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TMI Blog2017 (9) TMI 2018X X X X Extracts X X X X X X X X Extracts X X X X ..... f granted by Ld CIT(A) in all the three years, the assessee is assailing his decision in partially sustaining the addition. The assessee has also raised a legal ground challenging the validity of reopening of assessment. All the appeals were heard together and hence they are being disposed of by this common order, for the sake of convenience. 2. The facts relating to the case are discussed in brief. The assessee is engaged in the business of undertaking labour works in offset printing and photo copying. Consequent to the information received from the Sales tax department that certain parties are engaged in the business of providing accommodation bills without actually supplying the materials and upon noticing that the assessee has purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... picious/hawala dealers have not actually supplied goods and the sales tax department has given the said information on the basis of statement given by those parties before them. On the basis of such information, the assessee was asked to prove the genuineness of purchases, since the assessee has purchased materials from some of such suspicious dealers. There should not be any doubt that the responsibility to prove the claim for deduction is placed upon the assessee. The AO noticed that the assessee did not have evidence for transportation of materials, receipt and consumption of materials. The assessee could produce only bills and payment details. It could not obtain confirmation letters from the suppliers to prove the genuineness of purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that it has stopped business dealing for the past few years. However, the assessee could furnish only their address, PAN no., Sales tax number only before the AO. It was submitted that the addition could not be merely for the reason that the assessee could not produce parties. 6. The AO observed that the purchase invoices did not have challan number, order number or details of dispatch. Though it was stamped as paid, it did not contain cheque details. The bank statement did not contain the name of payees. Since the assessee did not have proof for transportation of materials and since the suppliers were not produced and since the suppliers have been stamped as suspicious dealers by the sales tax department, the AO took the view that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has used those materials in its job works and hence the profit element embedded therein should alone be brought to tax. In support of this proposition, the Ld CIT(A) placed reliance on certain case laws. The Ld CIT(A) noticed that the assessee has shown net profit rate ranging from 5.56% to 7.41%. He also noticed that the disallowance of entire amount of purchases would give rise to increase of G.P rate at higher figure. Accordingly he took the view that it would be appropriate to take net profit rate of 8% to sustain addition and accordingly sustained addition to the extent of 8% of the purchases made from suspicious dealers. 9. The Ld A.R reiterated the contentions made before the tax authorities and contended that the purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as followed the decision rendered by co-ordinate bench in this regard. 12. We notice that the assessee has purchased various items from the suspicious dealers and the same was consumed in various orders. Accordingly it was submitted that the assessee could not maintain stock register. We have already observed that, in the absence of stock register, it would be difficult to prove the consumption of materials. Hence we are unable to understand as to how the Ld CIT(A) has held that the assessee has proved the consumption. However, in our view, the submission of the assessee that it would be difficult to maintain stock register in this kind of trade cannot be rejected altogether. Hence there is merit in the view taken by Ld CIT(A) that the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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