9911796707
TMI Blog2024 (6) TMI 820X X X X Extracts X X X X X X X X Extracts X X X X ..... e. In our view, the AO has accepted the sales declared by the assessee and only proceeded to disallow purchases from Apex Associates, therefore, it was held in the decision of various High Courts, the AO cannot proceed to disallow only the purchases in isolation, therefore, in our considered view disallowance of 12.5% will serve the purpose of justice to both parties. Accordingly, we direct the AO to disallow the purchases @ 12.5%. Accordingly, the appeal filed by the assessee is partly allowed. With regard to appeal filed by the assessee for Assessment Year 2014-15, we observed from the record submitted by the assessee that assessee had made only payment towards the purchases of previous year. AO has only observed that assessee has paid 4, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar, were engaged in providing accommodation entries. 4. In response to notice issued u/s 148, the assessee had filed the return of income. Subsequently, statutory notices u/s 143(2) and 142(1) were issued and served on the assessee, reasons of reopening the assessment also shared with the assessee. 5. The assessee is engaged in the business of manufacture of hose pipes, a proprietorship concern named and style of M/s Pankaj Flexibles. Based on the information received from Investigation Wing, Faridabad, the assessee is one of the beneficiaries of receiving accommodation entries from various concerns and operated by Sh. Pritam Singh and Sh. Ajay Kumar. The Assessing Officer observed that assessee has taken purchase bills from Apex Associ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred both on facts and in law in confirming the order of the AO despite the fact that reopening the assessment under Section 147 of the Act and consequent reassessment order passed under Section 147 of the Act are illegal, invalid and without complying with the statutory conditions and the procedure prescribed under the law. 4 (i) On the facts and circumstances of the case, learned CIT(A), ITD has erred both on facts and in law in confirming the order of the AO despite that the reasons recorded for reopening the assessment does not meet the requirements under section 147 of the Act, bad in law and are contrary to the facts. (ii) That the learned CIT(A), ITD has erred both on facts and in law in confirming the reopening ignoring the fact tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee holding the same to be not genuine invoking section 37(1) of the Act (ii) That the abovesaid disallowance has been confirmed despite the fact that these purchases have been made wholly and exclusively for the purpose of business activities and hence disallowance under section 37(1) is uncalled for. (iii) That the above disallowance has been confirmed rejecting the detailed explanation and evidences brought on records by the assessee during the course of assessment proceedings. 9. On the facts and circumstances of the case, the learned CIT(A), ITD has erred, both on facts and in law in confirming the inference drawn by the AO merely on the basis of a statement of third person at the back of the assessee without providing the opp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in law, in confirming the above said disallowance despite the fact assessee is maintaining proper books of accounts and audited as per law and nothing adverse in the books was pointed out by the AO during the course of assessment proceedings. 15. On the facts and circumstances of the case, the learned CIT(A), ITD has erred, both on facts and in law, in confirming the abovesaid disallowance despite the fact that the quantity purchased and sold being completely tallying, the disallowance made by the AO cannot be sustained. 16. The appellant craves the leave to add, amend or alter any of the grounds of appeal. 8. At the time of hearing, the Ld. AR of the assessee brought to our notice page 10 of the PB and submitted that the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. Based on the above bank statement, he proceeded to make the addition without properly verifying whether the assessee had actual purchased the goods from Apex Associates. 10. On the other hand, the Ld. DR relied on the orders of lower authorities. 11. Considered the rival submissions and material placed on record, we observed that the Assessing Officer had reopened the assessment based on the information received from Investigation Wing wherein the assessee has purchased material from Apex Associates which is controlled by the accommodation entry providers and based on the statement recorded from the entry providers, he came to the conclusion that the assessee has received accommodation entries from Apex Associates. Accordingly, he pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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