TMI Blog2020 (10) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... tted to bank from where the assessee is availing cash credit facility. The aforesaid fact clearly proves that the assessee, indeed, had purchased the goods and the goods have entered its stock and were utilized/consumed in the work. The doubt, if any, is only with regard to the source of purchases. In such circumstances, the entire purchases cannot disallowed. As rightly observed by Commissioner (Appeals), only the profit element embedded in such purchases can be considered for disallowance. Considering the nature of business carried on by the assessee, in our considered opinion, disallowance @ 12.5% of the alleged non genuine purchases is fair and reasonable. Hence, needs to be upheld. - Revenue appeal dismissed. - ITA no.3233/Mum./20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, a survey under section 133A of the Act was carried out in the business premises of the assessee. In the course of such survey action, it was found that the assessee had entered into bogus purchase transactions with three parties viz. Gaurav Enterprises, Jai Maa Bhawani Business Group, Abdul Hafiz. On the basis of such information, the Assessing Officer re opened the assessment under section 147 of the Act. In course of re assessment proceedings, the Assessing Officer confronted to the assessee the report received from DDIT (Inv.), Mumbai, indicating that the aforesaid three parties from whom the assessee claimed to have effected purchases during the year have been identified as hawala dealers by the Sales Tax Department as per informatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultimately proceeded to disallow the entire purchase of ₹ 7,49,33,848, shown to have been made from the aforesaid three parties and added back to the income of the assessee. The assessee challenged the aforesaid disallowance/addition before the first appellate authority. 5. After considering the submissions of the assessee in the context of the facts and material on record and relying upon certain judicial precedents, learned Commissioner (Appeals), though, agreed with the Assessing Officer that the assessee could not prove the source of purchases, however, he observed that the Assessing Officer has not doubted the consumption/sales of the material purchased. Thus, he was of the view that the assessee must have obtained bogus bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Gaurav Enterprises from whom the assessee had purchased goods worth ₹ 7,42,88,000, the assessee has opened an letter of credit with a nationalised bank after obtaining creditworthiness of the concerned party from a credit rating agency. On the basis of such credit rating, the banker has opened the letter of credit in favour of the suppliers. It is also a fact on record that when the assessee entered into purchase transactions with these parties, all of them had valid Sales Tax registration. In fact, the assessee had furnished all documentary evidences for proving the genuineness of purchases including goods received note/delivery challans/store receipt, vouchers and also the bank statement showing payment made to the parties. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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