TMI Blog2017 (3) TMI 1731X X X X Extracts X X X X X X X X Extracts X X X X ..... given a chance to cross-examine RKG, that the quantity details of the sales and closing stock of not challenged, that no meaningful investigation was done after the survey proceedings at the business premises of RKG, that 10% of the total purchases should be added to the income of the assessee. In our opinion, there was no justification for upholding the addition of 10% of the purchases also. Once the sales and closing stock details were found to be genuine, then without bringing some positive material on record to prove the unaccounted purchases, no addition should have been made - the supplier i.e. RKG has retracted his statements. Considering the peculiar facts and circumstances of the case, we are of the opinion that the order of the FA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, so, the AO directed it to explain as to why the purchases made from RKG group should not be treated as non-genuine purchases and should not be added to its total income. The assessee objected to the addition and contended that purchases made by it were genuine. It also asked for cross-examination of RKG. Vide his letter dated 11/12/2011 RKG confirmed the transac - tions of sale with the assessee and stated that amends had been received by account payee cheques. Besides copies of the Ledger accounts were also filed by the RKG group concerns. The AO served the notice on RKG to appear for cross-examination on 13/12/2011. But, he did not appear. He also did not appear on 14/12/2011. The assessee made elaborate submissions before the AO and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e supplier of the goods, that the sole reliance was placed on the initial general statement of RKG, that no further enquiry/ investigation was carried out after restriction filed by RKG, that the AO could not have treated the entire purchase as unexplained when the supplier had filed a letter confirming the sales to the assessee and when the assessee was not granted opportunity of cross-examining RKG, that the supplier had given a sweeping statement without referring to the assessee, that the assessee had stated that payments were made by account payee cheques and goods were sold to 3rd parties, that the sales were not in doubt, that the only addition to be made could be for possible case relating to purchase, that no addition could be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the material before us. Before and at the time of completing the assessment under section 143 (3) the AO was not having information about the statements of RKG. After receiving the information about the survey action carried out at the business premises of RKG concerns he came to know about the new facts. Therefore, in our opinion, he was justified in issuing the notice under section 148 of the Act. Confirming the order of the FAA, in that regard, we decide the 1st ground of appeal against the assessee. 4.1.As far as the addition with regard to non-genuine purchase is concerned, we want to mention that the FAA has held that there was no doubt about the sales made by the assessee, that the assessee was not given a chance to cross-exami ..... X X X X Extracts X X X X X X X X Extracts X X X X
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