as they have also charged VAT also and all the particulars of drug license number, sales tax registration number and addresses of the parties had been given on the bills. Therefore, in the interest of justice, we feel that 15% Net Profit is to be applied on the bogus purchases made by the assessee. Accordingly, this ground of assessee s appeal is partly allowed. 7. The 2nd ground of the assessee s appeal is against disallowance on purchase of X-ray films. The ld Assessing Officer observed that the assessee had not produced any purchase vouchers for ₹ 24,919/- for Xray films. Thus, he made addition of ₹ 24,919/- in the income of the assessee, which was challenged before the ld CIT(A), who had confirmed the addition by observing that the assessee had failed to prove the genuine ingredients of such expenses for the business purposes either during the assessment proceedings or during the appellate proceedings. Inasmuch as, even the basic bills in respect of such purchases had not been produced. The AR of the assessee reiterated the same argument as made for ground No. 1 of the appeal. Further it is claimed by him that in absence of X-ray films, X-ray m .....

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..... e amounts were found credited in the books of account during the assessment year under consideration and no proper explanation was furnished with the documentary evidence with reference to such credits. Therefore, he confirmed the addition. 9. The ld AR of the assessee has contended that the provisions of Section 68 of the Act had been applied to the purchase made on credit. Section 68 can be applied to any sum found credited in the books of account, source of which cannot be explained by the appellant, for which he relied on the decision of the Hon ble Allahabad High Court in the case of CIT Vs. Pancham Dass Jain (2006) 205 CTR (All) 444 wherein it has been held that the provisions of Section 68 would not be attracted on the purchase made on credit. He has further drawn our attention on copies of purchase bills, confirmation and copy of ledger account in the paper book. The lower authorities also ignored the aspect of human conduct and probabilities. In the case of M/s Santosh Battery Service, the transaction was ₹ 6200/-, no transaction was done during the relevant year, amount outstanding pertained to earlier year. Therefore, same cannot be added U/s 68. The ld DR has v .....

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