2021 (1) TMI 1016

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..... ssee was reopened on the basis of information received from CIT (Central)-1, Mumbai that the assessee has indulged in availing accommodation entries to the tune of Rs. 1,32,32,807/- from hawala traders. In assessment proceedings the Assessing Officer after recording that the assessee has failed to produce the parties from whom alleged purchases were made and assessee's failure to produce vital documents viz. Stock register and books of account leades to the fact that purchases were not genuine. Thus, the Assessing Officer made 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 Rs. 12,79,434/- on the ground .....

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..... how that the loan to sister concern was advanced from own non-interest bearing funds. 6. We have heard the submissions made by the ld. Departmental Representative and have examined the orders of authorities below. In ground No.1 of the appeal the assessee has assailed reopening of assessment. The assessee has assailed the reopening before the CIT(A). No contrary material is available on record to rebut the findings of CIT(A). We find no reason to interfere with the order of CIT(A) on this issues. Accordingly, ground 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 .....

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..... 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. 8. In ground No.3 of the appeal, the assessee has assailed disallowance on interest under section 36(1) (iii) of the Act. The assessee has allegedly advanced interest bearing funds to its sister concern M/s. Prakash Stainless Steel Pvt. Ltd. without charging any interest. 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 o .....

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