TMI Blog2018 (12) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... ade purchases from grey market and made sales. In this entire process, the assessee might have save the VAT payment and made purchases at a lower rate from grey market. Hence, assessee might have earned higher profit. Accordingly, now the only alternative left with the AO is application of profit rate. The AO has estimated the profit rate @ 12.5%, which is confirmed by the CIT(A) relying on the decision of Hon’ble Gujarat High Court in the case of Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] and Bholenath Poly Fab P. Ltd. [2013 (10) TMI 933 - GUJARAT HIGH COURT]. I find from the facts of the case that the lower authorities have rightly estimated the profit rate @ 12.5% & which is quite reasonable. - Decided against assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere providing hawala entry/ accommodation entries for purchases. The information in possession of the AO was that the assessee has availed of accommodation entries for purchases from 19 parties totaling to ₹ 1,66,70,967/-. In order to verify the genuineness of the purchases claimed by the assessee from these parties, the AO asked the assessee to furnish supporting documents for corresponding sales affected. Barring the ledger account and cheque payment, no other documents such as delivery challans, lorry receipts, transportation details etc. were produced during the course of assessment proceedings; Moreover, these parties have admitted that they have not made any sale or purchase transaction. The AO held that since the assessee could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from them are genuine which he failed to do. In any case, as the parties were not available in the address given, there is no question of the AO producing them for cross examination. The Ld. Counsel further argued that the purchases are duly recorded in the books of the appellant and copies of both the purchases and sales invoices are present. The payments have been made by account payee cheques and the stock register is maintained which has been audited by the tax auditor. The appellant placed heavy reliance on the judgement of the Bombay High Court in the case of CIT vs. Nikunj Eximp Enterprises ITA No.5604 of 2010 but the facts of Nikunj Eximp are different from the facts of the present case. It was not the case where the parties were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with similar case where some of the alleged suppliers who had issued bills to the assessee were not genuine as they were not traceable. The goods must have been received from other parties. The likelihood of the. Purchase price of these alleged purchases being inflated could not be ruled out and therefore the Hon'ble High Court has upheld the decision of CIT(A) and the ITAT disallowing 25% of the payments made to such parties. The Hon'ble High Court. Aggrieved, now assessee is in second appeal before Tribunal. 5. At the outset it is to be mentioned that the notice was served on assessee fixing the appeal today but none appeared. Going through the facts, it is noticed that this is a very small and covered matter. Hence, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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