TaxTMI 
TaxTMI 
2022 (5) TMI 508
X X X X Extracts X X X X
X X X X Extracts X X X X
....olved in these appeals, therefore same were heard together and disposed off by way of this consolidated order for convenience. 2. In the grounds raised, the assessee is aggrieved with two additions. The first addition being the addition under section 69C of the Act for bogus purchases, where the Ld. CIT(A) has restricted the addition at the rate of 12.5% of the bogus purchases, which has been worked out to Rs.20,55,638/- for assessment year 2007-08; Rs.45,80,975/- for assessment year 2008-09 and Rs.45,79,432/- for assessment year 2009-10. The second addition is under section 68 of the Act, which is in respect of negative cash balance in the cash flow statement prepared by the assessee for justifying cash deposits in bank account. The amoun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppellant has shown purchases from 10 bogus concerns. The name of the concerns is mentioned in para 3 of the assessment order. The A.O. extracted information from the Sales Tax Department website. The assessee was asked to show cause as to why the entire amount of Rs. 1,64,45,105/- should not be treated as unexplained expenditure U/s.69C of the Act, 1961. In reply to the show cause issued the assessee submitted that the purchase transactions are genuine and he had received actual delivery of goods. The A.O. however did not accept the contention of the appellant and added Rs.1,64,45,105/- u/s.69C of the Act. 4.2 During the course of appeal proceedings, the appellant filed written submission. The gist of the argument put forward by the appel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he had formed his opinion were- 1. The assessee was not able to submit any lorry receipts or any details regarding transportation of goods. 2. The suppliers from whom the disputed purchases have been made are included in the list of hawala operators prepared by the Sales Tax Department. 3. The suppliers from whom the disputed purchases have been made, were not produced before the AO. 4. The suppliers from whom the disputed purchases have been made, did not comply to notice u/s 133(6). 4.4 The appellant is a trader. The AO in his order has dealt exclusively with the purchases of the appellant. However, in the case of a trader, if there are no purchases of materials there cannot be any sales also. The AO had disallowed part of purch....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nly to the extent of gross profit. To this extent, I am in agreement with the appellant that if the appellant has fulfilled his onus of making the payments by banking channels and has supplied the address of the sellers, then it cannot be presumed that the sellers were bogus simply because the sellers were not found at the given addresses. However, at the same time it cannot be said that the information provided by the sales tax department should not be taken cognizance of by the A.O. Therefore, after considering the totality of facts and after following the ratio of Saraswathi Oil Traders vs. CIT(SC) cited supra, I am of an opinion that it is the profit element on the total component in dispute which needs to be added to the income of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at the Ld. CIT(A) has duly considered the cash flow statement submitted by the assessee and after calling for remand report from the Assessing Officer, upheld the addition. The Ld. CIT(A) also provided opportunity to the assessee to comment on the remand report of the Assessing Officer, however no compliance was made by the assessee. The relevant finding of the Ld. CIT(A) on the issue of negative cash balance for assessment year 2007-08 is reproduced as under: "5.1 The relevant facts are like this. There was a survey operation in the premises of the appellant on 24.01.2013. As per assessment order it was noticed during the course of survey that the assessee has made cash deposits in his bank account totaling upto Rs.46,39,000/-. The AO as....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and there is negative cash balance for AYs 2007-08, 2008-09, 2009-10, 2010-11 & 2011-12. In the concluding remarks the AO wrote the following: "The daily cash register prepared by the assessee through computer and furnished cannot be relied upon as the same was prepared by assessee through computer system as per their convenience and no original cash book furnished for verification with details. 5.3 After the receipt of remand report the case of the appellant was re-fixed for hearing on 30.01.2017. Copy of the remand report was also sent by post and was further handed over to the appellant himself. The appellant sought an adjournment and the case was adjourned for hearing to 15.02.2017. However, on this date no one appeared nor was any....