2017 (10) TMI 820

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..... g total income of Rs. 15,28,744. The case has been selected for scrutiny and notices u/s 143(2) and 142(1) of the Act were issued. In response to notices, the authorized representative of the assessee appeared from time to time and produced relevant particulars, as called for. During the course of assessment proceedings, the AO noticed that the assessee has claimed purchases from M/s Rumit Enterprises and M/s Mumbai Trading Co for Rs. 1,99,87,304. The AO further observed that the above two parties are listed in the list prepared by Maharashtra Sales-tax department as hawala operators, who were involved in issuing bogus bills without actual delivery of goods. Therefore, the AO issued a show cause notice and asked to furnish necessary details .....

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..... the above goods purchased from the parties. The AO never disputed sales declared for the relevant financial year. No adverse comments has been made on the books of account or stock registers. When there is no finding as to the incorrectness of books of account or stock registers, purchases from the parties cannot be disputed merely on non service of notice and also relying upon information received from sales-tax authorities. The CIT(A), after considering relevant submissions of the assessee and also relying upon certain judicial precedents including the decision of ITAT, Ahmedabad Bench in the case of Vijay Proteins Ltd vs ACIT 58 ITD 428 (Ahd) directed the AO to estimate net profit at 25% of total purchases shown to have been made from t .....

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..... harashtra Sales-tax department. The parties have filed affidavit before Maharashtra Sales-tax authorities wherein they have admitted that they have not done any business, but only issued bogus purchase bills. All these facts clearly prove the fact that the above two parties are involved in providing accommodation entries without actual delivery of goods. Under these circumstances, purchases from these parties cannot be considered as genuine. At the same time, the assessee has filed necessary evidences in the form of purchase bills and payment proof to justify that the purchases from above parties are genuine. The AO has not disputed sales declared by the assessee. The AO, neither made any adverse comments on books of account nor found any i .....

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