as been drawn as per the A.O. that the assessee has not produced the day-wise stock register and books produced for verification are not in working conditions. What is the meaning of the observation is not clear. A.O. has primarily relied upon the findings in Rajendra Jain group search.
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A.O. has not even issued notice to these parties said to be bogus. We find that in this case the sales have not been doubted.
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It is settled law that when sales are not doubted, 100% disallowance for bogus purchase cannot be done. The rationale being no sales is possible without actual purchases. This proposition is supported from the Hon'ble jurisdictional High Court decision in the case of Nikunj Eximp Enterprises [2014 (7) TMI 559 - BOMBAY HIGH COURT] as upheld 100% allowance for the purchases said to be bogus when sales are not doubted. However, in that case all the supplies were to the government agency.
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In the present case, the facts of the case indicate that assessee has made p

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