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2012 (2) TMI 598 - ITAT AHMEDABAD

2012 (2) TMI 598 - ITAT AHMEDABAD - TMI - ITA No. 3238 and 3293/Ahd/2009 - Dated:- 24-2-2012 - Shri Mukul Kumar Shrawat, Judicial Member and Shri A Mohon Alankamony, Accountant Member By assessee Shri S.N. Soparkar, SR-AR & Ms. Urvashi Shodhan, AR By Respondent Shri Samir Tekriwal, SR-DR O R D E R PER Mukul Kumar Shrawat, Judicial Member:- These are cross-appeals filed by the assessee as well as Revenue arising from the order of Ld. Commissioner of Income-tax (Appeals)-II, Baroda dated 18-09 .....

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as also challenged that Ld. CIT(A) has erred in restricting the addition of ₹ 41,04,903/- to ₹ 12,31,471/-. These two appeals are connected to each other, hence consolidate and hereby decided by this common order. 4. Facts in brief as emerged from the corresponding assessment order passed u/s.143 r.w.s. 147 of the I.T. Act dated 31-12-2008 were that assessee individual is in the business of trading in steel on wholesale basis. It may not be out of place to mention that Gross Profit o .....

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ntilal Mangilal Sharma, Prop of Arun Industrial Corporation and as per the admission in their statements recorded on oath, it was found that no sales were made by them to any party. It was intimated that those parties were simply issuing sale bills against those sales bills they were receiving dalali . The modus operandi was that on issuance of sales bills the amount of cheque was received and on encashment of the said cheque after deducting dalali the balance amount was withdrawn in cash and re .....

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and other evidences AO has held that alleged purchases from Bhavna Trading Co., Minaxi Enterprise and Arun Ind. Corporation was not genuine purchase and therefore the said amount of bogus purchases of ₹ 41,04,903/- was taxed in the hands of the assessee. It may not be out of place to mention that books of account u/s.145(3) of the Act was rejected and profit of the assessee was estimated at ₹ 5 lakh. Both the additions were contested before the Ld. CIT(A). 5. After examining the boo .....

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was deleted, however, Revenue is not in appeal. 6. Ld. AR Mr. Soparkar has contested that the assessee has maintained the quantitative details of purchases and sale of steel. He has pleaded that the auditor has given the quantitative details as per the Special Auditor which confirms the maintenance of quantitative record. It was enquired from the Bench that whether the stock register and quantity-wise purchases and sales are available on record, however, the answer is negative. Further, it has .....

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e the seller parties on the other hand it claimed that it is not his responsibility to produce the seller. It is a settled law that onus is on the assessee to establish the genuineness of the purchase. The assessee has produced various evidence with regard to the receipt of the goods by it, it. Stock register, receipt of weigh-bride for weighment of goods purchased by the assessee, octroi receipt of the payment of octroi duty etc. After considering the entire material, we are of the opinion that .....

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f each case. In the case of Vijay Proteins, ITAT held that such benefit to be 25% and therefore sustained the disallowance for bogus purchase at 25%. In the case of Sunsteel (supra), the ITAT deemed it fit to sustain the disallowance for a lumpsum amount of ₹ 50,000/-. However, we find that in the case of Shri Anubhai Shivlal (supra) the ITAT has considered both the decisions in the case of Vijay Proteins and Sunsteel (supra) and thereafter sustained the disallowance at 12.5%. Relevant fin .....

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essee has shown purchases of ₹ 27,39,410/-, sale of ₹ 28,17,207/- and GP at ₹ 94,740/-. The Assessing Officer made the addition of ₹ 27,39,407/- for bogus purchases. If the above sum is added to the GP, the GP works out ₹ 28,34,1247/- which was more than the sale itself. The Tribunal held that6 it is impossible that the GP is more than the sale itself. The Tribunal also found that the assessee has maintained the quantitative details in respect of materials purchased .....

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55 TTJ (Ahd) 76. In the case of M/s. Vijay Proteins Ltd., the Tribunal has sustained the addition of 25% of the bogus purchases. However, considering the facts of the assessee s case the CIT(A) restricted the disallowance to 12.5% as against 25% made in the case of M/s. Vijay Proteins Ltd. From these facts it is evident that the CIT(A) has sustained the addition at 12.5% of the nongenuine purchases considering the facts of the assessee s case. We, therefore, do not find any justification to int .....

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