TMI Blog2017 (3) TMI 1230X X X X Extracts X X X X X X X X Extracts X X X X ..... ansactions. CIT(A) also observed that the AO has also failed to discharge the responsibility cast upon under the Act. The AO has not disputed the books of accounts including the sales nor did verify or investigate the amount paid by way of cheques whether received by the appellant back from the purchasers. In our opinion, the ld.CIT(A) has rightly sustained the addition to the extent of 12% of the total purchases covering the leakages of revenue and also the possibility of savings which the assessee may have made by making purchases from gray market by not paying the regular and legal taxes of local bodies.- Decided against revenue - ITA No. 4120/Mum/2015 - - - Dated:- 20-3-2017 - Shri Mahavir Singh, JM And Shri Rajesh Kumar, AM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iddish Impex Pvt. Ltd. 27600648257V 2071782 3 Rushabh Enterprises 27120669570V 1136268 4 Atlas Enterprises 27710363744V 722824 5 Jainam Trade Corporation 27070656939V 100000 6 Mahavir Enterprises 27560556517V 250260 7 Jain Trading Corporation 27210156439V 664803 Total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xamination of that aspect has not created any doubt in terms of the purchases. However, as far as the evidence submitted by the appellant is also concerned, the appellant has filed his own books, purchase bills/challans, ledger account and its own bank statement to further his argument. The fact that the payments are being made through cheques is not something that is being doubted. In fact that is the contentious issue; that these parties which are indicated by the Sales Tax Department through a procedure which appears to be technically correct on paper, are in fact engaged in false billing for a fee/commission. The onus of proving the entire transactions to be genuine is definitely on the tax payer, when he is making the claim of purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the appellant. The Hon'ble Court have, therefore, held that when the total sale is accepted by the AO, then the entire purchase cannot be added to the income of the appellant. The Hon ble Court have, theefore, held that fair profit ratio would' be needed to be added back to the income of the assessee. Therefore, 12% of the purchases of ₹ 49,74,252/- which works ( out to ₹ 5,96,910/- is upheld for lack of credible evidence being provided by the appellant to substantiate the purchases. The appellant gets relief of ₹ 43,77,342/- 3. We have carefully considered the rival contentions and perused the material placed before us including the orders of authorities below. We find that out of total purchases, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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