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2022 (11) TMI 1189 - ITAT DELHIAssessment u/s 153C - Whether separate satisfaction has been recorded by the A.O. of the searched person by complying the provisions of Section 153C? - HELD THAT:- As per Apex Court in the case of Super Malls Pvt. Ltd. [2020 (3) TMI 361 - SUPREME COURT] and the satisfaction recorded by the ACIT, Central Circle- 21 who is the common AO of the searched person and the other person, the ground raised by the assessee are liable to be dismissed. Search and seizure operation - Satisfaction though recorded was not based on the material relevant to the year in question and also the additions made were not based on the incriminating material found and seized during the course of search u/s 132. Disallowance of purchases u/s 40A(3) - addition on account of purchases of milk made by the AO - HELD THAT:- CIT(A) has cogently brought on record about the fact of genuineness of the payment and applicability of Rule 6DD along with the relevant case laws. Under the above mentioned facts and circumstances, the CIT(A) held that action of AO u/s 40A(3) is not upheld. Since, no addition has been made by the AO under this section holding that the addition has been made on account of unexplained purchases, any adjudication by the Tribunal would be only academic in nature. Addition on account of unexplained purchases - CIT(A) has recorded the detailed statement of all the purchase parties on oath and came to a conclusion that the identity, genuineness and creditworthiness of the parties has been proved beyond doubt. Hence, the identity, genuineness and creditworthiness of all the parties from whom purchases were made were proved beyond doubt. Hence, no addition is called for on this account. Ad-hoc estimation of GP @ 0.20% on sales by the CIT(A) - We find that the ld. CIT(A) himself held that there is no reason for doubting the purchases made and payment made in cash being the parties are identified and accepted that they have made sale to the appellant in cash and there is no doubt as regard to genuineness of corresponding sales effected by the appellant and rightly deleted the addition on account of unexplained purchases. CIT(A) has verified the purchases by recording statement of suppliers of milk during the appellate proceedings in presence of AO and it is not the case of any inflation in price of the milk purchased by appellant as nothing incriminating was brought on record. Therefore, the action of the CIT(A) to resort to ad-hoc estimation of GP @ 0.20% of total sales is arbitrarily and mechanical. Hence, the action of the ld. CIT(A) cannot be supported and is liable to be deleted.
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