2023 (5) TMI 70 - AT - Income Tax

Tribunal upholds assessing officer's jurisdiction, finds incriminating material in absence of bills

Three C Universal Developers Pvt. Ltd. C/o Sanjiv Sapra & Associates LLP Versus ACIT, Central Circle-6, New Delhi.

The Tribunal upheld the jurisdiction of the Assessing Officer under Section 153A, finding the absence of bills and vouchers during the search constituted ... Assessment u/s 153A - incriminating material found during the search or not? - HELD THAT:- This issue has been decided by the Ld. CIT(A) against the assessee. Since the findings of the Ld. CIT(A) remain uncontroverted by the assessee, we decline to interfere and endorse the findings of the Ld. CIT(A). This ground is rejected. Estimation of income - bogus purchases - inflation of purchase price so as to suppress true profits - HELD THAT:- Here are evidences to support the contention of the AR that the corresponding material was received and consumed and the corresponding job-work was job done. As such AO has not adversely commented on this aspect. In fact, the AO has not found any fault with the books of accounts which are audited. It is also an important fact that GP ratio of this assessment year works out to be 15.28% whereas much lower GP ratio (12.56%) has been accepted in the A.Y. 2012-13. Not having doubted the consumption/sales, the motive behind obtaining bogus bills thus, appears to be inflation of purchase price so as to suppress true profits.There is nothing in the order of the Ld. CIT(A) requiring our intervention. Accordingly, we reject these grounds of the assessee in all the AYs involved. Issues Involved:1. Jurisdiction under Section 153A of the Income Tax Act.2. Addition of alleged bogus purchases.3. Levy of interest under Sections 234A and 234B.Summary:1. Jurisdiction under Section 153A:The assessee contested the jurisdiction of the Assessing Officer (AO) under Section 153A, arguing that no incriminating material was found during the search. The CIT(A) rejected this contention, stating that the absence of bills and vouchers during the search and the inability to locate the parties during post-search inquiries constituted incriminating material. The Tribunal endorsed the CIT(A)'s findings, stating that the assessee failed to controvert the findings, thus rejecting the ground.2. Addition of Alleged Bogus Purchases:The AO added amounts for alleged bogus purchases in various assessment years, which were sustained by the CIT(A) to the extent of 12.5% of the alleged bogus purchases. The CIT(A) concluded that the assessee inflated purchase prices to suppress true profits, citing the inability to verify the existence of the parties and the failure to produce bills during the search. The Tribunal agreed with the CIT(A)'s findings, noting that the assessee did not dispute the consumption or sales of goods and that the GP ratio was consistent with prior years. The Tribunal upheld the CIT(A)'s decision, rejecting the grounds related to the addition of bogus purchases.3. Levy of Interest under Sections 234A and 234B:The assessee's grounds regarding the levy of interest under Sections 234A and 234B were noted to be consequential in nature. The Tribunal did not find any reason to interfere with the CIT(A)'s decision on this matter.Conclusion:The Tribunal dismissed all four appeals of the assessee for the assessment years 2010-11, 2011-12, 2013-14, and 2014-15, upholding the CIT(A)'s findings on all issues. The order was pronounced in the open court on May 1, 2023.