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TMI Blog2023 (6) TMI 1122X X X X Extracts X X X X X X X X Extracts X X X X ..... ny. The assessee was asked to furnish name, PAN, current communication address and address as per invoices of some of the suppliers from which purchases were allegedly made for the year under consideration. The assessee was also asked to provide party-wise ledger of the suppliers in which large amount remained due to be paid at the end of the year. Further the A.O. noticed that the assessee has shown large purchases from the parties without any regular payments during the year on physical verification by the Inspector such parties were not available in those addresses and after issuance of summons to the various parties, the bogus purchases made by the assessee were determined by the Assessing officer as follows: Sr. No. Name of supplier Opening Balance Purchases during the year Payments during the year Peak Outstanding 1 Balaji Enterprise 0 57,74,012/- 0 57,74,012/- 2 Jay Enterprise 0 1,15,02,607/- 40,00,058/- 1,15,02,607/- 3 Onyx Sales Corporation 0 35,32,823/- 0 35,32,823/- 4 Mayur Trading 0 90,19,710/- 9,19,275/- 90,19,710/- 5 Sai Trading Co. 0 70,49,575/- 9,81,500/- 70,49,575/- 6 Umiya Trading 0 48,34,975 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed disallowance of 10% of the alleged bogus purchase of Rs. 4,17,13,702/- and the profit already declared would cover the possible suppression in profits and will balance the equity. Such estimation would also be in tune with the judicial pronouncement of Gujarat High Court and Tribunal decisions cited supra and is considered to meet the ends of justice. Accordingly, I direct the AO to restrict the estimated disallowance @ 10% on account of alleged bogus purchase of Rs. 4,17,13,702/- which works out to Rs. 41,71,370/- and the AO has been directed to make the addition of Rs. 41,71,370/- and the balance addition of Rs. 3,75,42,332/- on account of bogus purchases is hereby deleted. This Ground of appeal is partly allowed" 4. Aggrieved against the same, the Revenue is in appeal before us in ITA No. 1334/Ahd/2019 raising the following Grounds of Appeal: 1. The Ld. CIT(A) has erred in law and on facts in restricting the quantum of disallowance of bogus purchases to 10% of bogus purchases 2. The Ld. CIT(A) failed to appreciate the fact that when the entire purchase was found to be bogus, it could not be restricted to a certain percentage. 2.1. The Ld. CIT(A) has failed to take note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42,332/- in the hands of the assessee. Thus the findings arrived by the Ld. CIT(A) does not require any interference as the same may be upheld by dismissing the Revenue appeal. 7. We have given our thoughtful consideration and perused the materials available on record including the Paper Books filed by the assessee. It is seen from the pages 296 to 414 of the Paper Book filed by the assessee, the final reply filed by the assessee dated 07- 12-2018 wherein the invoices raised by the six parties are enclosed. The invoices carries proper Serial No., GST, TIN No, full communication address and Telephone No. The Invoices carries VAT Tax and additional tax on the sale of the goods. However the Assessing Officer has not cross checked the above details and invoices with the VAT Department, but simply treated the above purchases as bogus transactions. Further the assessee also provided respective PAN Number of the purchasers. It is seen from the bank statements of the assessee, payments were made by the assessee during the Financial Years 2015-16 & 2016-17 which is forming part of the Paper Book filed before us. 7.1. Further the Assessing Officer has not doubted the sale of flats in the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aceable. That goods were received from the parties other than the persons who had issued bills for such goods Though the purchases are shown to have been made by making payment thereof by account payee cheques, the cheques have been deposited in hank accounts ostensibly in the name of the apparent sellers, thereafter the entire amounts have been withdrawn by bearer cheques and there is no trace or identity of the person withdrawing the amount from the bank accounts in the light of the aforesaid nature of evidence it is not possible to record a different conclusion, different from the one recorded by the Commissioner (Appeals) and the Tribunal concurrently holding that the apparent sellers were not genuine, or were acting as conduit between the assessee-firm and the actual sellers of the raw materials. Both the Commissioner (Appeals) and the Tribunal have, therefore, come to the conclusion that in such circumstances, the likelihood of the purchase price being inflated cannot be ruled out and there is no material to dislodge such finding. The issue is not whether the purchase price reflected in the books of account matches the purchase price stated to have been paid to other persons. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. No. 187/Ahd/2019 10. The Grounds of Appeal raised by C.O. of the Assessee reads as under: 1. The Ld. CIT(A) has erred in law and on facts in confirming the estimated disallowance @ 10% on account of alleged bogus purchases of Rs. 4,17,13,702/- which works out to Rs. 41,71,370/- and the AO has been directed to make the addition of Rs. 41,71,370/- and balance addition of Rs. 3,75,42,332/- on account of bogus purchase has been deleted. On facts and circumstances of the case as well as various judicial pronouncements relied upon by the appellant, the Ld. CIT(A) ought to have deleted the entire disallowance of Rs. 4,17,13,702/- and allowed the appeal in full. 2. The Respondent craves right to add, amend, alter, modify, substitute, delete or modify all or any of the above grounds of cross objection. 11. We do not find any merits in the C.O. filed by the Assessee that the entire disallowance is liable to be deleted for the elaborate reasons stated in the Revenue Appeal in ITA No. 1334/Ahd/2019. Therefore the present C.O. filed by the Assessee is hereby dismissed. 12. In the result, the appeal filed by the Revenue and Cross Objection filed by the Assessee are hereby dismissed. O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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