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TMI Blog2020 (3) TMI 1073X X X X Extracts X X X X X X X X Extracts X X X X ..... 14A r.w.r 8D? 2. Whether on the facts and the circumstances of the case, Ld.CIT(A) was correct in deleting the addition of Rs. 79,13,46,369/- u/s 69C of the I.T Act, 1961 ignoring the fact that the purchases were not genuine and all the notices u/s 133(6) issued to parties were returned undelivered.? 3. The assessee is engaged in the business of marketing of manufactured fertilizers and retailed intermediate products as well as export of frozen and fresh meat. Assessee filed its return of Income on 29.09.2011 declaring an income of Rs. 4,93,25,680/-. The Assessing Officer made disallowance of Commission to Managing Director to the extent of Rs. 2,81,405/-. The Assessing Officer further made disallowance of Rs. 79,13,46,369/- on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition relying upon past history of the assessee. The Ld. DR relied upon the following decisions: ❖ N. K. Proteins Ltd. Vs. CIT(A) (2017-TIOL-23-SC-IT) ❖ N. K. Proteins Ltd. Vs. CIT( 2016-TIOL-3166-H.C-AHM-IT) ❖ CIT(A) Vs. Arun Malhotra 47 taxmann.com 385 (Delhi) 2014 363 ITR 195 ❖ Vijay Proteins Ltd. Vs. ACIT [2015] 58 taxmann.com 44 (Gujrat) ❖ CIT(A) Vs. Medica [2001] 117 Taxman 628 (Delhi)/[2001] 250 ITR 575 (Delhi)/[2001] 168 CTR 314 (Delhi) ❖ Prem Castings (P) Ltd. Vs. CIT(A) [2017] 88 taxmann.com 189 (Allahabad) ❖ Prem Castings (P) Ltd. Vs. CIT2018-TIOL-274-S.C-IT ❖ Konark Structural Engineering (P) Ltd. Vs. DCIT [2018] 90 taxmann.com 56 (Bombay) ❖ PCIT V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing Rule 6DD of IT Rules for Assessment Year 2003- 04 to 2009-10. Appeal for Assessment Year 2010-11 is pending before the Tribunal. However, for the first time in Assessment Year 2011-12, the Assessing Officer has observed at page 9 of the assessment order that the cash purchases of the assessee are not verifiable and then treated the whole of the cash purchases as bogus and then made the addition of the corresponding amount of unverifiable cash purchases as unexplained expenditure in terms of Section 69C of IT Act. The CIT (Appeals) after noticing the past history of the case wherein the disallowances were made against the cash purchase u/s 40A(3) of IT Act, which were subsequently deleted by Tribunal, the learned CIT observed that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of purchases has not been made, has deleted the purchases amounting to Rs. 79.13 crore. The Ld. AR submitted that before the Assessing Officer, the assessee has furnished from the profit & loss account and balance sheet and auditor's report along with tax audit report which includes the quantitative tally of the purchases of meat and exports thereof. The sales which are from exports have been accepted by the Assessing Officer. Such sales have been credited in the bank accounts wherefrom the withdrawals have been made for the payment of purchase and other expenses. It is not the case of the Assessing Officer that no sales have been made by the respondent-assessee. It is not the case of the Assessing Officer that the payments against the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding results, then the GP rate would be worked out @ 83.45% which is impractical in the trade. The Ld. AR submitted the comparative chart of G.P rates as under: HIND INDUSTRIES LTD COMPARATIVE CHART OF GP RATES G. P. RATIOS AND N. P. RATIOS GROSS PROFIT RATIO Financial Year Financial Year Financial Year 2010-11 2009-10 2008-09 SALES 1,383,740,479 1,224,536,391 1,179,610,466 MAERIAL CONSUMED & MAN.EXPENSE 1,090,707,448 975,507,733 936,314,879 INCREASE/DECREASE CLSOING STOCK 70,389,451 49,230,130 48,350,244 GROSS PROFIT 363, 422,482 298,258,788 291,645,831 GROSS PROFIT RATIO 26.26 24.36 24.72 NET PROFIT RATIO TOTAL INCOME 1,465,526,876 1,292,599,263 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7) 15 SOT 290 (Mum). The Ld. AR further submitted that no sales can be made without purchases and hence cannot be a case of bogus purchases as held in case of Balaji Textile Industries Pvt. Ltd. vs. ITO 49 ITD 177 (Mum). The Ld. AR submitted that the case laws as relied by the Assessing Officer and the Ld. DR are distinct on facts and are not applicable to the facts of the assessee. 7. We have heard both the parties and perused the material available on record. As regards to Ground No. 1, the CIT (A) has given a categorical finding that there is no exempt income received by the assessee during the year under consideration. This fact was not disputed by the Revenue. Therefore, the CIT(A) has rightly deleted this disallowance in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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