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TMI Blog2019 (3) TMI 1874X X X X Extracts X X X X X X X X Extracts X X X X ..... out of the total addition of Rs. 71,95,000/- on account of bogus purchases. ii) On the facts and in the circumstances of the case, the Ld .CIT(A) erred in ignoring the factum of bogus purchases of Rs. 1,45,23,400/- from M/s Rajasthan Metals which was specified in the remand report submitted by the Assessing Officer before the ld. CIT(A)." 3. Briefly stated, the facts of the case are that as per information, a search action was carried out in the case of Shri Navneet Kumar Jain and his son, Shri Vaibhav Jain alongwith Jaguar Group on 26.04.2010 from which it came to the notice of the department that these persons were engaged in providing accommodation entries in the form of bogus sales bills. These entries were provided directed or thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to say and treated the transaction of purchases of Rs. 71.95 lakhs as bogus and added back the same to the total income of the assessee. 7. The assessee strongly agitated the matter before the ld. CIT(A) and pointed out that the purchases made from Rajasthan Metals were to the tune of Rs. 1.45 crores and the Assessing Officer has doubted only purchases to the extent of Rs. 71.95 lakhs which means that the Assessing Officer has accepted the genuineness of the purchases from the same supplier for the balance amount. It was further contended that during the year under consideration, the assessee has made payment of only Rs. 10 lakhs and balance of Rs. 61.95 lakhs pertained to subsequent years. It was brought to the notice of the ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... At the same time, it cannot be denied that there could have been leakages in this process and therefore it would be in the fitness of things to estimate the income of the appellant having regard to the industry's barometers and the trading results in the case of the appellant in the subsequent years. In order to arrive at a fair estimate of income further inquiries were made and following information was called from the appellant in terms of provisions contained in section 250(4) of the Act: i) G.P rate offered by the appellant for the year under consideration and next two years. ii) copy of account of M/s Rajasthan Metal for the next two years duly showing the purchases and payments made to them and proof of identity. iii) comparabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclared (@ 3.83%) Rs. 21,28,985/- Difference to be taxed Rs. 6,43,466- 6.5.9 Hence the addition on account of accommodation entries in the form of bogus purchases will be restricted to Rs. 6,43,466/- as against Rs. 71,95,000/- made by the AO and the AO is directed accordingly to restrict the addition to Rs. 6,43,466/-and the appellant gets relief of Rs. 65,51,534/-. This ground of appeal is partly allowed." 9. Aggrieved by this, the Revenue is before us. 10. The ld. DR strongly supported the findings of the Assessing Officer. 11. Per contra, the ld. counsel for the assessee relied upon the orders of the first appellate authority. 12. We have heard the rival submissions and have given thoughtful consideration to the orders of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Moreover, sales effected by the assessee has been accepted by the Sales Tax Department. 14. Further, we find that the assessee has given complete quantitative details in the form of stock register of raw material as S.S. Patti which is exhibited at page E-3/81 to E-3/109 of the paper book. A perusal of the same clearly reveals that the raw materials, in fact, entered the business of the assessee which were used for making final product and accordingly, sales were executed by the assessee. 15. In our understanding of the facts, it appears that the assessee must have purchased the raw material from the grey market and must have taken supporting purchase bills from the accommodation entry provider which means that raw material were, in fact, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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