TaxTMI 
TaxTMI 
2020 (5) TMI 106
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....eepak Garg is represented for the Revenue. 3. It was submitted by the learned A.R. that the assessee is a partnership firm which is in the business of manufacturing of Tractor & Precision Sheet Metal Work. It was his submission that the assessee had, during the relevant assessment year, done purchase of H.R. and C.R. sheets which are basically M.S. Sheets from one M/s. C.R. Enterprises for a total consideration of Rs. 1,70,55,525/- The assessee had sold the same and he had also disclosed profit on the sales in his P & L a/c. The return of income had been filed for the relevant assessment year on 31-10-2009 disclosing total income of Rs. 6,80,159/-. Certain information had come to the possession of the A.O from the Dy. CIT (Inv) Pune that a....
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....tted that subsequently a show cause notice was issued by the learned Pr. CIT on 22-2-2018 asking the assessee to submit a reply by 27-3-2018. It was his submission that in the show cause notice, the learned Pr. CIT has taken a stand that he proposes to apply the decision of the Hon'ble Gujarat High Court in the case of N.K. Proteins Ltd. Vs. DCIT (2016) 72 Taxman.com 289 (Gujarat) to say that when the entire purchases were found to be bogus then confirming the disallowance of 5% of the bogus purchases goes against the principles of section 68 of the Act. It was the submission that since the assessee did not get adequate time, he was unable to respond to the show cause notice by 27-3-2018 but the assessee had responded on 30-3-2018 with all ....
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....the assessee in the form of such issue of notice. In reply, the learned CIT D.R. submitted that the issue could be restored to the file of the learned CIT for fresh adjudication. However, he failed to explain as to how such an opportunity can be given which would in effect be extending the time limit provided u/s 263 of the Act. The learned CIT D.R. was further requested to explain as to how the provisions of sec. 263 can be applied when the provision of sec. 263(1) specifically provides for "after making or causing to be made such inquiry as he deems necessary" before the learned CIT passed an order on 28-3-2018. The learned CIT D.R. was requested to show as to how and what was the inquiry which has been done by the learned Pr. CIT or the ....
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.... when it came to the order passed u/s 263 he does not say as to how the said assessment order passed u/s 143(3) read with sec. 147 for the A.Y. 2010-11 dated 11-2-2016 is erroneous insofar as it is prejudicial to the interest of revenue. For brevity, the finding of the learned CIT in paras 9 to 13 is extracted herein below. "9. I have gone through assessment order. On the basis of information received from Maharashtra Sales tax Department, it is found that the aforesaid transactions are bogus without actual sale/delivery of goods. Further, on enquiries by the A.O the sellers are found to be nonexistent at the given addresses. The assessee has also failed to file confirmations, failed to produce the suppliers. The letters issued have come ....
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.... conclusion, the A.O shall give an opportunity to the assessee to adduce evidence in support of its claim of purchases, verify its allowability in the light of the prevailing position of law. Hence, to ensure that the assessee is given proper opportunity of being heard and for substantiating its claim, it would be just and proper to set aside the assessment completed on 11-3-2016 for the A.Y. 2010- 11 for de-novo examination of facts. This being done in spirit of the Hon'ble Supreme Court's decision in the case of Rampyari Devi Saraogi Vs. CIT (1969) 67 ITR 84 (SC) wherein it is held that since the assessee is getting an opportunity of being heard, no prejudice is caused to the assessee if the order is set aside. 13. In the result the as....