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TMI Blog2019 (1) TMI 990X X X X Extracts X X X X X X X X Extracts X X X X ..... tained by the ld. CIT(Appeals) to the extent of Rs. 95,504/-. 2. The assessee in the present case is an individual, who is engaged in the business of manufacturing and trading of tea machinery items. The return of income for the year under consideration was filed by him on 27.11.2014 declaring total income of Rs. 5,87,540/-. During the course of assessment proceedings, the machinery expenses claimed by the assessee were examined by the Assessing Officer. During the course of such examination, the relevant details of the parties were furnished by the assessee along with the copies of bills/vouchers for machinery expenses. In order to verify the assessee's claim, letters under section 133(6) were issued by the Assessing Officer to the select ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the concerned three parties as unexplained expenditure under section 69C was challenged by the assessee in the appeal filed before the ld. CIT(Appeals). During the course of appellate proceedings before the ld. CIT(Appeals), it was pointed out on behalf of the assessee that all the relevant bills issued by the ITA No. 698/KOL/2018 A.Y. 2014-2015 Sri Pravesh Kejriwal concerned parties were produced before the Assessing Officer for verification. It was also submitted that copies of their ledger accounts maintained regularly in the books of the assessee were also produced before the Assessing Officer to show that the payments to the said parties were made by account payee cheques after deducting tax at source. In order to clarify the doubts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chases as bogus, but has not rejected the books of accounts, which in essence means that the sales have been found to be acceptable. In my considered view of the factual matrix, this would appear to be a case where purchases have been made from parties other than those mentioned in the books of accounts. These purchases were in all probability from the grey market, and accordingly bills obtained. I find that in such situations, Hon'ble Courts have taken a view that the entire unverified purchases are not rendered vulnerable for addition; rather only the "element of profit" embedded from such purchases ought to be considered for addition. It would be Just and fair in my considered view to arrive at such percentages of the profits which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r treated the bills raised by two parties for machinery expenses on the assessee on the ground that they could not establish their identity. He also treated the bills issued by the fifth party as bogus as the assessee could not produce the said party for verification before him. In our opinion, when the bills issued by the said two parties were duly furnished by the assessee, payments against the said bills were made by the assessee by account payee cheques after deduction of tax at source and the said parties not only appeared before the Assessing Officer for examination but also confirmed the relevant transactions with the assessee, there was no reason for the Assessing Officer to doubt their identity and disallow the corresponding machin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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