TaxTMI 
TaxTMI 
2026 (2) TMI 78
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....nt Year 2018-19. 2. Brief facts of the case are that the assessee filed his return of income on 18.10.2018, declaring total income of INR 5,12,820/-. Based on the available that the assessee had accepted accommodation entries in the form of bogus purchases from M/s. Soni Textiles of INR 11,47,500/-, case was re-opened by issue of notice u/s 148 on 29.03.2022. In response to the notice, assessee filed return of income on 25.11.2022, declaring total income of INR 5,12,820/-. Thereafter, various notices were issued from time to time however, were remained uncompiled with. Thereafter, AO vide order dated 24.02.2023 passed u/s 147 r.w.s. 144B of the Act assessed the income of the assessee at INR 16,60,320/- by making addition of alleged bogus....
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....t was a plausible action under the Act and that the action suggested by the Ld Pr CIT in the impugned order for invoking provision of see 69C on facts of the case is not tenable in law. 4. The appellant craves leave to add, delete, modify / amend the above grounds of appeal with the permission of the Hon'ble appellate authority." 5. As all grounds of appeal taken with respect to the action of the PCIT in holding the reassessment order as erroneous and prejudicial to the interest of the Revenue therefore, they are taken together for consideration. 6. Before us, Ld. AR submits that the AO has made the addition by holding the purchases as bogus accommodation entries against which first appeal is pending before the ld. CIT(A)....
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.... held that once the AO has disallowed the bogus expenditure u/s 37(1), ld. PCIT cannot direct to invoke the provisions of section 69C and further u/s 115BBE of the Act in the order passed u/s 263 of the Act. He thus, prayed for quashing of the order of the ld. PCIT. 8. On the other hand, the Ld. CIT DR for the Revenue vehemently supported the orders of Ld. PCIT and submit that in the instant case, assessee has failed to justify the purchases made thus the same is unexplained expenditure for which the source was not established to the satisfaction of the AO and therefore, Ld. Pr. CIT has rightly directed the AO to invoke the provisions of section 69C r.w.s. 115BBE of the Act. He thus requested that the order of Ld. PCIT deserves to be uph....
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.... under:- "115BBE (1) Where the total income of the assessee- (a) Includes any income referred to in section 68, section 19, section 64 section 698. section 6PC, section 690 and reflected in the return of income furnished under section 139 or (b) Determined by the Assessing Officer includes any income referred to in section 68 section 69, section 69A, section 69B, section 69C, Section 69D if such income is not covered under clause (a) the income tax payable shall be the aggregate of (i) the amount of income tax calculated on the income referred to in clause (a) and clause (b), at the rate of sixty percent, and (ii) the amount of income tax with which the assessee would been chargeable had his tota....
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....der of the AO, disallowance related to expenses incurred by the assessee in relation to subcontractor which were not found to be genuine. Section 69C on the other hand, brings to tax the disallowance related to expenses incurred by the assessee, source of which remain unexplained. Therefore, purview and scope of section 69C is totally different from the disallowance of expenses found to be not genuine. The basic premise with the Id. Pr. CIT therefore for finding error in the order of the AO, that the disallowance made by him of contractors' expense came under the purview of section 69C of the Act is found to be untenable in law. This finding of error, as a consequence whereof, that the same not being subjected to tax at a special rate p....