2016 (11) TMI 1695 - HC - Income Tax

Bogus purchases - Addition u/s 69C - HELD THAT - Considering the law declared by the Supreme Court in the case of Vijay Proteins Ltd. 2015 (4) TMI 1146 - SC ORDER whereby the Supreme Court has dismissed the SLP and confirmed the order passed by the Gujarat High Court 2008 (3) TMI 323 - GUJARAT HIGH COURT and other decisions of the High Court of Gujarat in the case of Sanjay Oilcake Industries Vs. Commissioner of Income Tax 2008 (3) TMI 323 - GUJARAT HIGH COURT and N.K. Industries Ltd. Vs. Dy. C.I.T., 2016 (6) TMI 1139 - GUJARAT HIGH COURT the parties are bound by the principle of law pronounced in the aforesaid three judgments. We remit back the case to the Assessing Officer for deciding afresh on the factual matrix. The authority will accept the law but the transaction whether it is genuine or not will be verified by the Assessing Officer on the basis of the aforesaid three judgments.

Summary

Issues:
Department appealing Tribunal's decision on the genuineness of purchases made by the assessee under section 69C and its proviso.

Analysis:
The High Court considered the department's appeal challenging the Tribunal's decision. The department questioned whether the purchases made by the assessee were genuine, leading to the addition under section 69C and its proviso. The court heard arguments from both parties and referred to legal precedents, including the Supreme Court's decision in Vijay Proteins Ltd. The court emphasized that the parties are bound by the principles of law established in specific judgments. Consequently, the court remitted the case back to the Assessing Officer for a fresh decision based on the factual circumstances. The Assessing Officer was directed to verify the genuineness of the transactions in light of the mentioned judgments. Ultimately, the court disposed of the appeal, providing clarity on the legal framework to be followed in assessing the genuineness of the purchases.