TMI Blog2016 (6) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... scapement of income. In our view, it cannot be said that the assessing officer has reopened the assessment in a mechanical manner. Accordingly we uphold the order of Ld CIT(A) passed on this issue. - Decided against assessee Addition of gross profit at 30% of non-genuine purchases - Held that:- AO has not given any basis for adopting the profit rate at 30%. Since the assessee was contending that the purchases were genuine one, it did not have an opportunity to advance its arguments with regard to the rate of 30% adopted by the AO. Accordingly, we are of the view that the assessee should be provided with an opportunity to advance its arguments on the rate of profit estimated by the AO. Accordingly we set aside this matter relating to esti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act on 10.3.2014. The assessee objected to the reopening, after obtaining reasons there for and the Assessing Officer also disposed of the objection raised by the assessee. 3. During the course of assessment proceedings the Assessing Officer issued notice u/s. 133(6) of the Act to the supplier of goods but all the notices were returned by the postal authorities with the postal remarks unclaimed/left . Hence the Assessing Officer asked the assessee to produce the supplier along with the entry register, lorry receipt of purchase of goods, stock register etc. The Assessing Officer asked the assessee as to why these purchases should not be taken as bogus. The assessee could not produce the parties but simply stated that it has made payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly the Assessing Officer proceeded to estimate the profit that the assessee would have made on impugned purchases (difference between the value shown in accommodation bills and the actual purchase cost in grey market) and estimated the same at 30% of the purchase value. Accordingly he added a sum of ₹ 90.86 lakhs to the total income declared by the assessee. 4. Before learned CIT(A) the assessee challenged the validity of reopening of the assessment and also the profit estimated and assessed by the Assessing Officer. However, the contentions of the assessee did not find favour with learned CIT(A) and he accordingly upheld the validity of reopening of assessment and also upheld the addition made by the Assessing Officer. Aggrieved, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received by the AO was sufficient to form belief that there was escapement of income. In our view, it cannot be said that the assessing officer has reopened the assessment in a mechanical manner. Accordingly we uphold the order of Ld CIT(A) passed on this issue. 8. The next issue relates to the addition of profit estimated on the bogus purchases. The Ld A.R submitted that the assessee could not furnish lorry receipts before the AO, since the goods were transported directly from the suppliers place to the Customers place. He submitted that the assessee has made payments by way of account payee cheques and further the rate of Gross Profit and Net Profit declared by the assessee was consistent with that show in the past several years. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the expenses is placed upon the assessee and we notice that the assessee has failed in discharging those burden. Before us also, the assessee could not furnish evidences for transportation of goods except stating that the goods were transported directly from the suppliers place to the customers place. Under these set of facts, we are of the view that the AO was justified in rejecting the books of account maintained by the assessee. 11. We notice that the assessee could not substantiate its contentions that the goods were transported directly from suppliers place to the customers place by producing any other evidence or confirmation from the customers. Since the suppliers were claimed to have been trading in steel products, they should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t footing and hence the decisions have been rendered by the Tribunal depending upon the facts prevailing in each of the case. Since there is no parity of facts, we are of the view that those decisions may not come to the help of the assessee. 13. However, we notice that the assessing officer has not given any basis for adopting the profit rate at 30%. Since the assessee was contending that the purchases were genuine one, it did not have an opportunity to advance its arguments with regard to the rate of 30% adopted by the AO. Accordingly, we are of the view that the assessee should be provided with an opportunity to advance its arguments on the rate of profit estimated by the AO. Accordingly we set aside this matter relating to estimation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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