TMI Blog2022 (3) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... ase. We find that before, ld. CIT(A) the assessee filed in very detailed and exhaustive submissions. The profit element in such disputed purchase is to be disallowed to avoid the possibility of revenue leakage. We find that Assessing Officer identified the disputed purchase to the extent of sale of ₹ 12.05 Crores and disallowance of 100% of such purchases. In our view, 100% of disallowance of such purchases without disputing the sales is not justified. Similarly, disallowance restricted by ld. CIT(A) to the extent of 5% is also not justified when the assessee has shown GP of less than of less than 1% (.88%). Considering over all facts and circumstances of the case, we are of the view that disallowance of 6% of the disputed purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tantiated by the statement on oath given by the entry provider. (iii) On the facts and circumstances of the case and in Law, the Ld. CIT(A), Surat ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the LD. CIT(A)-1 Surat maybe set-aside and that of the Assessing Officer s order may be restored. 2. Brief facts of the case are that assessee is an individual and engaged in the business of import, export, trading of diamonds. The case of the assessee for the assessment year 2007-08 was reopened on the basis of information received from Investigation Wing, Mumbai that search and seizure action was carried out in the case of Shri Praveen Kumar Jain Group on 01.10.2003 by Investigation Win ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansaction as genuine. There is sufficient evidence in the form of statement recorded under section 132(4) wherein proprietor of Mohit International categorically admitted that several entities including of Mohit International are not carrying any genuine business activity. They did not have any physical stock of goods. Copy of such statement was provided to the assessee. The Director, partner of entities are closely associated with Shri Praveen Kumar Jain Group, who was engaged in providing accommodation entries. The Assessing Officer disallowed entire purchases of ₹ 3.46 Crores from Mohit International and Kunal Jems. 4. Aggrieved by the addition in the assessment order, the assessee filed an appeal before ld. CIT(A). The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d associates, assessee is one of the beneficiary of bogus purchases of ₹ 3.49 Crores. The assessee was given sufficient opportunity to prove the genuineness of transaction. The assessee before Assessing Officer mere submitted that he has made a genuine purchase and payments were made through banking transaction. Mere payment through banking transaction is not sufficient as the assessee failed to show actual delivery of goods. The ld. CIT-DR prayed for holding the addition of entire purchases. 6. On the other hand, ld. AR of the assessee submits that purchase shown by assessee are genuine the assessee has given sufficient evidence to prove the genuineness of purchases. The Assessing Officer has not rejected the books of account of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing officer. The Assessing officer not rejected the books of account. No other observation on books of assessee was made. It is settled law that no sale is possible in absence of purchase. We find that before, ld. CIT(A) the assessee filed in very detailed and exhaustive submissions. The ld. CIT(A), instead of discussion the fact of the case of assessee restricted the addition on the basis of his decision in case of Gagnani Impex in Appeal No. CAS-3/512/2015-16 dated 24.11.2016. The ld.CIT(A) by referring the various decision, restricted the addition to the extent of 5% of the disputed purchase. 9. We find that the assessee has shown GP of .88%. The assessee has shown total turnover of 11.76 Crore and declared income of ₹ 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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