9911796707
TMI Blog2017 (11) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... 011-12 on 30-09-2011 declaring total income of Rs. 12,90,080/-. The AO received information from the Investigation Wing that the assessee has entered into bogus purchase transactions with six parties, viz. Chetana Enterprises, Diamond Traders, Donnies Trading P Ltd, N.R. Traders, Trisha Enterprises, Mercury Enterprises, totaling to Rs. 3,21,36,571/-. During the assessment proceedings, the AO called upon the assessee to produce details of purchases made from the above parties along with necessary evidences. The AO also required the assessee to produce parties in person alongwith necessary evidences. The assessee has filed invoices along with payment proof. However, no proof like lorry details, transportation details, excise gate pass, etc. w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is in appeal before us. 4. The Ld.AR for the assessee submitted that the Ld.CIT(A) was erred in estimating net profit at 12.5% on the alleged bogus purchases ignoring evidences filed by the assessee to prove the genuineness of purchases. The Ld.AR further submitted that the net profit estimated by the CIT(A) is on higher side when compared to the nature of business of the assessee. The assessee is in the business of trading in iron & steel where he derives net profit of 0.32% to 0.52%. The assessee further contended that it has furnished complete details of purchases and sales and the AO has not pointed out any discrepancy in quantitative details of items traded by the assessee. Therefore, he requested to reduce the net profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO, neither disputed sales declared by the assessee nor made out any case of sales made outside the books of account. Therefore, estimation of net profit at 12.5% on total such purchases is totally incorrect. 7. Having heard both the sides and considered material on record, we find that the assessee has failed to prove the purchases from six parties as genuine in the backdrop of clear findings of the AO that the parties were involved in providing accommodation entries. This is further strengthened by the fact that the sales-tax department has demanded additional tax from the assessee on total purchases from those six parties in their assessments. The sales-tax department has denied input tax credit on the so-called purchases from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is fair and reasonable to estimate 12.5% net profit on alleged bogus purchases. The CIT(A), after considering relevant facts has rightly directed the AO to estimate the net profit of 12.5% on the alleged bogus purchases. We do not find any error or infirmity in the order of CIT|(A); hence, we are inclined to uphold the findings of the CIT(A) and reject the ground raised by the assessee. 8. Coming to the alternative submission of the assessee that he has paid additional VAT on alleged bogus purchases from those six parties, after finalization of assessment orders by the Sales-tax department. The assessee further submitted that the Sales-tax department has denied input tax credit on purchases from those six parties for which the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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