TaxTMI 
TaxTMI 
2017 (8) TMI 1754
X X X X Extracts X X X X
X X X X Extracts X X X X
....eby the Ld. CIT (A) has dismissed both the appeals filed by the assessee against assessment order passed u/s 143 (3) r/w section 147 of the Income Tax Act, 1961 (for short 'the Act'). 2. Since, both the appeals pertain to the same assessee for different assessment years and the facts and issues involved are identical, these appeals were clubbed, heard together and are being disposed of by this common order for the sake of convenience. ITA No. 3571/MUM/2016 (Assessment Year: 2009-10) 3. Brief facts of the case are that the assessee, a private Limited Company engaged in the business of manufacturing of 'kraft paper' filed its return of income for the relevant assessment year declaring the total income of Rs. 75,93,843/-. The return w....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., no octroi is required to be paid. It was further submitted that all the payments are made through banking channels. However, the assessee failed to produce the parties during the assessment proceedings. 5. The AO rejecting the contentions of the assessee held the entire purchases made by the assessee from the said parties as bogus and added the amount of Rs. 2,34,000/- in question to the income of the assessee and determined the total income of the assessee at Rs.78,27,840/-. 6. In the first appeal, the Ld CIT(A) dismissed the appeal filed by the assessee and affirmed the action of the AO relying on the various decision including the decision of the Hon'ble Allahabad High Court rendered in Sri Ganesh Rice Mills vs. CIT 294 ITR 316(A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee has submitted purchase bills from the above parties along with delivery challans, inward register and bank statements and in some cases transport payment vouchers etc. to establish the genuineness of the transaction. The Ld. counsel further submitted that since he facts of the cases relied upon by the Ld. CIT(A) including the facts of the case of Sri Ganesh Rice Mills vs. CIT 294 ITR 316(All) (supra) are distinguishable, the same are not applicable to the present case. The Ld. counsel further submitted that the Ld. CIT(A) ought to have held the reopening as without jurisdiction and bad in law as the AO had no independent and valid reasons to exercise powers u/s 147 of the Act. Relying on the law laid down by the Hon'ble Bombai High C....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rt, Kachwala Gems 288 ITR 10 (SC) Sreelekha Banerjee 49 ITR 112 (SC), Sumati Dayal 214 ITR 801 (Supreme Court), La Medica 250 ITR 575 (Delhi) and the decisions rendered by the various Benches of the Tribunals, submitted that if purchases are not proved to the genuine then the entire purchase needs to be taken as income of the assessee. 10. We notice that the AO has not rejected the books of account and accepted the sales shown by the assessee. We further notice that the assessee has contended before the AO as well as before the Ld. CIT (A) that the parties have given some sort of affidavit and their names are appearing on the website, therefore it cannot be concluded that the parties were nonexistent. The entries regarding the purchases ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ases. On the other hand the law relied upon by the Ld. DR are distinguishable on facts. Hence, we set aside the order of the Ld. CIT (A) and following the ratio laid down in CIT Vs. Nikunj Eximp Enterprises Pvt. Ltd. and CIT vs. Simit P. Seth 356 ITR 451(Guj) the restrict the addition to 12.5% of the total amount of bogus purchase and direct the AO to compute the disallowance in terms of this order. ITA No. 3572/MUM/2016 (Assessment Year: 2010-11) Since, the facts and the issues involved in the present case are identical to the facts and issues involve in the assessee's own case for the A.Y. 2009-10, except the amount of bogus purchases involved, we do not consider it necessary to repeat the same facts here. 2. The assessee has cha....