TaxTMI 
TaxTMI 
2022 (5) TMI 947
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....rd and are decided by consolidate order to avoid the conflicting decision. For appreciation of fact, facts for AY 2007-08 is treated as 'lead' case. The assesseein its appeal in ITA No. 473/SRT/2018has raised the following grounds of appeal:- "1. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer in reopening assessment by issuing notice u/s 148 of the I.T. Act, 1961. 2. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer in passing the ex parte order u/s 144 of the I.t. Act, 1961. 3. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer in disallowing purchases of Rs. 21,64,085/- made from M/s Nice Diamonds. 4. It is therefore, prayed that above the assessment order may kindly be quashed or in the alternative, additions made by assessing officer and confirmed by Commission....
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....ter considering the submission of assessee as well as material available on record, upheld the validity of reopening by referring the decisions of the various Hon'ble Courts by taking view that the assessing officer initiated the action under section 147/148 as per law. On merit, the ld. CIT(A) by following the decision of Hon'ble Jurisdictional High Court in the case of M/s N.K. Proteins Ltd. (2016) (6) TMI 1139, which was confirmed by the Hon'ble Supreme Court in the case of M/s NK Proteins Ltd. (2017-TIOL 23 SC IT) wherein the Hon'ble Court has directed that 100% of bogus purchases be added to total income of assessee. On the basis of the above judgements, the ld. CIT(A) has upheld the action taken by the Assessing officer by confirming the total disallowance with regard to bogus purchases of Rs. 21,64,085/-. Further aggrieved by the order of the ld. CIT(A), the assessee has preferred the present appeal before us. 5. We have heard the submissions of the learned authorised representative (AR) for the assessee and the ld. Sr. Department Representative (Sr. DR) for the Revenue. The learned AR for the assessee submits that the notices under section 148 were not received by the as....
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....llowance made by the A.O. was justified as the assessee failed to prove the genuineness of the purchases. The learned CIT(A) confirmed the addition to the extent of 100% on the basis of decision of Hon'ble Jurisdictional High Court in the case of M/s N.K. Proteins Ltd. (2016) (6) TMI 1139, which was confirmed by the Hon'ble Supreme Court in the case of M/s NK Proteins Ltd. (2017-TIOL 23 SC IT). 8. We have considered the rival submissions of both the parties and have gone through the orders of the lower authorities. We find that the Assessing Officer made disallowance of entire purchases shown from M/s Nice Diamonds. Before making disallowance, the Assessing Officer initiated the reopening proceedings on the ground that various statutory notices were issued and served upon the assessee though postal receipts including the notice under Section 148 of the Act which was issued on 28/03/2015 and served upon the assessee by speed post but neither the assessee was appeared not any written submission with regard to the factual fact has been filed on behalf of the assessee. The ld. Authorised representative of the assessee vide their letter dated 11/03/2015 had communicated to the Assess....
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....is not applicable on the facts of the present case. Before, ld CIT(A) the assessee also urged that only profit element embedded in such disputed purchases are to be disallowed as held by Hon'ble Gujarat High Court in CIT Vs Bholanath Polyfab Pvt Ltd. (355 ITR 290 Guj), CIT Vs Simith P Sheth (38 Taxman 385 Guj) and other similar case laws. 10. It is a settled law that in case of disputed purchases shown from such hawala dealer's only profit element embedded in such transaction is to be disallowed, to avoid the possibility of revenue leakage and not the substantial part of transaction. No doubt, the Assessing Officer identified the purchases of Rs.21,64,085 shown from hawala dealers, the assessee may have shown other transaction with some other parties. However, the assessee has offered income of Rs. 19,50,111/- for taxation. The assessee has shown gross profit at 3.42% and net profit at 1.98%, thus the assessee was shown an extremely low profit. The combination of this bench in other similar cases wherein the purchases are shown from Bhanwarlal Jain or Rajendra Jain or Gautam Jain group have restricted or enhanced the addition to the extent of 6% of such amount or disputed purcha....