TaxTMI 
TaxTMI 
2020 (1) TMI 1408
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.... requesting for condonation of delay. After perusing the same, we are convinced that the assessees were prevented by sufficient cause from filing these appeals in time. Hence, we condone the delay and admit all these five appeals. 3. The assessees in these cases had derived income from business. They have filed their return of income u/s 139 of the Act. The Assessing Officer received information from DGIT(Inv.) that each of these assessees have made fictitious purchases. Based on this information The assessment of each of these assessments under appeal were reopened u/s 147 of the Act. The assessees were given a show-cause notice stating that a search was carried out by Maharashtra Sales Tax Department on various entities/persons and it was found that these entities and persons were involved issuance of bogus accommodation bills. The information was passed on DGIT(Inv.), Mumbai and from this information, the DGIT(Inv.) found that the names of the assessee was found in the list as a beneficiary of such accommodation bills. After giving the assessee adequate opportunity of being heard, the Assessing Officer came to the conclusion as follows: "It is crystal clear that the ....
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....ct there is no scope for partial disallowance under the said provision. After considering the reply of the assessee at para 10 of this order he ordered as follows: 10. Accordingly, in view of the facts and circumstances of the case as stated above, and also respectfully following the judgments cited above particularly that in the case of N.K. Proteins vs. DCIT [2017] 84 taxmann.com 195(SC), I am of the considered view that it is deemed fit and appropriate in the interest of justice to disallow the entire expenses claimed as purchases by the assessee, amounting to Rs. 54,13,476/- being bogus purchases. Accordingly, I direct the A.O to reassess the income of the assessee for the relevant A.Y 2009-10 on the issue as discussed above." 5. Aggrieved the assessee is in appeal before us. 6. After hearing rival contentions, we find that the issue is no more res integra. The ITAT Kolkata "B" Bench in the case of Om Foregoing & Engineering P Ltd. vs. PCIT in ITA Nos.509&510/Kol/2017 assessment years 2010-11 & 2011-12 order dated 13.12.2017 on the identical circumstances held as follows: "21. We have given a very careful consideration to the rival submissions. First asp....
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....ards this objective the AO examined the sales and found that the quantity of purchases and corresponding sales matched. The Stock Register for A.,Y.2010-11 and 2011-12 filed by the assessee before the AO are at pages 33 to 39 and 36 to 40 of the paper book filed by the assessee for A.Y.2010-11 and 2011-12 respectively. 23. On examination of the details the AO found that the sales were made to Government and reputed parties and therefore the sales as claimed by the assessee were genuine. Once the sales are genuine corresponding purchases also cannot be denied. The only possibility in the given circumstances was to proceed on the theory that the purchases were made by the assessee in the grey market at a lesser price and the bogus bills were obtained to show higher purchase price and reduce the profit margin as per the books of accounts. The AO adopted this course and estimated the possible suppression of Revenue. The course adopted by the AO was therefore a possible view in law. 24. In the impugned order the CIT is of the opinion that the AO ought to have invoked the provisions of sec.69C of the Act and ought to have added the entire value of bogus purchases and th....
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....n Tatu Rane (supra) and M/s. Amira Pure Foods (P) Ltd (supra) cited by the ld. AR clearly supports the view that Explanation - 2 to sec.263 of the Act will not be of any assistance to the plea of the revenue unless the facts and circumstances set out therein exists in a given case. 27. For the reasons given above, we hold that the orders of the AO were not erroneous and prejudicial to the interest of the revenue for failure to make enquiry on the applicability of Sec.69C of the Act. We, therefore, quash the orders u/s 263 of the Act and allow the appeals of the assessee." 7. The ld. DR could not distinguish the facts and issues of the cases on hand from the facts and issue in the case of Om Foregoing & Engineering P Ltd (supra). Thus, consistent with the view taken therein, we hold that there is no error, in so far as it is prejudicial to the interest of the revenue in all these assessment orders so as to empower the ld. PCIT to invoke his power u/s 263 of the Act. There is no failure to make enquiry on the applicability of section 69C of the Act. In fact the view taken by the ld. Assessing Officer is supported by the judgment of the Hon'ble Calcutta High Court in the c....