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TMI Blog2022 (6) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case the assessee has declared the GP @ 0.78%. It is settled 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. Appeal raised by the assessee is partly allowed. - ITA No.113/SRT/2019 - - - Dated:- 12-4-2022 - Shri Pawan Singh, JM And Dr. A.L.Saini, AM For the Assessee : Shri Prakash Jhunjhunwala, FCA For the Respondent : Ms. Anupama Singla Sr.DR ORDER PER DR. A. L. SAINI, ACCOUNTANT MEMBER: Captioned appeal filed by the assessee, pertaining to assessment year 2008- 09, is directed against the order passed by the Learned Commissioner of Income Tax(Appeals)-1, Surat [ CIT(A) in short], dated 13.09.2017, which in turn arises out of an assessment order passed by the Assessing Officer ( AO for short) under section 144 r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbai who immediately filed the 2nd appeal before Hon'ble ITAT with a prayer of condonation of delay. c) The delay in filing of the appeal is unwilful and there is no gross negligence on my part, however the unintentional delay in filing of 2nd appeal had occurred due to closure of my business and office situated at Surat, Gujarat. 4. I humbly make a prayer before the Hon'ble Income Tax Appellate Tribunal, Surat to adopt a liberal approach and condone the delay in filing of the 2nd appeal. 3. Shri Prakash Jhunjhunwala, Learned Counsel for the assessee, submits that due to closure of assessee`s business, and due to shifting of assessee`s office permanently at Mumbai, the delay in filing the appeal occurred. The ld CIT(A) had dispatched the order on old business address which was closed, therefore assessee could not get the order on time. Besides, both directors of assessee company had shifted their place of residence permanently at Mumbai, hence there was change in address. Due to change in address, there was communication gap between assessee and his legal Counsel. Therefore, ld Counsel prays the Bench that delay in filing the appeal may be condoned. 4. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued beyond 4 years is bad in law since Ld.AO has not pointed out any failure on part of the assessee to disclose fully and truly all material facts necessary for assessment, thereby the reassessment order u/s 147 is bad in law. 3.On facts and circumstances of the case and in law, Ld CIT(A) erred in confirming the addition of entire alleged non-genuine purchase of traded goods made from M/s Casper Enterprises Pvt. Ltd. of Rs.50,00,082/-. 4.The Ld. CIT(A), before making the disallowance of entire purchase of Rs.50,00,082/- ought to have considered the understated vital facts, being: a) The disputed purchase is supported with documentary evidences, being purchase bills, confirmations, bank statements, corresponding sale bills, stock register and other documents. b) The entire payments had been made through banking channel by A/c payee cheques. c) The disputed purchases are supported with corresponding sales. d) The Ld. AO had not brought any contrary documentary evidence on record and made the addition on the basis of information received from Investigation wing. e) The statement of 3rd party recorded at back of the assessee is general in nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 raised ground of appeal before ld CIT(A) while assailing the order of AO on reopening. The ld CIT(A) while considering the ground of appeal against the reopening held that the AO has received report from investigation wing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 the fact of the present case with the facts in Mayank Diamonds Pvt Ltd (supra) and noted that assessee in that case was also engaged in the trading of polished diamonds. The ld CIT(A) noted that in that case the AO mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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