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TMI Blog2018 (10) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... in all these appeals is, in respect of the addition made towards bogus purchases by the Assessing Officer. The Assessing Officer in all these Assessment Years based on the information of the Sales Tax Department in their official website and the information from the Investigation Wing, noticed that several dealers have provided only accommodation entries for purchase of materials without supply of goods. In the course of Assessment Proceedings, A.O noticed from the ledger extract that the assessee purchased materials from several dealers who appeared in the website of the Sales Tax Department and required the assessee to substantiate the purchases made from such dealers. 3. Assessee made various submissions before the Assessing Officer con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Tax Department's information doubted the genuineness of the purchases made by the assessee as the assessee purchased materials from some of the dealers who appeared in the Sales Tax Department's website as Hawala dealers. Learned Counsel for the assessee submitted that in the course of Assessment Proceedings assessee produced stock register, invoices, bank statements to prove the genuineness of the purchases made. The payments were made through account payee cheques. Therefore, the entire purchases cannot be treated as bogus. Learned Counsel for the assessee submitted that estimation of profit @25% by the Ld.CIT(A) is also on higher side. Referring to the Coordinate Bench decision in the case of M/s. Adeshwer Enterprise v. DCIT in ITA.No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em as bogus. On a perusal of the Assessment Order, we see that the addition was made only based on the information kept in the Sales Tax Department website that some of the dealers have provided accommodation entries. The Assessing Officer has not brought any concreate evidence to prove that the assessee purchased materials from these hawala dealers. Assessee produced various evidences to establish the genuineness of the purchases. The Assessing Officer not considering the evidences produced treated the entire purchases as non-genuine and at the same time the sales made from such purchases were accepted by the Assessing Officer. The Ld.CIT(A) considering the submissions of the assessee and various case laws estimated the profit element @ 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e disallowed which was replied by the assessee vide letter dated 20.03.2012. The assessee submitted that it has made purchases from three parties aggregating to Rs..31,03,479/- and submitted the details of purchases, bills, vouchers, vehicle numbers and delivery challans, etc beside the details of payments. The assessee submitted that these purchases were made for the construction of various projects and the materials were duly consumed and the sales were also reflected in the books of account of the assessee. It was also stated that mere non payment of VAT/Sales Tax by the vendor do not mean that the assessee has not incurred any cost on the construction as the assessee has issued account payee cheques to various vendors who supplied mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponding sales were also shown in the books of account of the assessee. The learned A.R. submitted that the assessee is following project completion method wherein profits are offered to tax only after completion of the project whereas the AO had added 100% of the bogus purchase to the income of the assessee disregarding the said system of accounting followed by the assessee. The learned A.R. further submitted that despite producing all the evidences, the AO has not done any verification and merely added the entire purchase from three parties aggregating to Rs..31,03,479/- to the income of the assessee. The learned A.R. also submitted that the case of the assessee was covered under search action and the year under consideration has been att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases the Coordinate Benches have taken a view that the percentage addition should be made ranging from 2 to 12.5% depending upon the facts and circumstances of the case in order to bring to tax the savings which the assessee has made by the reason of purchase of goods from grey market when the sales/consumption is undisputed. In the present case the sales were not disputed and the method of accounting followed by the assessee is project completion, therefore, we are inclined to estimate the profit on the above purchases at 3%. Accordingly appeal of the assessee is partly allowed without deciding the issue technically and legally." 9. Facts being identical, we are inclined to follow the order of the Tribunal in assessee's group case and d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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