9911796707
TMI Blog2022 (3) TMI 1308X X X X Extracts X X X X X X X X Extracts X X X X ..... prevent the possibility of revenue leakage. Therefore, we are of the view that disallowances @ 6% of impugned purchases/disputed purchases would be sufficient to meet the possibility of revenue leakage. In the result the ground No. 2 of appeal raised by the assessee is partly allowed and the grounds of appeal raised by revenue are dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ive (ld. DR) submits that assessee's case under consideration is covered by the judgment of the Coordinate Bench of ITAT, Surat in the case of Shri Pankaj Jain Chaudhury in ITA No.1152/AHD/2017, order dated 29.09.2021, wherein the Co-ordinate Bench has upheld the addition at the rate of 6% of bogus purchases. 6. We have heard both the parties and perused the material available on record. We have gone through the reasons recorded by the Assessing Officer and noted reasons were recorded by the Assessing Officer as per the provision of section 147 of the Act and the reasons so recorded by the Assessing Officer are valid in the eye of law, therefore we dismiss the ground raised by assessee on technical issue of reopening under section 147 of the Act. 7. We note that on merit, the assessee's case is covered by the judgment of Co-ordinate Bench in the case of Pankaj K. Chaudhury (supra) wherein the Co-ordinate Bench has inter alia observed as follows: "12. We have heard the submission of ld.CIT-DR for the Revenue and the ld. Authorised Representative (AR) of the assessee. We have also gone through the various documentary evidences furnished by assessee. The ld. CIT-DR for the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning as well as restricting the addition to the extent of 12.50% of the alleged bogus purchases. The ld.AR of the assessee submits during the assessment, the AO has not made any independent investigation. The AO reopened the case of the assessee on the basis of third party information without making any preliminary investigation. The AO received vague information about providing accommodation entry by Bhanwarlal Jain Group. No specific information about the accommodation entry obtained by assessee was received by AO. There is no live link between the reasons recorded qua the assessee. Therefore, the re-opening is invalid and all subsequent action is liable to be set aside. 15. On account of additions of bogus purchases, the ld.AR submits that in the original assessment, the assessee filed its complete details of purchases to prove the genuineness of expenses. The AO accepted the same in the assessment order passed under section 143(3) on 10.03.2009. During re-assessment, the assessee again furnished complete details about the genuineness of purchases. The assessee filed confirmation purchases invoices, accounts of the parties, bank statement of assessee showing transaction to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in Mayank Diamond Private Limited (supra) is directly applicable on the facts of the present case. 17. We have considered the submissions of the parties and have gone through the order of the lower authorities. We have also deliberated on each and every case laws relied by both the parties. We have also examined the financial statement of all the assessee(s) consisting of computation of income and audit report. We have also gone through the documentary evidences furnished in all cases. Ground No.1 in assessee's appeal relates to the validity of reopening. The ld AR for the assessee vehemently argued that the AO reopened the case of the assessee on the basis of third party information, and without making any preliminary investigation, which was vague about the alleged accommodation entry by Bhanwarlal Jain Group. And that there was no specific information about the accommodation entry availed by the assessee. There is no live link between the reasons recorded qua the assessee. We find that the assessee has raised objection against the validity of the reopening before the AO. The objections of the assessee was duly disposed by AO in his order dated 09.02.2015. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We find that the AO while making additions of 100%, of disputed purchases solely relied on the report of the investigation wing Mumbai. No independent investigation was carried by the AO. The AO has not disputed the sale of the assessee. The AO made no comment on the evidences furnished by the assessee. We further find that ld CIT(A), while considering the submissions of the assessee accepted the lapses on the part of the AO and noted that no sale is possible in absence of purchases. The Books of the assessee was not rejected by the AO. The ld CIT(A) on further examination of the facts and various legal submissions find that Ahmedabad Tribunal in Bholanath Poly Fab Private Limited (supra) held that in the such cases the addition of bogus purchases was sustained to the extent of 12%, on the observation that the assessee may have made purchases from elsewhere and obtained the bills from impugned supplier to inflate Gross Profit Rate. The ld CIT(A) by considering the overall facts, concluded that the 100% disallowance of purchase is not justified. We also find that the ld.CIT(A) also considered the decision of jurisdictional High Court in Mayank Diamonds Pvt. Ltd. (supra) and compared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law that under Income-tax, the tax authorities are not entitled to tax the entire transaction, but only the income component of the disputed transaction, to prevent the possibility of revenue leakage. Therefore, considering overall facts and circumstances of the present case, we are of the view that disallowances @ 6% of impugned purchases/disputed purchases would be sufficient to meet the possibility of revenue leakage. In the result the ground No. 2 of appeal raised by the assessee is partly allowed and the grounds of appeal raised by revenue are dismissed. 22. In the result the appeal of revenue is dismissed and the appeal of the assessee is partly allowed." 8. Thus, we note that issue under consideration is squarely covered by the judgment of the Co-ordinate Bench in the case of Pankaj K. Chaudhury (supra). The Ld. Counsel for the assessee did not bring any material on record to controvert the findings of the Co-ordinate Bench in the case of Pankaj K. Chaudhury (supra). Therefore, respectfully following the binding precedent in the case of Pankaj K. Chaudhury (supra), the appeal of the assessee is partly allowed. 9. In the result, appeal filed by the assessee is partly allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
