TaxTMI 
TaxTMI 
2017 (4) TMI 1578
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....unts u/s.145 (3) of the Act and on the other hand reducing the addition of Rs. 1,74,37,160/- made by the Assessing Officer, to merely Rs. 5,00,000/- only without giving any justification for the same?" 2.1 This Court while admitting appeal No.668/2011, on 26.04.2017 has framed the following substantial question of law: "Whether in the facts and circumstances of the case, the Tribunal was justified on one hand in confirming the finding of unverified purchases shown by the assessee of Rs. 4,22,34,219/- and consequent rejection of books of accounts u/s.145(3) of the Act and on the other hand reducing the addition of Rs. 1,05,58,554/- made by the Assessing Officer, to merely Rs. 4,00,000/- only without giving any justification for the same?" FACTS IN APPEAL NO.673/2011. 3. The brief facts are that the assessee is engaged in the business of jewellery and gem stones. During the course of assessment proceedings it was revealed that the assessee has made purchases of Rs. 6,97,48,643/- from different parties, which in spite of ample opportunities could not be proved and assessee failed to discharge the primary onus of providing the genuineness of the said purchase. Names o....
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....y Oilcake Industries Vs. Commissioner of Income Tax (2009) 316 ITR 274 (Guj) and N.K. Industries Ltd. Vs. Dy. C.I.T., Tax Appeal No.240/2003 decided on 20.06.2016, the parties are bound by the principle of law pronounced in the aforesaid three judgments. 4. We remit back the case to the Assessing Officer for deciding afresh on the factual matrix. The authority will accept the law but the transaction whether it is genuine or not will be verified by the Assessing Officer on the basis of the aforesaid three judgments. The issues are answered accordingly. The appeal is accordingly disposed of." 5. Counsel for the respondent Mr. Naresh Gupta has taken us to the detailed facts of the case and tried to justify the judgment on facts considering that the books of accounts and other things were not found to be bogus. He has relied upon the decision of Gujarat High Court in the case of Vijay Proteins Ltd. vs. CIT in Income Tax Reference No.139/1996, decided on 09.12.2014 wherein it has been held as under: "12. We have heard learned counsel for both the sides. Having appreciated the material on record, the Tribunal recorded a finding that the transactions in respect of oil....
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....t logically the court should not have decided in favour of the particular party unless it also decided point B in his favour; but point B was not argued or considered by the court. In such circumstances, although point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub silentio. " 7. Counsel for the respondent has also relied upon the decision of this Court in the case of Commissioner of Income Tax. vs. Shri Sindhuja Foods (P) Ltd. (2008) 16 DTR (Raj.) 278 wherein para 4 & 5 has observed as under: "4. For the purpose of satisfying the question as formulated, the learned counsel for the Revenue could not show as to what material has not been considered by the learned Tribunal, and what irrelevant material has been considered in reducing the additions made. Rather an overall consideration of the orders of the AO, the CIT(A) and the learned Tribunal does show, that on account of the assessee having shown bogus purchases, the books of accounts had been rejected, and the matter was proceeded under s. 145. Then, the question remained of determining the income on the basis....
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....88, the purchases from these very parties stood accepted by the Department to a very substantial extent. The Tribunal, as a matter of fact, noticed that no sale invoices were found to be undervalued or the purchases inflated, yet the extraordinary profit in respect of goods sold to M/s. Mazagoan Dock Ltd., Bombay, and as recorded in the books of account which ought to have been taken favourably qua the assessee, was considered "adverse" by the Assessing Officer by adopting an erroneous approach. The Tribunal also affirmed the conclusion drawn by the Commissioner of Income Tax (Appeals) that M/s. Kohinoor Enterprises and M/s. Swami Enterprises are existing parties doing business of scrap metal and had vast financial resources at their disposal. Similar conclusion was drawn by it in respect of M/s. S.P. Metal Works and M/s. A.S. Metal Company also. The assessee's contention that out of total purchases of non-ferrous metal of Rs. 2.44 crores, the Assessing Officer had treated purchases worth Rs. 1.49 crores only as bogus and it was impossible to manufacture the goods shown to have been manufactured by it out of the remaining purchases if the Assessing Officer's conclusion is a....
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.... the remand report of the present AO as discussed hereinabove and I am of the opinion that the appellant's onus to prove the genuineness of the purchases is discharged soon after the receipt of regular purchase bills followed the delivery of goods and payment of sale consideration by Dds/cheques and the utilization of the raw material purchased by the appellant in the process of manufacture of threshers and evidenced by the chart of page No.34 of the assessment order, giving money-wise consumption of various inputs. The genuineness has to be examined at the time of purchases and not years thereafter. The report of the Dy. Director of IT, Indore, which is quite as sketchy does not prove the thing in favour of the Department/does not disprove the genuineness of purchases. Such a report of Dy. Director of IT, Indore in respect of M/s Pooja Steel Sales deserves to be rejected. As far as the report of the Dy. Director of IT with M/s Ashirwad Steels is concerned, the existence of the concerns, a few years before the date of completion has not been denied. The transaction of purchases by way of regular sale bills and subsequent payments etc. discharged the onus of genuineness of purchases....
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....issue in detail and then recorded a finding. Such finding when challenge does not constitute any substantial question of law within the meaning of Section 260A ibid in an appeal arising out of such order." 13. Therefore, counsel for the respondent submits that this appeal deserves to be dismissed. 14. We have heard Mr. Singhi counsel for the department and Mr. Gupta counsel for the assessee. 15. Before proceeding further, it will not be out of place to mention here that one of the partner of the assessee firm was brother of the assessee and even he himself has not produced books of accounts before the Additional Commissioner which has been one of the finding arrived at by both the authorities below. We were inclined to remit the case back in view of the settled law of this Court, however, counsel for the assessee insisted us at behest of respondent to hear the appeals on merits and therefore, we have heard both these appeals on merits. 16. It is well settled that the Tribunal while considering the case and reversing the view taken by the CIT(A) has to justify the reasons for reversing the order of CIT(A). The CIT(A) while considering the case has relied upon the judgmen....