2017 (4) TMI 1622

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..... assessee is an individual and is proprietor of M/ s. Jatin Enterprises engaged in the business of trading in computer parts. The return of income for the above assessment year has been filed by the assessee on 15/10/2010 declaring a total income of Rs. 485910/. The return was processed u/s 143(1) of the IT Act. The assessee in the profit & loss account of proprietary concern, M/s. Jatin International has debited purchases of Rs. 56040379.55. During the course of assessment proceedings vide notice under section 142 (1) of Act, the assessee was called upon to file the details of purchases, TIN and name & addresses of parties from whom purchases was made. In reply, the assessee filed the details of the same alongwith documentary evidences. Me .....

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..... were returned with a remark "not known", accordingly AO treated entire purchase as bogus and added the same in assessee's income. However, the corresponding sale made by the assessee was not denied by the AO. The entire purchases are supported by the bills issued by the above suppliers and the same have been paid for by account payee cheques either fully or partly. We also found that assessee has asked for statement of these parties given before Sales Tax authorities on the basis of which AO treated the purchases as bogus, however copy of such statement was not furnished nor any opportunity to cross examination was provided to the assessee inspite of his specific request. In the assessment order itself, AO also noted that assessee has asked .....

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..... O has also relied upon a visit report of Asst. Commissioner, Sanjay S. Pawar, Mumbai in respect of one concern namely Jitendra Enterprises. However, the assessee has not purchased any goods from the said concern at all. As per record, the assessee has asked for the copies of statements of the different persons upon which the AO was relying upon as well as their cross examination. It has been stated in the assessee's submission which is reproduced in the assessment order itself at Page 6 (top). This observation in AO's order clearly indicates that ground No.3 taken by revenue is not correct. Keeping in view totality of facts and circumstances of the case, we direct the AO to restrict the addition to the extent of 2.5% of such alleged pur .....

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