2024 (2) TMI 1038 - AT - Income Tax

Estimation of income - bogus purchases - HELD THAT - As AO has not doubted the sales and hence considering the ratio of decision of Hon'ble Jurisdictional High Court in the case of CIT v. Nikunj Eximp 2013 (1) TMI 88 - BOMBAY HIGH COURT and CIT Vs. Simit P Sheth 2013 (10) TMI 1028 - GUJARAT HIGH COURT and to meet the ends of justice, set-aside the order of the CIT(A) on this disputed issue and direct the assessing officer to estimate the income @12.5% on unapproved/ bogus purchases and partly allow this ground of appeal of the assessee. Deduction u/sec 80IC - disallowing the claim u/s 80-IC(2)(a) in the assessment order passed u/s 143(3) r.w.s 147 as against the same was allowed by his predecessors while passing the Assessment Order u/s 143(3) - HELD THAT - When a query was raised to Ld.AR to substantiate with the submissions on claim of deduction u/sec 80IC of the Act in lieu of notice U/sec 142(1) of the Act discussed above, made in the original assessment proceedings u/sec 143(3) of the Act , the explanations are not convincing and are not supported with the evidences and similarly the DR also could not express the view on this query. Therefore, considering the principles of natural justice shall provide with one more opportunity of hearing to the assessee to substantiate the case with evidences and information. Accordingly, set aside the order of the CIT(A) on this disputed issue and remit the entire disputed issue of claim of deduction U/sec 80IC of the Act for limited purpose to the file of the Assessing Officer to examine and adjudicate afresh on merits. Appeal filed by the assessee is partly allowed for statistical purposes.

Summary

Issues Involved:
The issues involved in this judgment include the disallowance of alleged purchase from a havala dealer and the denial of claim of deduction under section 80-IC of the Income Tax Act 1961.

Disallowed Purchase from Havala Dealer:
The assessee filed an appeal against the order confirming the disallowance of Rs. 7,69,600 for alleged purchase from a havala dealer. The Assessing Officer (AO) found that the assessee obtained bogus purchase bills, leading to the disallowance. Despite the assessee's submissions, the AO was not satisfied with the explanations provided, resulting in the disallowance. The AO's decision was upheld by the CIT(A) and subsequently by the Tribunal. However, the Tribunal directed the AO to estimate the income at 12.5% on unapproved/bogus purchases, partly allowing this ground of appeal.

Denial of Claim of Deduction under Section 80-IC:
The second issue pertained to the denial of the claim of deduction under section 80-IC of the Act. The assessee contended that the denial was a mere change of opinion by the AO, as the claim had been allowed in previous assessments. The AO had called for details and allowed the claim in the original assessment order. The Tribunal found that the denial of the claim was not tenable and directed the AO to examine and adjudicate afresh on merits, providing the assessee with an opportunity to substantiate the case with evidence and information. The Tribunal allowed this ground of appeal for statistical purposes.

Conclusion:
In conclusion, the appeal filed by the assessee was partly allowed for statistical purposes. The Tribunal set aside the order of the CIT(A) on both disputed issues and provided directions to the AO for re-examination and fresh adjudication based on the facts presented in the case.