TaxTMI 
TaxTMI 
2024 (12) TMI 808
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....T JURISDICTION 1.1 In the facts and the circumstances of the case, and in law, the appellate order framed by the Commissioner of Income tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, ['Ld. CIT (A)'] is bad, illegal and without jurisdiction, as the same is framed in breach of the statutory provisions and the scheme and as otherwise also is not in accordance with the law. 1.2 Otherwise also, in the facts and the circumstances of the case, and in law, the appellate order so framed by the Ld. CIT (A) is bad and illegal void as the same is arbitrary and perverse. WITHOUT PREJUDICE TO THE ABOVE - 2. NATURAL JUSTICE 2.1 The Learned Commissioner of Income tax (Appeals) ["Ld. CIT (A....
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....h addition was called for. 4.4 Without prejudice to the above, assuming but not admitting that some addition was called for, it is submitted that the computation of the addition made by the A.O. is arbitrary, excessive and not in accordance with the law." 2. The assessee is a partnership firm and filed the return of income for AY 2011-12 on 27.07.2011 declaring a total income of Rs. 7,96,770/-. The case was selected for scrutiny and the statutory notices were duly served on the assessee. During the course of hearing, the Assessing Officer (AO) called on the assessee to furnish list of parties with whom the sales and purchases were made above Rs. 50,000/-. In order to verify the genuineness of the purchases, the AO issued a notic....
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.... U/s- 133(6) of the IT Act was issued and send by speed post to all the above 4 parties, Out of which 3 notices are received back from the postal authorities with the remarked that "Not known". In one of the case the relative of the parties informed that no confirmation can be supplied, since person is not alive. It is also noticed that list of the parties from whom assessee made purchase over Rs. 50,000/-, one of the parties appearing in the bogus purchase list, assessee purchased for a sum of Rs. 3,57,000/- is also not found as disclosed and other two parties purchase a below Rs. 50,000/-. While recording the statement by the Sales Tax department and DIT (Inv), all the above mentioned 4 parties admitted that they issued bills as ....
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....random verification made by this office as stated above also reveals that there is high margin of difference in respect of Gross Profit and net profit ratio. As the assessee has purchased bills according to their requirements, the adjustment of profit ratio cannot be ruled out. It is apparent that assessee has not maintained proper books of account as per the accounting principal. Hence the books of account are rejected and profit ratio is enhanced to the extent of difference worked out @ 4.38% (i.e. Gross receipt of the assessee is estimated to 12.58%). The difference on gross profit @ 4.38% is worked out at Rs. 69,35,217/- and added to the total income of the assessee." 4. Accordingly, the AO rejected the books of accounts of the asses....
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....and has simply copy pasted in some other assessee's order. The ld. AR also submitted that the CIT(A) did not give opportunity for hearing through video conferencing as requested by the assessee. Accordingly, the ld. AR submitted that the order of the CIT(A) should be set-aside. 6. The ld. DR on the other hand relied on the orders of the lower authorities. 7. We heard the parties and perused the material on record. The AO based on information received from DDIT(Inv) held that the assessee has entered into bogus purchase transactions with 4 parties totaling to Rs. 5.01 lakhs. The assessee furnished various details pertaining to the alleged bogus transactions before the AO. However, the AO held that the assessee has inflated the purc....
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....the basis on which the has rejected the books of accounts to make addition of GP on the entire purchases is not tenable. With regard to the alleged bogus transactions from the 4 parties, we notice that the assessee has submitted relevant documents such as invoices, stock statement, bank statement etc., and that the AO did not record any adverse findings on the same. Further AO has stated that the 4 parties have admitted to have entered into bogus transaction with the assessee, however the AO did not provide any further details on the said statement and did not share the same with the assessee in spite the assessee requesting the same. The reason for the AO to make the addition by applying the GP on the entire purchase is that the assessee h....