been alleged in the appraisal report. For instances against the purchase of INR 7,537,500,000 from the said parties during financial year 2013 – 14, the sales has been booked at INR 7,976,800,000 resulting to profit of Rs. 43,93,00,000 from the transactions with the alleged bogus parties. d) Similarly, in the financial year 2014 – 15, the profit booked was INR 350,000,000 on the transactions with the said parties instead of the loss as has been alleged in the appraisal report. In view of the same, if the transactions with the said parties are treated as bogus, then the said profit reflected by the assessee in its profit and loss account shall have to be reduced since it cannot be a case where purchases were disallowed as being bogus, but the sales from the same parties are treated genuine and brought to tax. e) In the appraisal report only transactions of purchases have been examined and treated as bogus whereas no such examination of sales to the same parties have been made leading to a suggestion that purchases be disallowed but the sales against the said purchases to same parties leading to a profit have been completely ignored.
Agson Global Pvt. Ltd Vs. ACIT, ITA No. 3741to 3746/Del/2019 (assessee) ITA No. 5264 to 5269/Del/2019 (Revenue) (Assessment Year: 2012-13 to 2017-18) Page | 72 In view of the above situation, it becomes difficult to make an ad hoc addition of 25% of the purchases being bogus as suggested in the appraisal report. Under the circumstances, if both the purchases and the sales in such a situation are to be treated as bogus then it will lead to a reduction in the returned income of the assessee instead of an addition which will be detrimental to the interest of revenue. f) Further keeping in mind the bogus transactions in the case of the assessee, the transactions relating to financial year 2016 – 17 with various parties have been examined in notice the transactions of sales and purchases have been made in the following manner:- i. with M/s Agarwal Enterprises - purchases and sales have been shown at INR 1 34.06 and 134.23 respectively ii. with M/s Kajuwala - purchases and sales have been shown at INR 347,700,000 and INR 162,800,000 iii. with M/s ASM Traxim purchases and sales have been shown at INR 827.33 crores and INR 7 72.01 crores g) the above transactions are suggesting that the assessee company is involved in bogus sales and purchases, which has also been observed by you. The similar trends have also taken place in earlier years also but with similar or different parties. The above facts have also been standard from the stock position is noticed to be short by nearly INR 4 50 crores against the stock recorded in its books of account. In view of the above facts, it is clear that the books of accounts are not genuine and liable to be rejected u/s 145 (3) of the income tax act and the profit rate needs to be estimated on a reasonable basis keeping prevailing market rates in mind.” 90. Thereafter the learned assessing officer in para number 5 suggested that the addition as proposed in the appraisal report in case of the assessee may not be tenable in the eyes of law. Thereafter, the learned deputy director of
- Spring '16
- Progressive Tax, Delhi, AO, CIT Group, Agson Global Pvt