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TMI Blog2022 (4) TMI 541X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. AR has also agreed that the net profit rate of the assessee may be reasonably enhanced so as to prevent the assessee for another round of litigation and for the purpose of finality of the proceedings, which has not been objected by the ld. DR, we direct the Assessing Officer to assess the net profit rate of the assessee @2% of the alleged bogus purchases. The order of ld. PCIT is modified accordingly. The directions given by the ld. PCIT for assessment afresh are set aside. - I.T.A. No.99/Kol/2021 - - - Dated:- 30-3-2022 - Shri Sanjay Garg , Judicial Member And Shri Girish Agrawal , Accountant Member Shri S.M. Surana, Advicate, appeared on behalf of the appellant Shri Sudipta Guha, CIT-DR, appeared on behalf of the resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchases made by the assessee from the alleged shell entity. In reply to the notice, the assessee submitted written submissions which have been reproduced by the ld. PCIT in the impugned order which are further reproduced as under: 4. In response to t he said notice the assessee submitted written submission on 24.02.2021 which is as follows: We are in receipt of the notice u/s 263 dated: 22/01/2021 issued by your honour. The revision proceedings have been initiated in respect of the purchases made by the assessee company from M/s. Dynamic Sales (India) during the Financial Year 2015-16. In this regard, it is hereby stated that in course of the assessment proceedings, the AO in order required the following documents f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s no increase in raw material consumption ratio, there is nothing to dispute the raw material purchases. It is also submitted that the assessee maintains regular books of account and the same are duly audited under the Companies Act, 2013, Income Tax Act, 1961 and also under WBVAT Act. There are no adverse comments by the auditors. Therefore, merely for the reason that the party is not found at its address that also almost 5 years after the dates of transactions, it cannot be said that the purchases are not genuine. We also state that statements per se without any corroborative material have no evidentiary value and nothing has been brought on record to show that any cash has been paid by the supplier to the assessee. It is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid submissions of the assessee, simply held vide para 5 of the impugned order that since there was an information that the assessee was indulged in bogus billings of a shell entity, hence the order passed by the Assessing Officer was erroneous and prejudicial to the interest of the Revenue. He, accordingly, set aside the assessment order to the Assessing Officer for making assessment afresh after considering the issue discussed by him in para 2 of the impugned order. It seems that in fact, the ld. PCIT impliedly directed the Assessing Officer to add the amount of alleged bogus purchases of ₹ 92,04,868/- as the ld. PCIT has mentioned that the aforesaid amount of ₹ 92,04,868/- was transferred to the account of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his, he, therefore, has submitted that the bogus purchases were required to be added regarding which the Assessing Officer has failed to make necessary enquiries. The ld. DR has, therefore, has submitted that the ld. PCIT has rightly exercised his jurisdiction u/s 263 of the Act. 5. We have heard the rival contentions and gone through the records. In this case, there is un-rebutted evidence by the assessee such as the copy of the VAT return, the copy of the excise details, the copy of the stock register and daily register relating to the stock showing that there were purchases of raw material and sales of finished goods. The ld. DR has also not disputed the same. This fact has also not been denied that there cannot be sales of finished g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng another round of litigation but also could avoid multiplicity of litigation. Even otherwise, as per the provisions of section 263 of the Act, the ld. PCIT, either can modify the assessment order, enhance the assessment or may set aside the assessment for a fresh assessment, as he may deem fit, as per facts and circumstances of the case. It is a well-settled law that the appellate authority under the Act, has inherent powers as that of the lower authorities, which can be well exercised in the interest of justice. Considering the facts and circumstances of the case, as suggested by both the ld. representatives of the parties and since the ld. AR has also agreed that the net profit rate of the assessee may be reasonably enhanced so as to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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