2020 (9) TMI 619

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....as bogus purchases and the learned CIT(A) further erred in confirming the action of the A.O by treating the same as bogus purchase. 2. That the learned CIT(A) had erred at law as well as on facts in invoking the provisions of section 145(3) without pointing out any defects, but for confirming the trading addition when provisions of section 145(3) were not invoked by the A.O. 3. That the learned Assessing Officer had erred at law as well as on facts in taking 25% of the total amount of purchase value being amount of Rs. 33,69,498/- as income in the nature of trading additions which the learned CIT(Appeals) has reduced to Rs. 17,87,916/-." 2. The hearing of the matter was scheduled through video conferencing in view of the ongoing Cov....

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....by disallowing 25% of such purchases amounting to Rs. 33,69,498/-. On appeal, the ld CIT(A) held that the trading results are not acceptable and the books of accounts were rejected u/s 145(3) and net loss of Rs. 18,02,566/- claimed by the assessee was reduced and assessed at Nil and part relief of Rs. 15,81,582/- was allowed and remaining addition of Rs. 17,87,916/- was sustained. Against the said findings, the assessee is now in appeal before us. 4. In its written submission, the assessee has submitted that the books of accounts were duly maintained and audited u/s 44AB and the Assessing Officer has not pointed out any defects in the books of accounts so maintained by the assessee except that the Assessing Officer was influenced from the ....

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.... by the ld. CIT(A). Further, reliance was placed on the Hon'ble Rajasthan High Court's decision in case of Gotan Lime Khanij Udyog vs. CIT (2002) 256 ITR 243 and Malani Ramjivan Jagannath vs. ACIT (2009) 316 ITR 120. It was accordingly submitted that the action of rejecting the books of accounts and invoking the provisions of section 145(3) simply for the two purchases by the ld. CIT(A) thus may be quashed and trading addition so confirmed be ordered to be deleted. 6. Per contra, ld. DR is heard who has relied on the finding of the lower authorities. It was submitted that it is a clear case of accommodation entries which has been obtained by the assessee as clear from the report of the Investigation wing which has carried out search on M/s....

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.... purchases so made constitute almost 40% of total purchases made by the assessee which remain unverified and unsubstantiated in the sense that the actual purchases were made from these concerns or not is not conclusively established and the assessee has thus failed to discharge the initial onus cast on it, the results so declared by the assessee cannot be held to represent true and fair results and thus, the books results so declared and the books of account so maintained cannot be held reliable and have been rightly rejected u/s 145(3) by ld. CIT(A) and we donot find any infirmity in the said decision of the ld CIT(A) and to that extent, the findings of the ld CIT(A) are sustained. However, once the books of accounts have been rejected, th....