TMI Blog2019 (3) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... me material and quantity at a lesser amount, thereby suppressing the gross profit. Under these circumstances any addition at all which could be made, is by enhancing the Gross Profit on such purchases. Nowhere there is a finding or whisper either by the AO or CIT (A) that the gross profit shown by the assessee during the year was less as compared to earlier or subsequent years or there is any material to show that gross profit has been low during the year. If all the entries in the trading account including the quantitative tally of purchases, opening stock, sales and closing stock are found to be correct and no discrepancy has been found, then no addition on account of unexplained purchases can be made, because nowhere it has been found that assessee has made purchases outside the books. The entire finding of the CIT (A) hinges upon the fact that there was material indicating purchase under consideration are bogus without even appreciating that if the source of purchases are from the books and through account payee cheque, then how such purchases can be treated as un accounted. Since gross profit rate and gross profit has been accepted including the trading account then no suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment orders were also filed before the AO. However, the Ld. AO relying upon the assessment proceedings in the case of Shri Vishesh Gupta and Shri Rakesh Gupta passed in pursuance of search carried out at their places, held that these purchases made by the assessee are bogus and accordingly he made the addition of ₹ 12,56,068/- u/s 69C. 4. Before the Ld. CIT(A), assessee has made detailed objections with regard to the validity of the reopening u/s 147 on the ground that reasons recorded are not in accordance with law for which detailed submissions were made, which have been incorporated in the impugned appellate order. Ld. CIT(A) has dismissed the assessee s objection holding that there was a clear cut connection between the material available on record and the escapement of income and AO did had prima-facie reason to believe based on such material. He observed that, here in this case AO has noted that Vishesh Gupta was providing accommodation entries which was found during the course of his search proceedings; and also during their assessment proceedings they have admitted that they were providing accommodation entries and in their course of admission, it was found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said addition by and large holding that assessee was not able to discharge his onus after being confronted with the material indicating that purchases under consideration are bogus. 6. Before us, Ld. Counsel for the assessee Shri Ved Jain, submitted that, here in this case exactly on similar facts and exactly same reasons recorded , this Tribunal in the case of Unique Metal Industries vs. ITO in ITA No. 1372/Del/2015 dated 28.10.2015 has held that reopening is bad in law and even on merits the Tribunal has held that purchase made by the assessee cannot be doubted. Apart from that, he has submitted that once purchases have been made from sources shown in the books, then the entire purchases cannot be held to be bogus, especially when no discrepancy has been found in stock, quantitative tally and sales. Further, in support he has filed various decisions of the Tribunal wherein on similar set of facts purchases have been addition on account of bogus purchases has been deleted. 7. On the other hand, Ld. DR strongly relied upon the order of the Ld. CIT (A) and submitted that, once there is a concrete information and material that assessee was one of the beneficiary of accommodat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eel scraps, aluminium scraps, brass scraps and in these bills, lorry / truck number for delivery has also been mentioned which is even evident from the scanned copy of one particular bill at page 69 in the impugned order. The purchases admittedly have been made through account payee cheque and the source of the purchases are from the books of account as it is not the case of AO that purchases from any party is outside books of account. The quantitative details of stock as on 31.3.2009 was as under:- Quantitative details of stock as on 31.03.2009 Sl. No. ITEMS OP.STOCK PURCHASES SALE CL STOCK 1. Aluminium Scrap 4345.500 42578.650 39188.900 7735.250 2. Brass Scrap 837.550 20902.050 19850.700 2788.900 3. Copper Scrap 1216.500 4125.100 2790.400 2551.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount for the purchase which in fact has purchased the same material and quantity at a lesser amount, thereby suppressing the gross profit. Under these circumstances any addition at all which could be made, is by enhancing the Gross Profit on such purchases. Nowhere there is a finding or whisper either by the AO or CIT (A) that the gross profit shown by the assessee during the year was less as compared to earlier or subsequent years or there is any material to show that gross profit has been low during the year. If all the entries in the trading account including the quantitative tally of purchases, opening stock, sales and closing stock are found to be correct and no discrepancy has been found, then no addition on account of unexplained purchases can be made, because nowhere it has been found that assessee has made purchases outside the books. The entire finding of the Ld. CIT (A) hinges upon the fact that there was material indicating purchase under consideration are bogus without even appreciating that if the source of purchases are from the books and through account payee cheque, then how such purchases can be treated as un accounted. Since gross profit rate and gross profit h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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