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Rs.7,32,02,649/- and (ii) M/s Kotsons Impex Pvt. Ltd. : Rs.1,62,71,899/-. As observed by the A.O, the aforesaid items purchased by the assessee formed part of the work-in-progress of its project "Windsor Grande". Information was received by the A.O from the Sales tax department, Maharashtra, as per which the aforesaid supplier parties from whom the assessee had claimed to have made the purchases appeared in the list of the tainted dealers who were engaged in the business of providing accommodation entries/bills without actual supplying of the material in physical form. In the course of the assessment proceedings, the assessee in order to substantiate the genuineness of the aforesaid purchase transactions placed on record supporting documents/details viz. bills, invoices, trail of emails, copies of orders, bank statements, and the photos of all the items lying/fixed at the site of its project viz. Windsor Grande. In order to verify the genuineness of the aforesaid purchase transactions, the A.O issued notices under Sec. 133(6) to the aforementioned parties. One of the party, namely M/s Priya Exim Pvt. ltd. complied with the said notice and submitted its reply. However, the summon which was thereafter issued by the A.O under Sec.131 of the A.O to M/s Priya Exim Pvt. Ltd. was not complied with by the latter. On the other hand, the other party namely M/s Kotsons Impex Pvt. Ltd. did not submit any reply. It was observed by the A.O that the assessee in the course of the survey proceedings had submitted that they had purchased the aforesaid items from M/s Sources Limited. It was the claim of the assessee, that the aforesaid concern had provided the bills of M/s Priya Exim Pvt. Ltd. and M/s Kotson Impex Pvt. Ltd. In order to verify the genuineness of the aforesaid purchase transactions, the A.O deputed his Inspector to physically verify as to whether the assessee was in possession of the various items at its project site, or not. As per the report dated 04.03.2016, it was submitted by the Inspector that he had physically seen and verified all of the items as per the list and the photo album that was submitted by the assessee. On the basis of the aforesaid facts, the A.O was of the view that the assessee had actually purchased the aforesaid goods which were put to use in its sample flats. However, the A.O held a conviction that the assessee would have procured the aforesaid items not from the abovementioned dealers but from the open/grey market. Accordingly, the A.O backed by his aforesaid conviction disallowed 12.5% of the aggregate value of the purchases P a g e |5 ACIT -13(3)(1) Vs. M/s Windsor Realty Pvt. Ltd.

substantiate the genuineness of the aforesaid purchase transactions. It was submitted by the assessee, that the aforesaid items purchased formed part of the work-in-progress of its project "‟Windsor Grande". Further, in order to substantiate the genuineness of its aforesaid purchase transactions, the assessee placed on record supporting documents/details viz. bills, invoices, trail of emails, copies of orders, bank statements, and the photos of all the items lying/fixed at its project site viz. Windsor Grande. In order to verify the genuineness of the aforesaid purchase transactions, the A.O issued notices under Sec. 133(6) to the aforementioned parties. One of the party, namely M/s Priya Exim Pvt. ltd. complied with the aforesaid notice and submitted its reply. However, the summon which was subsequently issued by the A.O under Sec.131 to M/s Priya Exim Pvt. Ltd. was not complied with by the latter. On the other hand, the other party namely M/s Kotsons Impex Pvt. Ltd. did not submit any reply. It was observed by the A.O, that the assessee in the course of the survey proceedings had submitted that they had purchased the aforesaid items from M/s Sources Limited. It was the claim of the assessee, that the aforesaid concern had provided the „bills‟ of M/s Priya Exim Pvt. Ltd. and M/s Kotson Impex Pvt. Ltd. On the basis of the aforesaid facts, the A.O deputed his Inspector to physically verify as to whether the assessee was in actual possession of the various items at its project site, or not. As per the report, dated 04.03.2016, it was submitted by the Inspector that he had physically verified that all of the items as per the list and the photo album that was submitted by the assessee were available at the assesse‟s project site. On the basis of the aforesaid facts, the A.O was of the view that the assessee had actually purchased the aforesaid goods which were thereafter were put to use in its sample flats. However, at the same time, the A.O held a conviction that the assessee would have procured the aforesaid items not from the abovementioned dealers, but at a discounted value from the open/grey market. Accordingly, the A.O backed by his aforesaid conviction disallowed 12.5% of the aggregate value of the purchases which were claimed by the assessee to have been made from the aforementioned parties and carried out a disallowance of Rs.1,11,84,319/- (i.e. 12.5% of the impugned purchases of Rs.8,94,74,548/-). On appeal, the aforesaid addition/disallowance of Rs. 1,11,84,319/- was principally upheld by the CIT(A). At the same time, the CIT(A) directed the A.O to afford an opportunity to the assessee to demonstrate that the correct amount of purchases were debited by it in its profit & loss account. Also, the A.O was directed to re- compute the disallowance, if warranted, after carrying out necessary verification.