AI Drafter 
TaxTMI 
TaxTMI 
2019 (4) TMI 1879
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....Since the grievance of the assessee as well as revenue is common in all the appeals, facts are pari-materia the same and common grounds of appeal have been raised in the cross-appeals, we dispose-off the same by way of this common order for the sake of convenience & brevity. Cross Appeals for AY 2009-10 The grounds raised by the revenue read as under: - 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs. 85,35,705/- on account of bogus purchases. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not considering that the addition was made on the basis of information received from DlT(lnv.) and sales Tax Dep....
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.... section 147. 2. On the facts and circumstances of the case and in law the Ld CIT(A) failed to consider that reassessment proceeding cannot be initiated. a) No reassessment can be made just to make an enquiry or verification. b) Reassessment proceeding cannot be initiate merely on the information received from investigation wing. c) Reassessment proceeding cannot be initiated when the Ld. CIT(A) have reason to suspect and not reason to believe. 3. On the facts and circumstances of case and law the Ld CIT(A) erred in confirming the assessment order under section 143 sub section 3 r w s 147 of income tax Act which is passed against the principal of natural justice. 4. The Ld CIT(A) erred i....
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....e was determined at Rs. 177.02 Lacs after sole addition on account of alleged bogus purchases for Rs. 170.71 Lacs as against returned income of Rs. 6.30 Lacs filed by the assessee on 12/09/2009 which was processed u/s 143(1). The addition of Rs. 170.71 Lacs as made by Ld. AO on account of alleged bogus purchases is the sole subject matter of present appeal before us. 2.2 The reassessment proceedings got triggered pursuant to receipt of certain information from DGIT (Investigation) / Sales Tax Department, Maharashtra wherein it transpired that the assessee stood beneficiary of accommodation purchase bills aggregating to Rs. 682.85 Lacs from 36 suspicious entities, the details of which have already been extracted in para 3.1 of the quantum....
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....ing to Rs. 682.85 Lacs were estimated @25% which resulted into an addition of Rs. 170.71 Lacs in the hands of the assessee. 3. Aggrieved, the assessee agitated the same with partial success before Ld. CIT(A) vide impugned order dated 01/11/2017, wherein the assessee submitted that payments to the suppliers was through banking channels. The Ld. first appellate authority, after considering assessees submissions, factual matrix, documentary evidences etc. came to a conclusion that the rejection of books was not justified. At the same time, inter-alia, relying upon the judgment of Honble Gujarat High Court rendered in CIT Vs. Simit P.Sheth [356 ITR 451] & CIT Vs. Bholanath Poly Fab. P. Ltd. [355 ITR 290], Ld. first appellate authority reduce....
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.... not been disputed by the revenue. The assessee demonstrated movement of stock before lower authorities. At the same time, the assessee failed to conclusively substantiate the delivery of material. Notices issued u/s 133(6) to all the suppliers did not elicit satisfactory response and the assessee failed to produce even a single supplier to confirm the transactions. Therefore, in such a situation, the addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize for profit earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against such bogus purchases, which Ld. first appellate authority has rightly done. However, keeping in view the fa....