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TMI Blog2020 (1) TMI 1408X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer is supported by the judgment of the Hon ble Calcutta High Court in the case of PCIT vs. M/s Subarna Rice Mill [ 2018 (8) TMI 1475 - CALCUTTA HIGH COURT ] - Thus we hold that these orders passed u/s 263 of the Act are bad in law and all the orders passed by the PCIT u/s 263 are hereby quashed. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... quot;. The submission furnished by A/R of the assessee is not acceptable. As the assessee got some benefit of such bogus purchase there would be no denial of the fact that assessee's estimated income will increase to certain extent. Considering the fact of the case and on given circumstances, there should be logical conclusion in increasing the income by way of estimated addition of 3% of bogus purchases of ₹ 54,13,476/-. Hence 3% is added on estimate on the bogus purchase. Accordingly, ₹ 1,62,405/- is added to total income of the assessee. Penalty proceedings u/s 271(1)(c) are initiated for furnishing inaccurate particulars." 4. The ld. Principal CIT-10, Kolkata issued a notice u/s 263 of the Act proposing to review and revise the assessment order passed by the Assessing Officer u/s 143(3) of the Act on the ground that there is an error in so far as it is prejudicial to the interest of the Revenue. He was of the view that the Assessing Officer should have made a disallowance of the entire fictitious purchases made through accommodation bills and not simply making a disallowance to the extent of 3% of the bogus purchases. He was of the view that as per section 69C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be bogus. These confirmations are placed at pages 40 to 45 and 41 to 56 of the assesse's paper book for A.Y.2010-11 and 2011-12. The assessee also filed all copies of sales bills of all sales effected by it during the previous year relevant to A.Y.2010-11 and 2011-12. These details are available at page 69- 153 and 91-203 of assessee's paper book for A.Y.2010-11 and 2011-12 respectively. The statement showing the source of funds and the mode of payment for the purchases which were claimed by the revenue to be bogus were also furnished. These details are given as Annexure -I and Annexure-II respectively for A.Y.2010-11 and 2011-12 to this order. 22. In the light of the information received from DGIT (Investigation), Mumbai, and the evidence filed by the assessee claiming that purchases from the aforesaid four parties were genuine, the AO concluded that the purchases from the four parties were not genuine.. This conclusion was based only on the information received by the AO from the DGIT (Investigation), Mumbai. After drawing the above conclusion the issue before the AO was as to whether the entire value of purchases should be added to the total income. Towards this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as observed that the AO ought to have made enquiries from the alleged bogus purchase bill/entry providers and held that purchases were bogus. The AO has already held that the purchases were bogus and the only question before him was as to whether the entire purchases ought to be added as income or only a portion of the purchases towards inflated cost. 26. The CIT has made reference to Explanation-2 to Sec.263 of the Act introduced by the Finance Act, 2015. Explanattion-2 so introduced sets out cases in which order of the AO can be deemed as erroneous. The said explanation does not dispense with compliance or existence of (i) there being no enquiry made by the AO; (ii) the AO's conclusion being contrary to CBDT Circular or (iii) against decision of Jurisdictional High Court or Supreme Court. In the present case the CIT in the impugned order has not brought facts to show the existence of absence of enquiry especially when the AO has already concluded that the purchases by the assessee from four parties mentioned by the DGIT(Investigation) Mumbai in its report were bogus. The decision of the Mumbai and Delhi ITAT in the case of M/s. Shri Narayan Tatu Rane (supra) and M/s. Amira ..... X X X X Extracts X X X X X X X X Extracts X X X X
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