TaxTMI 
TaxTMI 
2020 (1) TMI 727
X X X X Extracts X X X X
X X X X Extracts X X X X
...., the assessee, an individual, is engaged in the business of trading in diamond. For the assessment year under dispute, the assessee filed his return of income declaring income of Rs. 5,64,630. Subsequently, the Assessing Officer received information from the DGIT(Inv.), Mumbai, that during the search and seizure operation conducted under section 132 of the Act in case of Rajendra Jain and his Group on 3rd October 2013, it was found that the said group is providing accommodation entries in the shape of bogus sales and bogus unsecured loans. It was found that the assessee has shown purchases of Rs. 37,32,250, from Shri Anoop Yogendra Jain (M/s Aadi Imoex) during the year under consideration who is affiliated to Shri Rajendra Jain Group. On t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tent. In this context, the learned PCIT observed that the Hon'ble Gujarat High Court in case of N.K. Proteins Ltd. has confirmed 100% addition of non-genuine purchases which has been upheld by the Hon'ble Supreme Court. Thus, he issued a show cause notice to the assessee requiring him to explain why the assessment order should not be held as erroneous and prejudicial to the interests of Revenue and revised. As observed by learned PCIT, the show cause notice dated 6th February 2019, fixing the date of hearing on 18th February 2019, went without any response from the assessee. Accordingly, he proceeded to pass the impugned order under section 263 of the Act holding the assessment order to be erroneous and prejudicial to the interests of R....
X X X X Extracts X X X X
X X X X Extracts X X X X
....luding M/s Aadi Impex and the Assessing Officer while completing the assessment has made addition by estimate the gross profit @ 6% of the non-genuine purchases. He submitted, the assessment order passed under section 143(3) r/w section 147 on 23rd June 2016 has been accepted by the Department as it has not been subjected to any proceedings under section 263 of the Act. Thus, he submitted, the Revenue cannot take different stand on identical issue in respect of two different assessment years. Further, he submitted, the reliance upon the decision of the Hon'ble Supreme Court in N.K. Proteins (supra) is totally irrelevant as the said decision is factually distinguishable and not applicable to the facts of assessee's case. Thus, he subm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he has considered the assessment order to be erroneous and prejudicial to the interests of Revenue primarily for the reason that the Assessing Officer without applying his mind and without enquiry has passed the assessment order. Of course, while doing so, he has also referred to the decision of the Hon'ble Gujarat High Court in N.K. Proteins, subsequently confirmed by the Hon'ble Supreme Court. Keeping in perspective the aforesaid reasoning of learned PCIT if we delve into the facts arising from record, it can be seen that the Assessing Officer initiated proceedings under section 147 of the Act having reason to believe that the purchases worth Rs. 37,32,250, claimed to have been made from Anoojj Yogendra Jain, is non-genuine. In the co....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... accommodation bills from the selling dealers. On the basis of the aforesaid reasoning, the Assessing Officer, thought it prudent to estimate the gross profit on such purchases at 7% and added back to the income of the assessee. Thus, from the aforesaid facts it is very much clear that during the assessment proceedings, the Assessing Officer has not only enquired into the alleged purchase transaction, but has applied his mind to the materials brought on record. In fact, the disputed purchase is the sole reason for which the assessment was re-opened under section 147 of the Act. In view of the aforesaid factual position, the observations of learned PCIT that the Assessing Officer has not applied his mind or has not made enquiry which he shou....