TMI Blog2017 (11) TMI 1142X X X X Extracts X X X X X X X X Extracts X X X X ..... SOOD, JUDICIAL MEMBER: The present appeal filed by the revenue is directed against the order passed by the CIT(A)-30, Mumbai, dated 17.02.2017, which in itself arises from the order passed by the A.O u/s 143(3) r.w.s 147 of the Income Tax Act,1961 (for short Act ), dated 20.03.2015. The revenue assailing the order passed by the CIT(A) had raised before us the following grounds of appeal: 1. Whether on the facts and circumstances of the case and in law. the Ld. CIT(A) has erred in directing the A.O to restrict the estimation of the profit @ 6.5% instead 25% of the total non-genuine purchases without appreciating the fact that the assessee failed to discharge his duty to prove that the purchases made from the thirteen parties were genuine and did not produce any delivery challans, transport receipts, goods inward register maintained at godown etc.? 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was justified in sustaining only an addition @ 6.5% profit rate on total purchases of ₹ 3,61,50,427/- made from 13 parties. 3. The appellant prays that the order of the Learned CIT(A) on the above grounds be set-side and that of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of the assessment proceedings the A.O directed the assessee to place on record documentary evidence to substantiate the genuineness and veracity of the purchases claimed to have been made from the aforementioned parties, viz. (i) sale bills; (ii) transportation documents; (iii)delivery challans/bill; (iv) lorry receipts/bills etc; (v) copy of ledger accounts; (vi) date wise payment details; (vii) copy of bank statement; (viii) copy of stock register; and (ix) copy of sales tax return, VAT challan etc. The A.O further in order to verify the veracity of the aforementioned purchase transactions issued notices u/s 133(6) to the aforementioned parties at the addresses which were provided by the assessee, which however, were returned unserved by the postal authorities with the remark not known or left etc. The A.O in the backdrop of the aforesaid facts directed the assessee to produce the aforementioned parties along with documentary evidences in support of the genuineness of the purchase transactions under consideration. The assessee furnished with the A.O the copies of the ledger accounts of the respective parties in its books of accounts, copies of the purchase bills, copies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments placed on record is not capable of sustenance. The items shown to have purchased from the said parties are of such in nature that they require separate transportation. ( iv) The onus was upon the assessee establish the genuineness of purchases made by the assessee. ( v) The Sales Tax Department certified that the aforesaid parties are hawala operators after conducting independent enquiries. It is evident that the assessee did not make any effort to convert the finding recorded by the DGIT (Inv.) and it made to efforts to produce the seller parties. ( vi) If all the evidences point to the fact that no actual goods were supplied by the above parties, then the argument of assessee that it purchased goods in good faith is not tenable. ( vii) Mere filing of evidences in support of purchases and payment through account payee cheque cannot be conclusive in a case where genuineness of transaction is in doubt. The A.O on the basis of his aforesaid deliberations therein being of the view that it stood proved to the hilt that the purchases made by the assessee from the aforementioned parties had remained unverifiable, therefore, rejected the books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn case for A.Y. 2010-11 and A.Y. 2011-12 involving similar facts, his predecessor had vide his order dated 23.12.2016 restricted the addition to 6% as against the disallowance to the extent of 25% made by the A.O. 6. The CIT(A) after deliberating on the contentions of the assessee as regards his claim in respect of the genuineness of the purchase transactions under consideration, however, did not find favor with the same. The CIT(A) observed that in the backdrop of the facts which had a strong bearing on the adjudication of the genuineness of the purchase transaction under consideration, viz. (i) the notices issued under Sec. 133(6) were returned unserved by the postal department with the remarks not known , left , etc.; (ii) no documentary details substantiating the genuineness of the purchases and the correlating sales having been placed by the assessee on record; and the statements of the aforementioned supplier parties recorded by the Sales tax authorities, wherein they had accepted that they were only issuing hawala bills and no goods were supplied by them, it could safely be concluded that the assessee had failed to discharge the onus as was so cast upon him, and thus p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R. ) submitted that the A.O had rightly disallowed 25% of the purchases claimed by the assessee to have been made from the aforementioned parties, however, the CIT(A) had erred in restricting the said disallowance to 6.5%. It was thus submitted by the Ld. D.R. that the order of the CIT(A) may be set aside and that of the A.O be restored. 8. We have heard the Ld. D.R., perused the orders of the lower authorities and the material available on record. We have given a thoughtful consideration to the facts of the case and are of the considered view that in the backdrop of the fact that the notices issued by the A.O to the aforementioned 13 parties were returned by the postal authorities with the remarks not known , left , etc., the very existence of the said parties came under serious doubts. We further find that it remains as a matter of fact that the assessee even otherwise had failed to substantiate the genuineness and veracity of the aforementioned purchase transactions on the basis of irrefutable documentary evidences, viz. delivery challans, transportation receipts, octroi receipts, receipt of weigh bridge for weighing of goods, excise gate pass, goods inward register maintai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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