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TMI Blog2025 (5) TMI 1408X X X X Extracts X X X X X X X X Extracts X X X X ..... ontractor for various Government Departments and also with private companies. The return of income for the year under appeal was filed on 02.03.2022 at an income of INR 47,24,190/-. The case of the assessee was selected under CASS for complete scrutiny. During the course of assessment proceedings, various notices under section 142(1) were issued which were complied with by the assessee. The AO observed that the assessee has made purchases from various parties and in order to examine the genuineness of the purchases, summons under section 133(6) of the Act were issued to various suppliers. In response to the notices, many parties have filed their submissions and in the last, out of 49 parties with whom the purchases were made, after examining the details filed by them or by the assessee, the AO concluded that purchases from three parties were bogus as the assessee has failed to substantiate the purchases made from them. Accordingly, the AO has made an addition of INR 31,95,74,125/- being the amount of purchases made from these three parties as unexplained expenditure under section 69C of the Act in terms of the order passed under s. 143 r.w.s 144B of the Act dated 15.12.2022. 3. Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of G.P. @ 2.39% on the purchases from three parties could not have made. 3. That the payment of GST on behalf of M/s Krishna Traders was made by the assessee to avoid protracted proceedings and to settle the case with the GST department and further being the end user, otherwise the GST was to be paid by the assessee, if the other party does not comply with the same to earn peace of mind and, as such, the assessee acted as a prudent businessman. 4. That respondent craves leave to add or amend the ground of cross objections before the appeal is finally heard or disposed off." 7. Before us, the Ld.CIT DR for the Revenue supported the order of the AO and submitted that in the instant case, the AO had made detailed enquiries and investigations with respect to the purchases made by the assessee. The Ld.CIT DR submitted that summons under section 133(6) were issued to 49 parties and in case of 24 parties, replies were submitted and for the remaining parties, except two parties, replies were either submitted later by the respective assessee or by the suppliers. However, in respect of three parties namely Krishna Traders (Virendra Singh), Som Enterprises (Mahinder Singh), In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which cannot be achieved in the line of trade of the assessee. He further submits that the Ld.CIT(A) has appreciated these facts while applying the G.P. rate. However, Ld.AR for the assessee stated that merely the assessee has deposited the amount of GST alongwith the interest in respect of the purchases made from Krishna Traders, it cannot be inferred that the assessee has accepted the allegation of in-genuine purchases from that party. As per the Ld.AR for the assessee, under GST Act in section 73(5) of the Act where the suppliers has not paid the taxes on the sales made, the authorities can recover the amount of tax from the buyers of goods and under these provisions, in order to avoid the penal action, the assessee has paid the amount of GST. This payment is nothing to do with the purchases made which was genuine transaction and the purchases were duly supported by bills/vouchers and e-way bills were generated which were sent alongwith transportation of the goods. The Ld.AR further submitted that while applying G.P. rate @ 2.39%, the Ld.CIT(A) has picked the higher G.P. rate of three years including year under appeal. The Ld.AR further submitted that the assessee has duly disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prises, the notices were issued under section 133(6) however, no replies were received by the AO from these parties. Even the assessee has filed only the copy of ledger account as appearing in its books of accounts and neither confirmation nor bank statement etc. were filed in respect of these two parties. Therefore, the purchases made from these parties remained unverified. With regard to Krishna Trader, in response to notice issued under section 133(6) of the Act, a response was received by the AO. After perusing such response, the AO observed that Shri Virendra Singh has stated that he is a salaried employee and is working as Fireman in IOCL for last 10 years and thus he is not carrying out any business in the name of Krishna Traders and having no transactions with the assessee. It is further seen that the GST Department has carried out a survey at the business premises of M/s. Krishna Traders and it was found that no tax was deposited by Krishna Traders on the goods sold by it and subsequently, the assessee has deposited the tax alongwith interest on the purchases made from Krishna Traders. It is further seen that the assessee has filed the copies of the invoices, e-way bills a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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