TaxTMI 
TaxTMI 
TaxTMI 
2017 (5) TMI 1101
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....ount of alleged bogus purchases confirmed by the Hon'ble CIT(A) to the extent of Rs. 19,51,175/- may be deleted. ITA No.4276/Mum/2016 1. (a) On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in upholding the action of the AO in re-opening of the assessment u/ s.147 of the Income Tax Act, 1961. 2.a) On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in confirming the addition of ~ 18,77,658/- made by the AO to the income of the Appellant on account of possible profit element @ 12.5% embeded in purchases made through alleged non-genuine parties on the basis of information of the Sales Tax Department about suspicious dealers having rejected the accounts u/s.145(3). b) The Id. CIT(A) failed to appreciate that :- i) all the purchases are genuine beyond doubt and supported by sufficient materials; ii) all the goods purchased from these parties have been backed by corresponding sales which are accepted to be genuine; iii) the gross profit ratio shown by the Appellant is quite reasonable; iv) nothing has been brought on record by the AO that money has been exchanged in the hands in lieu of payment made for the....
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....ant to cross examine those parties who have been alleged to have provided the accommodation entries of such purchases. c) In reaching to the conclusion and confirming such addition made by the AO, the Id. CIT(A) omitted to consider relevant factors, considerations, principles and evidences while he was overwhelmed, influenced and prejudiced by irrelevant considerations and factors. d) Without prejudice, the rate or percentage of profit element embeded in such purchases as fixed by the AO and confirmed by the CIT(A) is excessive and unreasonable on the facts of the case. 3. The Id. CIT(A) erred in holding that levy of interest u/s.234B of the Income Tax Act, 1961 is mandatory. The Appellant denies his liability for such interest. 4. The Id. CIT(A) erred in holding that the ground raised disputing initiation of penalty proceedings u/s.271(1)(c) is premature. The Appellant denies his liability for such penalty. ITA No.4760/Mum/2015 1. On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in confirming the re-opening of the assessment U/s.14 7 of the Income Tax Act, 1961 made by the AO as the prescribed conditions therein are not satisfied. 2.....
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....ering Company. The return of income for the year under appeal was filed on 10-08-2009 declaring total income of Rs. 3,17,810/-. The case was reopened u/s 147, by issuing notice u/s 148 of the Act on 26-02-2014, on the basis of the information received from the DGIT (Inv.), Mumbai, that the assessee is one of the beneficiaries of the accommodation entries provided by some of the MVAT dealers who were indulging in issuing bogus sale/purchase bills, which was investigated and kept on the public domain by the Sales Tax Department. Assessment u/s 143(3) r.w.s. 147 of the IT. Act, 1961 was completed by the Ld. AD on 09-03-2015 determining the total income at Rs. 20,85,250/-. The AO relying on the case of CIT Vs Simit P. Sheth [2013] reported in 356 ITR 451 (Guj.) and also considering the fact that purchases are recorded in the books of account, profit element embedded in such purchases was taken as the profit earned from purchases shown to have been made from the eighteen parties and estimated the profit @12.5% of the total non genuine purchases of Rs. 1,41,39,565/- which worked out to Rs. 17,67,445/-, and added the same to the total income of the assessee. 5. By the impugned order, CIT....
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...., one cannot conclude that the purchases were not made by the respondent-assessee. The Assessing Officer as well as the Commissioner of Income-tax (Appeals) have disallowed the deduction of Rs. 1.33 crores on account of purchases merely on the basis of suspicion because the sellers and the canvassing agents have not been produced before them. We find that the order of the Tribunal is well a reasoned order taking into account all the facts before concluding that the purchases of Rs. 1.33 crores was not bogus. No fault can be found with the order dated April 30, 2010, of the Tribunal." 8. As per learned AR, there is no doubt that the AO had accepted the genuineness of sales made by the assessee. He had not made any effort to make further investigation to substantiate his allegations with regard to non genuineness of the purchases. Considering the facts and circumstances of the case, the FAA was not justified in upholding the additions. It was also argued that the dealers are regularly assessed to tax and the purchases were also properly reflected in the books of account and payments were made through account payee cheques and on payment of the amount to the seller, the purchaser ha....
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....cs v. CIT 334 ITR 111 (Cal.), ITO v. Totaram B. Sharma [Tax Appeal Nos. 1344/2008 & 1355/2008, dated 9-2-2010], Dy. CIT v. Adinath Industries [2001] 252 ITR 476 (Guj.), CIT v. Precious Jewels Corpn. 17 taxmann.com 264 (Raj.), CIT v. Rajesh P. Soni [Tax Appeal No.1107 of 2006, dated 27-2-2012. 11. On identical facts and circumstances, the Hon'ble Jurisdictional High Court as well as the Tribunal, Mumbai Bench, has deleted the addition made under section 69C, in the following cases:- i) CIT v/s Nikunj Eximp Enterprise Pvt. Ltd. 372 ITR 619 (Bom.); ii) A"CIT v/s Tarla R. Shah, ITA no.5295/Mum./2013, dated 2nd February 2016; and iii) Shri Harilal Chunilal Jain v/s ITO, ITA no.4547/Mum./2014, dated 1 January 2016. 12. It is evident from the assessment order that on the basis of information obtained from the Sales Tax Department, Assessing Officer issued notices under section 133(6). As the assessee failed to produce the concerned parties, the Assessing Officer, primarily relying upon the information obtained from the Sales Tax Department held the purchases to be bogus and added 12.5% profit in addition to the normal profit declared by the assessee. Though, it may be a fact that....