TMI Blog2017 (3) TMI 948X X X X Extracts X X X X X X X X Extracts X X X X ..... chases is not justified as it will result in impossible gross margin. However, we find that at the same time it is also necessary for the assessee to maintain proper supporting documents to satisfy the assessing officer regarding the veracity of the purchases. In these circumstances in our considered opinion a 15% disallowance out of the impugned purchases would serve the interest of justice. The Ld. Counsel of the assessee fairly agreed to this proposition. Accordingly, we direct the Assessing Officer to disallow of 15% out of the purchase of ₹ 73,84,489/- - ITA no.1851/Mum./2015 - - - Dated:- 15-3-2017 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER For The Assessee : Shri. V.G. Ginde For Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove grounds of appeal, or to add one or more new ground(s), at or before the hearing of this appeal, as may be necessary. 3. Brief facts of the case as under; In the assessment order the assessing officer noted that information was received from the Sales Tax Department, Maharashtra, which gave names and addresses and other relevant details of certain persons who had provided entries for bogus purchase bills to a large number of tax payers. This information also contained the details of the beneficiaries of such bogus bills. The persons who had provided entries to the various beneficiaries had also filed affidavits before the Sales Tax Department, stating therein that they have merely provided entries to these beneficiaries and tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchases claimed from these three parties and consequently, squarely admitted for re-computation of the assessee company s income for the year under consideration by including the amount of bogus purchases reflected from these three parties. 5. Up on assessee s appeal Ld. CIT-A considered the submissions but did not agree with the same. He concluded as under: The information received from the sales tax department cannot be taken as without any evidentiary values. The Sales Tax Department has taken action against the Hawala dealers as per Sales Tax Act, therefore, the plea taken by the appellant that these hawala dealers were branded as bogus only because they have evaded sales tax/VAT is also not acceptable. The reasons being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirmed the addition made by the AO and dismissed the appeal of the appellant. 6. Against above order assessee is in appeal before us. We have heard both the counsel and perused the records. Ld. Counsel of the assessee submitted that, although it is true that assessee could not satisfy the assessing officer regarding evidences of the receipt of goods, it cannot be presumed that the assessee could execute the order or carry on the works without actually purchasing the necessary materials. He submitted that it is settled law that when sales are not disputed the corresponding purchases for the same cannot be treated as bogus. Ld. Counsel submitted that the addition by the AO would result in a gross profit of 56%, which would be totall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in impossible gross margin. However, we find that at the same time it is also necessary for the assessee to maintain proper supporting documents to satisfy the assessing officer regarding the veracity of the purchases. In these circumstances in our considered opinion a 15% disallowance out of the impugned purchases would serve the interest of justice. The Ld. Counsel of the assessee fairly agreed to this proposition. 8. Accordingly, in the background of aforesaid discussion we direct the Assessing Officer to disallow of 15% out of the purchase of ₹ 73,84,489/- 9. The ld. Counsel of the assessee did not press for the ground number two. Accordingly, the same is dismissed as not pressed. In the result this appeal by the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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