TaxTMI 
TaxTMI 
2015 (6) TMI 965
X X X X Extracts X X X X
X X X X Extracts X X X X
....ase and in Law, the learned CIT has erred in invoking the provision of sec. 263 merely because she wants to take a view different from the one taken by the Assessing Officer and thereby changing the opinion of the Assessing Officer by her opinion. b) In the facts of the case and in Law, the learned CIT has erred in holding that Assessing Off icer failed to verify the claim of the Appellant in respect of purchases of Rs. 2,98,13,059/- from the suppliers mentioned on the MVAT site, even though all the details were furnished to the Assessing Officer. c) In the facts of the case and in Law, the learned CIT has erred in disregarding the fact that similar deduction was already allowed in several scrutiny assessments in earlier years as well. d) In the facts of the case and in Law, the learned CIT has erred in overlooking various judgments pronounced by the different Courts and jurisdictional tribunals. e) In the facts of the case and in Law, the learned CIT has erred in invoking the provision of sec. 263 even though the Assessing Officer took a considered decision to add 15% in respect of alleged purchases from the said suppliers. GENERAL This appeal is filed in time. The ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of the above had come to 12.12 %. Taking the base of this percentage, he estimated the Gross Profit on the above transactions at 15% observing that the assessee would not have to bear any administrative expenditure on the quantum. Accordingly, he added an amount of Rs. 3,60,24,582/- being 15% of the non genuine purchases of Rs. 54,03,687/- to the total, income of the assessee. 4. The Ld. CIT, however, observed that information received from the office of the DGIT(Inv) revealed that the assessee had obtained accommodation bills for purchases in various assessment years from 2007-08 to 2012-13. Such purchases were to the tune of Rs. 3,60,24,582/- for the relevant previous year. The Ld. CIT also observed that while completing assessment u/s. 143(3), the AO had made an addition of Rs. 54,03,687/- worked out on the basis of average GP of last 3 years. The bills were of cutlery, routine repairs etc. The assessee was engaged in running a hotel and thus there were no corresponding sales against these purchases. The entire alleged bogus purchase should have been disallowed by the AO. He therefore was of the view that the order of the assessing officer was erroneous and prejudicial to the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of accounts, quantity wise and value wise. The goods had been consumed in the business or / were shown in the closing stock. It was further submitted that the assessee vide letter dated 18.03.2014 had furnished to the AO the following details: (i) Names of suppliers with amount of purchases (ii) Bank statements showing payments to these parties (iii) Copies of ledger accounts (iv) Copies of bills/delivery challans and confirmation wherever available (v) Judicial pronouncements relied upon. It had been further explained that during the course of assessment proceedings, the Director of the company Shri. Rahim Maredia appeared before the AO and stated that the assessee had been undertaking genuine transactions with the above parties. It had not been established that any part of funds given to these parties had come back to the assessee in any form. The non availability of sellers could not be the reason for terming such purchases as accommodation in nature or as net genuine. The identity of the vendors was established and the payments were made by Account Payee Cheque. The evidence relied to show that the purchases were bogus was information from Sales Tax Department. The c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has neither made any inquiry with regard to the actual purchases so made nor made any inquiry with regard to the genuineness of the expenditure so claimed. As per the Ld. D.R., since the assessee has not sold the goods so purchased or expenses so incurred, there is no reason to apply GP rate on such purchases. As per the Ld. D.R., the assessee has claimed bogus expenses to reduce the profits. However, AO has neither made any inquiry with regard to the genuineness of huge expenditure of Rs. 2,98,13,059/- shown by the assessee nor has made any inquiry with regard to the payments made to the supplier and the amount withdrawn by them from their bank account and how the payments so made by the assessee. 9. We have heard the rival contentions of the Ld. Representatives of both the parties and have also gone through the records. We have also deliberated on the judicial pronouncements cited at bar as well as referred by CIT in his order. In the instant case, assessee is in hotel business and running hotel in the name of Hotel Marine Plaza. Return of income was filed declaring income at Rs. 2,65,76,741/-. During the course of scrutiny assessment, AO found that assessee has made purchases f....