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TMI Blog2017 (5) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... from M/s Sumukh Corporation. The issue raised in ground No.3 is against the confirmation of application of GP rate at the rate of 2% of the alleged bogus purchases which worked out to Rs. 18,720/-. Both these grounds are being adjudicated together. 3. Facts of the case in brief are that during the course of assessment proceedings, on random checking of the books of accounts, it was observed that the assessee had purchased goods from M/s Sumukh Corporation which were not appearing in the details of parties/suppliers from whom the purchases were made by the assessee. Accordingly, the AO called upon the assessee to prove the genuineness of the transactions, produce bills/challans of transporters, which were not produced. Moreover, these purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O was not doubting all the purchase but doubting only selected purchases for which he had doubt or information as the case may be. The evidence in respect of identity of person responsible for issuing purchase bills was within the knowledge of the assessee or with its employees as subsequently the payments must have been made. The A.G. had specifically mentioned that the said purchases were credit purchases. The bill indicate terms and conditions as 45 days and the bill also states that interest will be charged @ 24% p.a., if the bill is not paid on presentation. There is no evidence that payment was made within 45 days and if it was made subsequent thereof, any interest was paid as per this stipulation laid down in the bill. If the payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to the overall facts of the case, I find no reason to interfere with the order of the AO of the issue in dispute and in result impugned addition made by the AO stands confirmed. 4. We have carefully considered the rival contentions, perused the material placed before us including the orders of authorities below and case law relied upon by the parties. We find that the FAA upheld the addition made by the AO on account of bogus purchases that the assessee could not produce the bills, transport receipts, details of the said purchases, whereas, on the other hand the ld.AR submitted that the total purchases of the assessee during the year were Rs. 8,23,42,226/- and the sales were to the extent of Rs. 1,32,99,36,208/-. The ld. AR submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Rules. 6. The ld. AR vehemently submitted before us that the FAA uphold the order of the AO on this issue by following the decision of the Jurisdictional High Court in the case of „Godrej & Boyce Manufacturing Co. Ltd.‟ 328 ITR 81(Bom) and other decisions that the provisions of section 14A r.w.r.8D was clearly applicable to the case of the assessee and the disallowance was rightly made and accordingly upheld. The ld. AR vehemently submitted before us that the FAA has grossly erred in sustaining the addition of Rs. 1,84,741/- without going into the facts on records. The ld. AR argued that the assessee deployed its own funds which were far more than the investments made in shares and securities on which the assessee earned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at page 8 of the paper book. We, therefore, are of the considered view that in view of the ratio laid down in the case of HDFC Ltd (supra) and Reliance Utilities(supra), wherein the Hon‟ble Jurisdictional High Court has clearly held that the when the assessee own funds are more than the investments made in the shares and securities made out of own funds, there is no need to disallow the expenditure u/s 14A of the Act r.w.r.8D of the Rules. We therefore, following the decision of the Hon‟ble Jurisdictional High Court in the above mentioned cases set aside the order of ld.CIT(A) on this issue and direct the AO to delete the additions of Rs. 1,36,549/-, whereas the disallowance of Rs. 48,202/-made under section 14A of the Act read ..... X X X X Extracts X X X X X X X X Extracts X X X X
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