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TMI Blog2019 (3) TMI 2055X X X X Extracts X X X X X X X X Extracts X X X X ..... is Tribunal in the cited case of Rajal Enterprises [ 2018 (10) TMI 2028 - ITAT MUMBAI] when the assessee was able to link the purchases with corresponding sales, the logical conclusion which one can arrived at is, the assessee might not have purchased goods from the declared source but from some other parties. In that event, only the profit element embedded in the bogus purchases can be considered for addition. Therefore, the decision of the AO to restrict the addition to 10% of the bogus purchases is in tune with the consistent view of the tribunal and different high courts in similar nature of cases. That being the case, in our view, the exercise of power under section.263 of the Act in the facts of the present case is invalid. Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... However, subsequently, upon perusal of case records, Ld. Pr.CIT noted that the assessee was not maintaining any quantitative register and could not substantiate the delivery of the material and therefore, the full disallowance was to be made as against 12.5% estimated by Ld. AO keeping in view the decision Hon ble Apex Court rendered in N.K.Proteins Ltd. Vs. DCIT [84 Taxmann.com]. Therefore, applying clause (a) and (d) of explanation 2 to Section 263(1), the order was treated as erroneous as well as prejudicial to the interest of the revenue. Accordingly, the order on the stated issue was set aside for readjudication. Aggrieved, the assessee is in further appeal before us. 5. We find that the co-ordinate bench of this Tribunal in the cited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T has held the assessment order to be erroneous and prejudicial to the interest of revenue primarily for two reasons. Firstly, due to non-consideration of the decision of hon ble Supreme Court in case of N. K. Protein (supra) and secondly, due to lack of proper inquiry. As regards the second allegation of the PCIT, we are unable to agree with the same. The assessment order clearly reveals that the Assessing Officer made necessary inquiry to find out genuineness of purchases. As regards the allegation of nonconsideration of the decision in case of N.K. Protein (supra), it is relevant to note, the said decision was rendered by the hon ble apex court on 16.01.2017 which is much after the completion of assessment on 02.03.2016. Therefore, there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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