TMI Blog2020 (8) TMI 302X X X X Extracts X X X X X X X X Extracts X X X X ..... hora Ram, Sr. DR For the Respondent : None ORDER PER MAHAVIR SINGH, VP: This appeal of Revenue is arising out of the order of the Commissioner of Income Tax (Appeals)]-26, Mumbai, [in short CIT(A)], in ITA No. CIT(A)-26/IT/779/2013-14 dated 31.12.2018. The assessment was framed by the (in short ACIT/ITO/ AO) for the A.Y. 2010-11 vide order dated 25.03.2013 under section 143(3) of the Income-tax Act, 1961 (hereinafter the Act ). 2. The only issue in this appeal of Revenue is against the order of CIT(A) restricting the addition made by the Assessing Officer by applying the profit rate at 12.5% of the bogus purchase. For this Revenue has raised following ground: - 1. Whether on the facts and in the circumstances o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to produce these parties. During the course of assessment proceedings and during appellate proceedings, the assessee submitted all the documentary evidences such as inward register, stock register, payment received against such sales, receipt of material purchases, account payee cheque. But the assessee could not produce transportation bills, delivery challans and weighment slips. According to the AO, the assessee failed to establish the genuineness of the purchase and accordingly, he made addition of unproved purchase at ₹ 10,14,743/- to the return income of the assessee. Aggrieved, assessee preferred the appeal before CIT(A), who restricted the disallowance at 12.5% of the bogus purchases by observing in para 8.1 by followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ining the documentation submitted by the appellant in support of its claim. The documentary evidences such as purchase bills, payments by cheques, etc. would all have been orchestrated to present a facade of genuineness and does not necessarily mean that the purchases from these parties are genuine. The Courts have held that payment by cheque by itself is not sacrosanct so as to prove genuineness of purchases when the surrounding circumstances are suspect. However, the appellant has shown onward sales which has not been doubted by the Assessing Officer. Since there can be no sales without corresponding purchases, the only logical explanation is that the appellant would have made purchases from undisclosed parties in the grey marke ..... X X X X Extracts X X X X X X X X Extracts X X X X
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