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TMI Blog2021 (8) TMI 556X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed the addition of Rs. 30,80,585/- in assessment year 2010-11 and Rs. 31,75,554/- in assessment year 2011-12 on account of alleged bogus purchases. 3. The brief facts of the case as emanating from records are: The assessee is a dealer and stockist of tools and alloy. The assessment in the case of assessee for assessment years 2010-11 and 2011-12 were reopened on the basis of information received from the Sales Tax Department, Government of Maharashtra. As per information received the assessee had obtained bogus purchase bills amounting to Rs. 2,46,44,676/- from various hawala dealers in assessment year 2010-11 and bogus purchase bills aggregating to Rs. 2,53,04,428/- from dealers declared as hawala operators in assessment year 2011-12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be adopted it should be based on last 3 years average G P margin as submitted herewith. e. Merely relying on statement of creditors before VAT authority without knowing their objective of skin saving exercise & not making independent inquiry viz. Bank statements, PAN, IT records etc leads to incorrect assessment of income. f. Maintenance of stock movement records too a conclusive evidence of my firm doing real business hence any addition based on estimation is uncalled for & needs to be deleted. g. My audited books of accounts & especially cl 17 (h) of Audit report which doesn't qualify any cash payment above permissible limit to the purchase creditor. Thus it's established that payment for purchases were made by a/c pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has failed to substantiate trail of goods. Payments made through cheque/banking channels are not sacrosanct and does not prove authenticity of transactions. Since, the Revenue has accepted the sales declared by the assessee, it is only the profit element embedded in such bogus transactions that has to be brought to tax. The assessee has filed a chart at page 70 of the Paper Book giving tabulating G.P. ratio in preceding three assessment years, the same is reproduced herein below: Assessment Year G.P.Ratio (%) 2009-10 4.65% 2008-09 5.99% 2007-08 4.76% Average G.P. ratio 5.13% 7. Taking into consideration entirety of facts, I am of the considered view that estimation of G.P by CIT(A) at 12.5% on bogus purchases is on higher side. To ..... X X X X Extracts X X X X X X X X Extracts X X X X
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