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TMI Blog2021 (12) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... al memo, the crux of the grievance of the assessee is against the revisionary jurisdiction assumed by the Ld. Pr. Commissioner of Income Tax u/s.263 of the Act. 3. At the time of hearing, there was no appearance from assessee either personally or through his Authorized Representative. There was no adjournment petition also filed by the assessee. The case was heard after recording submissions of the Ld. DR. 4. The brief facts in this case are that the assessee is engaged in the business of construction. In this case, the assessment order u/s.143(3) r.w.s.147 of the Act was completed on 02.02.2016 assessing total income at Rs. 29,39,980/-. On perusal of the records, it was noticed by the Assessing Officer that assessment in this case was re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrect in law. 5.1 The Ld. Pr. Commissioner of Income Tax after considering the submissions of the assessee, assessment order and various judicial precedents referred vide Para 7 of his order was of the view that the Assessing Officer is required to re-examine the factual matrix and then decide whether addition of entire purchases or only profit element is warranted in this case and accordingly, the Ld. Pr. Commissioner of Income Tax set aside the matter to Assessing Officer for fresh determination of income after proper examination of facts and law. 6. The Ld. DR for the Revenue has submitted that since it is proved that there are bogus purchases then there is no question of application of percentage basis on the entire purchases and acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble High Court's decision reads as follows: "2. The first question pertains to restricting the addition of Rs. 23.16 Lakhs to Rs. 2,21,600/- by the Tribunal. The Assessing Officer had made the said addition on the ground that the assessee's purchases were found to be bogus. The entire purchase amount was therefore, added to the assessee's income. The Tribunal, however, restricted to the said sum of Rs. 2,21,600/-. The Tribunal recorded that the Assessing Officer has not rejected either the purchases or the sales made out of the said purchases. The Tribunal therefore, was of the opinion that the addition should be restricted to 10% of the total purchases. The Revenue strongly disputes this proposition. 3. Without elaboration, what the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the entire amount of hawala purchase bills requires addition. The Hon'ble jurisdictional High Court in Pr.CIT Vs. Paramshakti Distributors Pvt. Ltd., vide its judgment dated 15.07.2019 in ITA No.413/2017, has sustained the addition @ 10% of the amount of purchases, being, the profit element involved therein. The relevant extracts of the Hon'ble High Court's decision reads as follows: "2. The first question pertains to restricting the addition of Rs. 23.16 Lakhs to Rs. 2,21,600/- by the Tribunal. The Assessing Officer had made the said addition on the ground that the assessee's purchases were found to be bogus. The entire purchase amount was therefore, added to the assessee's income. The Tribunal, however, restricted to the said sum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10% addition of such bogus purchases to be reasonable, whereas, in this case, the Assessing Officer in the assessment order has made disallowance at 20% of such bogus purchases which is more than that held by the Hon'ble Jurisdictional High Court (supra.). In such scenario, there should not be any grievance of the Revenue and revisionary jurisdiction assumed by the Ld. Pr. Commissioner of Income Tax u/s.263 of the Act is therefore uncalled for. Accordingly, we hold that the order passed by the Ld. Pr. Commissioner of Income Tax u/s.263 of the Act is not valid in law under the given circumstances. Hence, we allow the appeal of the assessee. 10. In the result, appeal of the assessee is allowed. Order pronounced on 08th day of October, 2021. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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