AI Drafter 
TaxTMI 
TaxTMI 
2023 (5) TMI 1346
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....e A.O has made the addition to the income which was already declared by the Appellant in Income Disclosure Scheme, 2016. 3. That the assessee craves to add, amend or delete any of the above grounds of appeal during the course of hearing. 4. The above grounds are without prejudice to each other." 2. Succinctly stated, on the basis of information that had surfaced in the course of survey action u/s. 133A of the Act conducted at the business premises of five rice millers a/w. two brokers on 15.03.2016, it was gathered by the A.O that the assessee as a beneficiary had procured bogus purchase bills of a value of Rs.30,12,000/- during the year under consideration from two parties. Acting upon the aforesaid information, the A.O reopened the case of the assessee u/s.147 of the Act. Notice u/s.148 of the Act dated 30.09.2019 was issued to the assessee. In compliance, the assessee filed his return of income declaring an income of Rs.4,46,500/-. 3. During the course of assessment proceedings, it was observed by the A.O that the assessee had claimed to have made purchases of Rs.30,12,000/- from the following two tainted parties: S. No. Purchases made from Date ....
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....ddition made by the A.O as regards the bogus/unsubstantiated purchases was highly exorbitant, and the same was liable to be restricted to the extent of difference in the gross profit of genuine purchase transactions as against that of bogus/unverified purchase transactions, i.e as held by the Hon'ble High Court of Bombay in the case of M/s Mohammad Haji Adam and Company, ITA No. 1004 of 2016, dated 11.02.2019; (ii) that the Pr. CIT after approving the declaration of the assessee under IDS, 2016, inter alia, for the year under consideration was divested of his jurisdiction to reopen the case of the assessee u/s 147 of the Act; and (iii). Alternatively, the addition towards bogus/unproved purchases made by the A.O while framing the assessment, in backdrop of such purchases/gross profit (to the extent relatable to bogus/unproved purchases) having been subjected to tax under IDS, 2016, had thus resulted to double taxation in the hands of the assessee. 8. I have heard the Ld. authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into ser....
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....es. There was no discrepancy between the purchases shown by the assessee and the sale declared. That being the position, the Tribunal was correct in coming to the conclusion that the purchases cannot be rejected without disturbing the sales in case of a trade. The Tribunal, therefore, correctly restricted the additions limited to the extent of bringing the G.P. rate on purchases at the same rate of other genuine purchases. The decision of the Gujarat High Court in the case of N.K. Industries Ltd. (supra) cannot be applied without reference to the facts. In fact in paragraph 8 of the same Judgment the Court held and observed as under- "So far as the question regarding addition of Rs.3,70,78,125/- as gross profit on sales of Rs.37.08 Crores made by the Assessing Officer despite the fact that the said sales had admittedly been recorded in the regular books during Financial Year 1997-98 is concerned, we are of the view that the assessee cannot be punished since sale price is accepted by the revenue. Therefore, even if 6 % gross profit is taken into account, the corresponding cost price is required to be deducted and tax cannot be levied on the same price. We have to reduce the....
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.... P CIT, Raipur had accepted the disclosure made by the A.O under IDS, 2016, therefore, he had grossly erred in law by thereafter granting his approval to the A.O for reopening the case of the assessee for the said year u/s.147 of the Act. In support of his aforesaid claim, the Ld. AR had taken me through Section 189 and Section 193 of the Income Declaration Scheme, Finance Act, 2016. The Ld. AR further relied on the judgment of the Hon'ble High Court of Calcutta in the case of Pr. CIT Vs. Manju Oswal (2022) 443 ITR 107 (Cal.), wherein it was observed by the Hon'ble High Court that once a declaration made by the assessee under Income Declaration Scheme, 2016 (IDS) had been accepted by Principal Commissioner, such authority is thereafter estopped from taking any steps which would in effect amount to reopening and/or revising the decision already taken on such declaration. 12. As is discernible from the orders of the lower authorities, it transpires that the assessee had not been able to substantiate the authenticity of the purchase transactions in question to the satisfaction of the A.O. Apart from that, I find substance in the observation of the A.O that now when the assessee had....
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....while upholding the order of the Tribunal, had observed, that the addition in the hands of the assessee as regards the bogus/unproved purchases was to be made to the extent of bringing the G.P rate of such purchases at the same rate as those of other genuine purchases. The Hon'ble High Court while concluding as hereinabove had observed, as under: "8. In the present case, as noted above, the assessee was a trader of brics. The A.O found three entities who were indulging in bogus billing activities. A.O. found that the purchases made by the assessee from these entities were bogus. This being a finding of fact, we have proceeded on such basis. Despite this, the question arises whether the Revenue is correct in contending that the entire purchase amount should be added by way of assessee's additional income or the assessee is correct in contending that such logic cannot be applied. The finding of the CIT(A) and the Tribunal would suggest that the department had not disputed the assessee's sales. There was no discrepancy between the purchases shown by the assessee and the sale declared. That being the position, the Tribunal was correct in coming to the conclusion that t....
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....e assessee by following the methodology expounded by the Hon'ble High Court of Bombay in the case of Pr. Commissioner of Income Tax-17 Vs. M/s. Mohhomad Haji Adam & Company (supra) and considering the chart filed by the assessee at Page 158 of APB (culled out in the preceding paragraph of this order) as per which, addition ought to have been confined to an amount of Rs.1,62,307/- (supra). It may, however, be clarified that in the course of set-aside proceedings, the A.O shall verify the correctness of the details furnished by the assessee in the aforesaid chart (Page 158 of APB). 16. At the same time, as the assessee had declared under IDS, 2016 an amount of Rs.5,53,200/- which comprises of, viz. (i) peak bogus purchases claimed by the assessee to have been made from Shri Laxmi Agrotech : Rs.2,80,000/-, Page 150 & 158 of APB; and (ii) towards gross profit of his overall trading transactions during the year: Rs.2,73,200/-, therefore, the same would have a strong bearing while quantifying the addition that would be called for in the hands of the assessee in terms of my aforesaid observations. In order to telescope the aforesaid amount of Rs.5,53,200/- that was declared by the asse....
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....State Co-Operative Marketing Fed (Purchase) 27-Nov-11 Sita Gramoudyog Sewa Sansthan Quantity in Quintal Amount in Rs. 2,61,240.00 9,19,380.00 274.70 992.00 269.50 2,56,294.00 1500.00 14,01,000.00 64.00 59,776.00 90.00 2,13,651.00 01-Dec-11 03-Dec-11 14-Dec-11 Sita Gramoudyog Sewa Sansthan Sita Gramoudyog Sewa Sansthan 20-Dec-11 Sita Gramoudyog Sewa Sansthan 26-Nov-11 29-Nov-11 Shree Gopi Rice Mill Sita Gramoudyog Sewa Sansthan 165.00 1,17,000.00 200.00 2,60,000.00 200.00 2,60,000.00 200.00 2,50,000.00 200.00 2,47,000.00 Maa Sharda Process: 160.00 2,24,000.00 26-Nov-11 Maa Sharda Process 165.00 2,32,650.00 26-Nov-11 26-Nov-11 26-Nov-11 26-Nov-11 Maa Sharda Process Maa Sharda Process Maa Sharda Process 170.00 2,41,400.00 175.00 2,50,250.00 175.00. 2,52,000.00 Maa Sharda Process 175.00 2,53,750.00 26-Nov-11 Maa Sharda Process 180.00 2,52,000.00 Total 5355.20 59,51,391.00 Average Price per quintal (in Rs.). 1,111.33 Excluding 422 quintal Qty and Purchase amount of Rs. 6,00,000 of....