2015 (11) TMI 1738 - AT - Income Tax

Trading addition - bogus purchases - Held that - Anuj Kumar Varshney & Others vs. ITO (2015 (4) TMI 533 - ITAT JAIPUR) has held that 15% of unverifiable purchases shall be held to be income of the assessee from undisclosed sources in the relevant years. In similar cases ITAT Jaipur Bench has set aside the issue raised in such appeals to the file of the AO to decide the same afresh after the judgement in the case of Anuj Kumar Varshney & others (supra) is delivered following our earlier orders on the same lines this appeal is also accordingly set aside to the file of the AO to decide afresh after giving adequate opportunity of being heard to the assessee. Appeal of the assessee is allowed for statistical purposes

Summary

Issues:
1. Challenge to the confirmation of action by CIT(A) regarding evidences used against the assessee.
2. Dispute over the confirmation of AO's decision on purchases from specific parties being labeled as bogus.
3. Rejection of the books of account by invoking Section 145(3) and subsequent trading addition.

Analysis:

Issue 1:
The appellant contested the decision of the ld. CIT(A) for not providing the evidences used against them, deeming it as a violation of natural justice. The contention was that the action was illegal, unjustified, and arbitrary. The appellant sought relief by requesting the quashing of the assessment order. However, the ITAT Jaipur Bench decided to set aside the appeal to the file of the AO for a fresh decision after the judgment of the Hon'ble Rajasthan High Court in a related case.

Issue 2:
The dispute revolved around the ld. CIT(A) confirming the AO's classification of purchases from specific parties as bogus. The appellant argued against this decision, labeling it as illegal and unjustified. They requested the purchases to be recognized as genuine. The ITAT Jaipur Bench, following its previous orders in similar cases, set aside the appeal for the AO to reevaluate the matter after the judgment of the Hon'ble Rajasthan High Court in a related case.

Issue 3:
Regarding the rejection of the books of account by invoking Section 145(3) and the subsequent trading addition, the appellant challenged the decision of the ld. CIT(A) as illegal and arbitrary. They sought relief by requesting the rejection of the books of account to be quashed and the trading addition to be deleted. The ITAT Jaipur Bench, in line with its approach in similar cases, set aside the appeal for the AO to re-examine the issue after the judgment of the Hon'ble Rajasthan High Court in a related case.

In summary, the ITAT Jaipur Bench allowed the appeal of the assessee for statistical purposes in all three issues, directing the AO to reconsider the matters after the judgment of the Hon'ble Rajasthan High Court in a related case. The decision was made to ensure a fair and just assessment in accordance with legal procedures and principles.