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TMI Blog2017 (10) TMI 1249X X X X Extracts X X X X X X X X Extracts X X X X ..... ds. (3) The 25% of addition made on Accounts of five alleged Bogus suppliers amounting to Rs,40,62,462/- i.e. Rs. 10.15.615/- be deleted. (4) The AO has made addition on account of bogus purchases from Five arties without verifying the fact that the purchases were genuine and payment was also made through account payee cheque and the Income Tax Department has not proved that appellant has received any cash back from such parties. The sales of the appellant are also accepted by the Income Tax Department. Once the sales are accepted, purchases ought to have been made as without purchases there cannot be any sales. (5) The AO has made addition without making any independent enquiry. He has also not rejected the books of account u/s 145(3). (6) The AO ought to have given opportunity to the appellant for cross examination of the five parties. The Income tax department is alleging purchases as bogus without providing any material or evidences on which AO has placed his reliance. Such evidences are used without knowledge of the assessee which is against the law of natural justice and the learned CIT(A)-38 also failed to appreciate the facts. (7) Interest charged u/s 234B Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter considering the contentious of the assessee, the AO did not accept the same in view of the following reasons:- (i) The primary onus is on the assessee to establish the genuineness of the purchases claimed by it. The onus lies upon the assessee to prove all the expenses including purchases to the satisfaction of the AO, which was not discharged by the assessee as it failed to produce the parties from whom the purchases were made. Since the primary facts are in the knowledge of the assessee, it is his duty to provide the correct address or contact mode of alleged suppliers. (ii) It was seen from the examination of records that except for the purchase bill claimed to be given by these suspicious parties, Bank statement, particulars of purchase and sale no other evidence or other document were available in support of the purchase claimed. The assessee has not submitted quantitative details. Mere filing bills in support of purchases and payment through account payee cheque cannot be conclusive in a case, where genuineness of transaction is in doubt. Payment by account payee cheque is not sacrosanct and is not sufficient to establish the genuineness of the purchases. (iii) It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore in view of the above, the AO has not treated the entire purchases from the aforesaid parties to be bogus but held, to have been made from the parties other than those mentioned in the books of accounts and that being the position, not the entire purchase price but only the profit element embedded in such purchases has been taxed by the AO @ 25%. 4.1.12 Therefore the possible profit out of purchases made through non genuine party has been estimated by the AO which is commensurate with the recent judgment in the case of CIT vs. Sanjay Oil Cakes (2009) 316 ITR 274 of Honble Gujarat High Court wherein disallowance on account of bogus purchases in the case of manufacturers was sustained at 25% of the alleged bogus bogus purchases. 4.1.13 The AO has only added the profit element embedded in the aforesaid bogus purchases @ 25% which seems to be justified in view of the nature of the business of the appellant, comparative cases in this line of business and GP declared by the appellant himself in the past AYs and also in subsequent years as per the chart reproduced in the above paras. 4.1.14 However, during the course of appellate proceedings, it was observed that while ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the profitability is required to be worked out at an amount of Rs. 40,62,462/- & not Rs. 29,46,224/- worked out by the AO. Accordingly, the total addition on this account is worked .out at Rs. 10,15,615/- as against Rs. 7,36,556/- worked out and added by the AO. Therefore, there is enhancement in the addition by Rs. 2,79,060/- (Rs 10.15.615/.- minus Rs. 7,36,556/-). The total additions of Rs. 10,15,615/- stands confirmed." 5. Against the above order, assessee is in appeal before the Tribunal. 6. I have heard both the Counsel and perused the records. I find that overwhelming evidences are there on record to show that the impugned purchases are bogus. The Assessing Officer has received information from Sales Tax Department that the impugned suppliers have supplied bogus bills without actual delivery of goods and that they are hawala traders. Thereafter, the Assessing Officer has also conducted enquiry himself by issuing notices to the parties. These notices were returned unserved. This aspect was informed to the assessee. No evidence regarding the quantitative details, evidences of actual transportation were submitted by the assessee. In these circumstances, these purchases wer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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