TaxTMI 
TaxTMI 
2021 (10) TMI 966
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....ooks of accounts by invoking the provisions of Section 145(3) of the Act. 2. On the facts & circumstances of the case, Ld. Lower authorities grossly erred in making and confirming addition of Rs. 90,785/- by unlawfully declaring the purchases of Rs. 3,63,139/- as bogus purchases & applying 25% of profit thereon. 3. On the facts & circumstances of the case Ld. Lower authorities grossly erred in making and confirming lump sum disallowance of Rs. 20,000/- out of certain expenditures." 2. In ground No. 1, the assessee has challenged the rejecting of books of account by invoking the provisions of Section 145(3) of the Act. During the course of hearing, the ld. AR of the assessee has not pressed the ground No. 1. Hence, the s....
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....t payee cheque does not prove that the assessee has proved the genuineness of the purchases so made by it. It was accordingly submitted that the AO disallowed 25% of the bogus purchases which is approximately equally to the G.P. shown by the assessee and the same has rightly been confirmed by the ld. CIT(A) and therefore, the said order should be confirmed. 6. We have heard the rival contentions and perused the material available on record. We find that the Assessing officer has rejected the books of accounts by invoking the provisions of section 145(3) and the same are not under dispute before us. Therefore, where the books of accounts have been rejected, the appropriate course of action for the AO is to estimate the gross profit in the....
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....ok results. This act of the Assessing officer itself contradicts the decision of rejecting the books of accounts and books result. The Tribunal in assessee's own case for the assessment year 2006-07 has considered this issue and upheld the order of the ld. CIT(A) in para 2.20 and 2.30 as under:- "2.20 Hence, there are certain concerns for which Revenue got evidence in the form of statement recorded in respect of such parties, opening balance is Rs. 37,06,175/- while the closing balance is Rs. 42,81,496/-. It means that there is an accretion of amount of Rs. 5.75/- lacs. It means that to this extent, accretion ITA No.794& 795/JP/11, 716/JP/12 CO 76& 77/JP/11, 60/JP/12 ACIT vs. M/s Allied Gems Corporation 8 in purchase is without sup....
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....assessee. It means that the assessee failed in establishing the genuineness of the so called trade creditors appearing in its books of account. We are further of the opinion that since in the instant case of the assessee, the point under consideration before us is regarding the genuineness of the liability amounting to Rs. 1,75,26,586 shown by the assessee in its balance-sheet as trade creditors, so it was not relevant for us to consider as to whether the purchases made by the assessee were genuine or not or to whether the assessee has inflated those purchases or not. It is also not material to consider whether the GRs from sale-tax department were verified or not, so, the CIT(A) on considering these points was not justified in deleting the....
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....production of these parties before the AO. The AO has not given the finding that the prices of the goods was inflated by the assessee but the AO doubted the genuineness of the purchases on the ground that the suppliers were found to be accommodation entries providers. When the AO rejected the book results u/s 145(3) of the Act, then the AO after rejection of the books of account can proceed to make the assessment on the basis of best judgment instead of resorting make the addition to the book results. Accordingly, in the facts and circumstances of the case and in view of the decision of this Tribunal in assessee's own case for A.Y. 2006-07 we do not find any error or illegality in the orders of the ld. CIT(A) in restricting the addition to ....