TMI Blog2017 (6) TMI 1365X X X X Extracts X X X X X X X X Extracts X X X X ..... ,75,237/- and the alleged bogus purchases are only of Rs.9,21,532/- which is hardly 4.39% of total purchases. The GP percentage in the present case is 23.4% which is much higher than the VAT rate charged by the Maharashtra Government. As a matter of fact, the VAT department is charged from 4% to 12.5% by the Govt. of Maharashtra on various purchases. Considering the totality of the fact and in order to fulfil the gap of Revenue leakage, the disallowance of reasonable percentage will meet the end of justice in the present case. Thus, considering the peculiarity of the present case, we deemed it appropriate to reduce the disallowance @ 10% of impugned purchases (10% of Rs. 9,21,532/-). Hon ble Bombay High Court in the case of CIT vs Shri H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntire purchase as the relevant income by way of sales was already accounted for by the Appellant; and there cannot be sale without corresponding purchases.' 2. Brief facts of the case are that assessee is running proprietary business in the name of M/s Sai Plastic Industries. The assessee is engaged in the business of PVC Doors Windows, Plastic Section etc. filed its return of income for the relevant assessment year on 20-09-2010 declaring total income at Rs.9,46,242/-. The assessment was completed on 25-03-2013 under section 143(3) of Income Tax Act. The AO made the addition under section 69C of the Act as unexplained expenditure of Rs. 9,21,532/-. The AO made the addition by holding that the assessee has made the purchase from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate stage furnished the comparison of Gross Profit (GP) ration showing that there was no variation from last three AY and in subsequent year. The assessee explained before the AO as well as before the learned CIT(A) that there cannot be sale without purchase. The assessee made the total purchase of Rs. 2,09,75,237/- and the alleged bogus purchases identified by AO is only of Rs.9,21,532/- which is hardly 4.39% of the total purchase. In support of his submission, the learned AR of the assessee relied upon the decision of Bombay High Court in the case of Nickunj Eximp Enterprises Pvt. Ltd. vs. ACIT (Bom) in Income Tax Appeal No. 5604 of 2010, decision of Gujarat High Court in the case of CIT vs. Bholanath Poly Fab (P) Ltd. (2013) 355 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties namely Sidhivinayak Steels, Shubham Enterprises, Sagar Enterprises. The learned CIT(A) while considering the contention of assessee observed that the assessee failed to produce the stock register or corroborative evidences regarding loading and unloading and voucher for corroborative evidences. Simply because the assessee is in possession of purchase bills and payments made through banking channel does not absolve the assessee of its responsibility to substantiate its claim of purchases by submission of primary documents and other corroborative evidences. The learned CIT(A) confirmed the entire addition. We have seen that the AO primarily relied upon the report of Sales Tax Department. The AO have not made any independent enquiry nor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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