TMI Blog2021 (1) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... ered view the ends of justice would meet if the GP on bogus purchases be estimated at 6%. We hold and direct accordingly. The ground No.2 of the appeal is partly allowed in the terms aforesaid. Disallowance on interest under section 36(1) (iii) - HELD THAT:- It is not emanating from records whether the assessee was having own sufficient funds for advancing of loans to its sister concern. The assessee has submitted that the advances have been given in connection with business. However, we find that there is no reference to the material by authorities below that have been placed on record by the assessee to substantiate that the advances were in respect of business transactions. In the absence of complete facts and reference to material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of the entire alleged bogus purchases under section 69 of the Income Tax Act, 1961 (in short the Act ). The Assessing Officer further made disallowance of interest amounting to ₹ 12,79,434/- on the ground that the assessee had advanced interest bearing funds to its sister concern M/s. Prakash Stainless Steel Pvt. Ltd. without charging any interest. 3. Aggrieved by the assessment order dated 30/03/2015 passed under section 143(3) r.w.s. 147 of the Act, the assessee filed appeal before the CIT(A). In first appellate proceedings, the CIT(A) in principle accepted the findings of Assessing Officer in holding that the assessee has indulged in obtaining bogus purchase bills from hawala dealers. However, CIT(A) restricted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound No.1 of the appeal is dismissed being devoid of any merit. 7. In ground No.2 of the appeal, the assessee has assailed disallowance made on bogus purchases by estimating GP at 12.5%. As per the contentions of the assessee, the assessee had furnished confirmations with PAN of the alleged hawala operators. It is contended that no independent enquiry was made by the Assessing Officer . In the absence of proper verification, the purchases cannot be treated as non-genuine. Though payment for the goods purchased were made through banking channels, but mere making payment through cheque does not conclusively prove genuineness of the transaction. The assessee has failed to produce parties from whom purchases were made. Further the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r advancing of loans to its sister concern. The assessee has submitted that the advances have been given in connection with business. However, we find that there is no reference to the material by authorities below that have been placed on record by the assessee to substantiate that the advances were in respect of business transactions. In the absence of complete facts and reference to material brought on record by assessee, we deem it appropriate to restore this issue back to the file of Assessing Officer for fresh adjudication. While deciding this issue, the Assessing Officer shall also consider the applicability of decision rendered in the case of CIT vs. Reliance Utility Power Ltd. reported as 313 ITR 340 (Bom). 9. In the result, app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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