9911796707
TMI Blog2017 (9) TMI 1341X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer relating to bogus purchases. The assessee is aggrieved by the decision of the learned CIT(A) in confirming the addition to the extent of 10%. 3. We heard the parties and perused the record. The assessee is engaged in construction business. It filed its return of income for the year under consideration declaring a total income of Rs. 643.25 lakhs. The Department carried out a survey operation on 9.2.2011 and during the course of survey, it was noticed that the assessee has recorded cash transaction in the form of cash receipts pertaining to scrap sales, charges for amenities provided and onmoney received against sale of flats. The assessee made a voluntary disclosure of Rs. 501.00 lakhs during the course of survey and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the Assessing Officer did not examine or make any comment upon the evidences produced by the assessee during the course of assessment proceeding. It was also submitted that the Assessing Officer has made addition without making any further inquiry or bringing any material on record to prove that the transactions were not genuine. It was contended that the Assessing Officer was not justified in making the addition of Rs. 584.43 lakhs. The assessee also placed reliance on various case laws to contend that the Assessing Officer could not make any addition merely on the basis of information received from the Sales Tax Department. 6. The assessee further contended that the Assessing Officer did not furnish copies of statement and also di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also submitted that payments were all made through banking channel and the delivery of materials were supported by delivery challans. It is stated that the A.O. had made addition on the basis of information received from VAT authorities without affording opportunity of cross examination to the assessee. It is noted that the entire matter pertains to hawala purchases from so called suspicious dealers as per the information of VAT authorities. The A.O. has disallowed these purchases as the assessee could not produce these parties for verification. It is noted that primary onus to establish that the purchases were genuine was on the assessee. The assessee is only partly able to discharge the complete onus. It is also noted that A.O. has simply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese grounds of appeal are partly allowed". 8. Before us, the Ld D.R placed strong reliance on the order passed by the AO. On the contrary, the Ld A.R submitted that there was no scope for sustaining addition to the extent of 10%, since the assessee has furnished all the details including the receipt and consumption of goods. The Ld A.R further submitted that these materials have been included in the Work in Progress and the assessee has been declaring income under Percentage completion method. Accordingly he submitted that the addition, if any, sustained will go to reduce the value of Work in Progress only. 9. We have heard rival contentions and perused the record. Since the assessee has furnished the details of receipts and consumption ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... around 4%. It was submitted that the suppliers caught hold of the suppliers, since they failed to pay VAT collected from the parties. Hence the presumption is that the assessee might have saved VAT amount in those cases. Considering the fact that there is a possibility for the assessee to source the materials at a lower rate also, we are of the view that the profit element embedded in the alleged bogus purchases may be fixed at 8%. Accordingly we modify the order passed by Ld CIT(A) and direct the AO to estimate the profit element at 8% of the value of alleged bogus purchases. 11. The Ld A.R submitted that all the purchases have been included in the Work in Progress, since the concerned project was under construction. In that case, there i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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