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2017 (7) TMI 566 - ITAT CHANDIGARHDeduction u/s 80IC - disallowance made on account of cash purchases as bogus - Held that:- As for the parties from whom purchases made were held to be bogus since confirmations of their balances was not received the AO, the assessee stated that all bills and vouchers of purchases had been produced before the Assessing Officer time and again and had been examined by the AO also. The Ld. counsel for the assessee further stated that all payments were made to them by cheques or by bank transfers. The assessee also stated that the AO had not doubted the sales by made by the assessee and therefore there was no reason at all to disallow the profit made on account of the purchase and sale transaction attributed to the purchases held bogus Alternatively the assessee stated that the addition made on account of inflated profits had only increased the profit of the business of the assessee and there was no reason or evidence with the AO to hold that the same was on account of income from other sources. Ld.Counsel for the assessee stated that the CBDT had issued a circular No.37/2016 dated 2nd Nov, 2016 wherein it had directed that additions made on account of disallowances made, which resulted in enhancement of profits of assessees eligible to deduction under chapter VIA, should not be denied deduction of the enhanced profits. Thus on all aspects of the addition made the assessee had filed detailed submissions and evidences. A perusal of the order of the CIT(A), on the other hand reveals that she has not dealt with the voluminous submissions made by the assessee but on the contrary has passed a cryptic and non speaking order. The Ld. CIT(A) has merely reiterated the findings of the AO and has miserably failed to deal with the arguments and evidences filed by the assessee in support of its contentions. In the interest of justice therefore, we consider it fit to restore the matter back to the file of the CIT(A) to consider the issue afresh and pass a speaking order in the light of submissions and evidences filed by the assessee and also after taking into consideration the CBDT circular No.37/2016 dated 2nd Nov, 2016 referred to by the assessee in this regard - Grounds raised by the assessee allowed for statistical purposes.
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