9911796707
TMI Blog2023 (6) TMI 1215X X X X Extracts X X X X X X X X Extracts X X X X ..... in ignoring that the reopening made by Ld. A.O is bad in law as the same is merely on the basis of the statement of certain parties made before the sales-tax authorities. The Ld. AO ought tohave formed an independent belief that there is an escapement of income rather than merely relying on the information forwarded by the Sales Tax Authorities and the Investigation Wing of the Income Tax Department. 2. On the facts and circumstances of the case and in law the Ld. CIT (A) erred in confirming the addition of Rs. 31,15,652 as non-genuine purchases on the basis of difference calculated from Purchase as per Stock register and purchase as per Assessment Order, wherein the Ld. CIT (A) has erred by not considering certain purchases made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same is dismissed as not pressed. 2. The assessee is an individual engaged in the business of trading in ferrous and non ferrous metal. For the assessment year 2011-12, the assessee filed the return on 21/09/2011 declaring a total income ofrs.3,22,300/-. The return was processed under section 143(1) of the Income-tax Act (in short, 'the Act'). The Assessing officer issued a reopening notice under section 148 for the reason that the communication was received from Sales-tax department as per which the assessee is involved in taking entries of bogus purchases from the following parties:- S.No. Name of the party Amount 1 Ratandeep tubes 1,355,369 2 Sunidhi Metal 2,011,939 3 Veer Industries 2,179,533 4 Atlas Internati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iling the amount as per the stock register missed out certain entries while sustaining the disallowance. In this regard, the Ld.AR drew our attention to the reconciliation statement prepared party-wise, certain lines items which have not been taken into consideration by the CIT(A) for the purpose of disallowance (page 227 of paper book). The Ld.AR also submitted that the lower authority have not distributed the sales figure and have taken only the purchases as bogus. The Ld.AR in this regard relied on the decision of the Hon'ble Bombay High Court in the case of PCIT vs Mohammed Haji Adam & Company (32019) 104 CCH 0391 (Bom) dated 11/02/2019 where it has been held that - "8. In the present case, as noted above, the assessee was a trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is concerned, we are of the view that the assessee cannot be punished since sale price is accepted by the revenue. Therefore, even if 6 % gross profit is taken into account, the corresponding cost price is required to be deducted and tax cannot be levied on the same price. We have to reduce the selling price accordingly as a result of which profit comes to 5.66 %. Therefore, considering 5.66 % of Rs.3,70,78,1257- which comes to Rs.20,98,621.88 we think it fit to direct the revenue to add Rs.20,98,621.88 as gross profit and make necessary deductions accordingly. Accordingly, the said question is answered partially in favour of the assessee and partially in favour of the revenue. " 5. The Ld.AR relying on the above decision, without prejudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income. The Assessing Officer, based on communication received from the DDIT(Inv) with regard to the information received from sales-tax department, as per which, the assessee is involved in taking bogus entries towards purchases, has computed 100% of the purchases as non genuine and accordingly made the addition. The CIT(A), on the other hand, had admitted the additional evidences submitted by the assessee and has given partial relief only to the extent of 50% of the amount reflected in the stock register. On perusal of records, we notice that there are certain discrepancies in the figures considered by the CIT(A) for the purpose of disallowance and the figures as per assessee's stock register. It is also noticed that the CIT(A) did n ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
