2014 (2) TMI 1446

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....ncome for AY 1997-98 on 27.11.97 declaring the total loss of Rs 12,230/-. While finalizing the assessment AO rejected the books of accounts u/s. 145 of the Act by considering the purchase of rough diamonds amounting to Rs 1,68,48,663/- made by the Assessee as bogus purchases and thereafter made addition of the total amount of bogus purchases. In first appeal, CIT (A) upheld the order of AO but in 2nd appeal Tribunal upheld the order of A.O. in rejecting the books of accounts u/s. 145 but thereafter applying the gross profit rate of 12.5% on the total turnover restricted the addition to Rs 21,36,451/-. Against the order of Tribunal in quantum proceedings Assessee moved Hon'ble High Court. Hon'ble High Court vide order dated 23.07.2003 in....

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....ses to be bogus does not survive as the order of the subordinate authority merges with the order of the Superior authority (in the present case the order of CIT (A) merges with the order of Tribunal). He further submitted that against the order of Tribunal, Hon'ble High Court has admitted the appeal of Assessee which is yet to be disposed off. He further submitted that the Tribunal having confirmed the addition sustained by CIT (A) on account of bogus purchases on a different ground namely fall in GP rate, it cannot be said that Assessee has concealed the particulars of income or furnished inaccurate particulars of income so as to levy penalty u/s 271(1)(c). He also placed reliance on the decision in the case of Sudesh Khanna vs ACIT (2....