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2016 (6) TMI 293 - ITAT MUMBAI

2016 (6) TMI 293 - ITAT MUMBAI - TMI - Bogus purchases - investigation conducted by the Sales Tax Department - CIT(A) was of the view that the estimation of profit on such bogus purchases has to be made @ 10.41% instead of 12.5% adopted by the AO - Held that:- The assessee in the course of assessment proceedings has produced documentary evidence to prove the genuineness of the purchases. It is also not disputed that the Assessing Officer has accepted the sales turnover disclosed by the assessee. .....

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addition made on account of estimation of profit by treating the purchases as bogus has no legs to stand. Accordingly, we delete the same. - Decided in favour of assessee - ITA No. 25/Mum./2016 - Dated:- 27-5-2016 - Shri Saktijit Dey, Judicial Member And Shri Ramit Kochar, Accountant Member For the Assessee : Shri Deepak Tralshwala For the Revenue : Shri Vishwas S. Jadhav ORDER Per Saktijit Dey, J. M. Instant appeal of the assessee is directed against the order dated 2nd November 2015, passed b .....

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₹ 1,47,584. In the course of assessment proceedings, the Assessing Officer found that as per the information available on record in the form of letter received from DGIT, who in turn, has received information from Sales Tax Department, the assessee has shown certain purchases from certain entities who provided only accommodation bills / entries, hence, they are bogus purchases. The details of such purchases are as under:- Name of the Party Amount (Rs. ) ISK Trading Co. 86,320 KRC Trading C .....

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d in providing accommodation bills. As observed by the Assessing Officer, during the assessment proceedings, the assessee was asked to furnish ledger account, copies of bills along with the payments made, documents relating to transportation and receipts of the goods purchases, copy of bank account, etc. As alleged by the Assessing Officer, though, the assessee submitted the ledger accounts of concerned parties, the bills and bank statements reflecting the payments made, however, the assessee di .....

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icer also observed that the assessee had agreed for a reasonable addition on such purchases. Accordingly, the Assessing Officer concluded the assessment by making an addition of ₹ 3,41,117, being 12.5% of the purchase turnover of ₹ 27,28,934. Being aggrieved of such assessment order, the assessee preferred appeal before the learned Commissioner (Appeals). 5. The learned Commissioner (Appeals), however, was of the view that since the investigation conducted by the Sales Tax Department .....

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ng Officer that the assessee has admitted for estimation of profit on the purchases the learned Authorised Representative submitted, the assessee in course of assessment proceeding has not made any such admission. As far as merit of the issue is concerned, the learned Authorised Representative submitted, in the course of assessment proceedings, the assessee has submitted all relevant and necessary supporting document such as purchase & sales bills, ledger account copies of concerned parties, .....

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r of the assessee, there is no reason to dispute the purchases, as in the absence of corresponding purchases, the assessee could not have effected sales. He submitted, absence of transportation bills cannot be the sole criteria for treating the purchases as bogus. The learned Authorised Representative submitted, the Assessing Officer, though, has relied upon the statement of the sellers of goods stated to have been given before the Sales Tax authorities, but the assessee was neither confronted w .....

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no.6727/Mum./2017, dated 20th August 2014; ii) ITO v/s Ashok Talreja, ITA no.4629/Mum./2014 & Ors, dated 17th March 2016; iii) ACIT v/s Ramila Pravinshah, ITA no.524/Mum./2013, dated 5th March 2015; and iv) CIT v/s Nikunj Exim Enterprises Pvt. Ltd., 372 ITR 619. 7. Learned Departmental Representative on the other hand relying upon the observations of the learned Commissioner (Appeals) submitted, since on the basis of information obtained from Sales Tax Department, it was found that the conce .....

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has agreed for a reasonable addition on the bogus purchases. In this context, on a query from the Bench to verify from the assessment records, whether any such admission by the assessee either in writing or by way of endorsement in order sheet is available, the learned Departmental Representative fairly submitted, no such admission by the assessee is available on record. That being the fact emerging from the record we proceed on the basis that no admission was made by the assessee in the course .....

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in the course of assessment proceedings had submitted the ledger account copies of the concerned parties in the books of the assessee, purchase and sale invoice and bank statement showing payment made to them but the Assessing Officer apparently ignoring these evidences has treated the purchases made by the assessee from the concerned parties as bogus solely on the fact that the concerned parties had admitted before the Sales Tax Authorities that they are providing accommodation bills. It is evi .....

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