TMI Blog2015 (2) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... d opinion, has committed an error of jurisdiction.Tribunal has erred in applying a net profit rate without considering the material collected by the assessing officer and by ignoring relevant facts and factors referred to by the assessing officer, thereby leading to miscarriage of justice and an error of jurisdiction that must necessarily be rectified by the Tribunal itself. - Decided in favour of revenue. - ITA-208-2013 - - - Dated:- 8-1-2015 - MR. RAJIVE BHALLA AND MR. B. S. WALIA, JJ. For the Appellant : Ms.Urvashi Dhugga, Advocate For the Respondent : Mr.Ravi Shankar, Advocate, and Mr.B.M.Monga, Advocate, JUDGEMENT RAJIVE BHALLA, J. (ORAL) The revenue is before us impugning correctness of order dated 23.01.2013, passed by the Income Tax Appellate Tribunal (hereinafter referred to as the 'Tribunal'), Chandigarh Bench 'B', Chandigarh, by seeking answer to the following substantial questions of law: - 1. Whether the order of the ITAT is perverse, in the facts and circumstances of the case, in not deciding the issue of bogus purchases amounting to ₹ 23,37,352/- (i.e. ₹ 18,12,777/- plus ₹ 5,24,575/-) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Stone Crusher, M/s V.K.Contractors and M/s Shamsher Singh Grid Supplier. An addition of ₹ 15,87,181/- was made by holding that these purchases were bogus by referring to variation in the name of the party on the voucher and on the corresponding bill etc. The assessing officer added ₹ 18,12,777/- on account of purchases from M/s V.K.Contractor, Sh.Shamsher Singh Grid Supplier, M/s Sangam Stone Dust Supplier and M/s Dahia Stone Crusher by holding that these are bogus transactions. A sum of ₹ 3,97,800/- claimed on account of repairs and running of machinery was disallowed to the extent of 50% and ₹ 1,98,900/- was added. An addition of ₹ 5 lacs was made under Section 69C of the Act by deleting all the additions and directing the assessing officer to assess income at a net profit rate of 6%. Aggrieved by this order, the assessee filed an appeal. The CIT(A), vide order dated 12.09.2012, deleted the addition of ₹ 5 lacs under Section 69C of the Act but affirmed the other additions and dismissed the appeal. The appeal filed by the assessee before the Tribunal was allowed. Counsel for the revenue submits that the Tribunal had no jurisdiction to di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % and thereafter deleted all additions. The Tribunal, while considering the question of disallowance under Section 40A(3) of the Act held in paragraph 7 of its order, that payments made by the assessee to different persons on different dates were less than ₹ 20,000/- and the CIT(A) had accepted this fact but still proceeded to confirm the assessment by adding ₹ 18,12,777/- which included ₹ 5,24,574/-. After holding as above, the Tribunal proceeded to deal with the matter regarding the bogus bills and held that the assessing officer did not make any inquiries as to the status of the assessee as at best he made general inquiries regarding the non-registration of the supplier with the Sales Tax Authorities and the Pollution Control Board and thereafter abruptly and without assigning any tangible reason, directed the assessing officer to apply a net profit rate of 6% to workout the income of the assessee and deleted all additions. We are of the considered opinion that the impugned order suffers from a fundamental flaw. The Tribunal ignored the evidence relied by the assessing officer particularly the reference to variation in the name of the party on the voucher an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e report reveals that the inspector could not find these firms/entities. Upon receipt of the report and as recorded in the order passed by the assessing officer, the assessee was afforded an opportunity to produce the concerned persons so as to prove the genuineness of the bills. The assessee filed replies which were primarily rejected on the ground that the assessee could not prove the existence of these parties. A relevant extract from the assessment order reads as follows: - The reply submitted by the assessee has been considered and is not acceptable. The assessee not only failed to produce the said persons but was also not able to provide the PAN No./Sales Tax No. or Pollution Clearance certificate of these parties from which he has claimed to have made substantial purchase which have been made in cash. Further, the suppliers mentioned have addresses which are clearly mentioned on their respective bills. Spot verification carried out has clearly shown that no such parties existed at those addresses even in the year under consideration. Thus the contention of the assessee that they were present on-site is not also acceptable. It is also worth mentioning that n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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