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2021 (5) TMI 656 - AT - Income TaxValidity of assessment order - jurisdiction of Assessing Officer to pass the assessment order - contention of the assessee is that before changing jurisdiction of the Assessing Officer under section 127 of the Act, the same was not communicated to the assessee - HELD THAT:- As the transfer of jurisdiction of the assessing officer was either covered by the provisions of sub-section (1) or subsection (2) of section 127 of the Act. Thus, the said decisions does not provide any support to the contents of the assessee, being factually at variance. In the case of Advantage Strategic Consulting (P) Ltd [2017 (12) TMI 412 - MADRAS HIGH COURT] after considering various decisions (including the decisions relied by the assessee herein) held that where the jurisdiction of Assessing Officer is transferred within the same city, the assessee cannot pled for opportunity to be granted before an order of transfer, as there is no such statutory requirement under the Act, rather, the said procedure has been specifically excluded. Also the Co-ordinate Bench of Tribunal in assessee’s own case in assessment years 2005-06, 2006-07 and 2008-09 (supra) has dismissed identical ground raised by the assessee challenging jurisdiction of Assessing Officer on same set of facts. We find no infirmity in the impugned order. The ground No.1 of appeal is without any merit, hence, the same is dismissed. Estimation of income - Bogus purchases - assessee is a trader in ferrous and non-ferrous metals - HELD THAT:- Undisputedly, during assessment proceedings, the Assessing Officer accepted the sales declared by the assessee. Without purchases there cannot be sales. The Hon'ble Bombay High Court in the case PCIT vs. Paramshakhti Distributors Pvt. Ltd [2019 (7) TMI 838 - BOMBAY HIGH COURT] has held that it is only the profit embedded in such transactions that has to be disallowed. The entire alleged bogus purchases cannot be added. The G.P. in trading of ferrous and non-ferrous metals generally range between 5% to 8%. CIT(A) has estimated G.P. on bogus purchases at 12.5%. The estimation of G.P. by the CIT(A) in our considered opinion is on higher side. To meet the ends of justice, we restrict G.P. on bogus purchases to 6%. The findings of CIT(A) on this issue are modified to that extent. Disallowance u/s 14A - HELD THAT:- It is no more res-integra that disallowance under section 14A cannot exceed the exempt income earned. Therefore, we direct the Assessing Officer to restrict the disallowance under section 14A to the extent, exempt income earned by the assessee during the period relevant to assessment year 2011-12. Addition on account of deemed rent - HELD THAT:- We find that the issue of deemed rent is recurring. Similar addition was made by the Assessing Officer in AY 2008-09 and 2009-10 on same set of facts. After being unsuccessful before the CIT(A), the assessee carried the issue in appeal before the Tribunal. It would be relevant to mention here that the issue was agitated by the assessee in appeal for AY 2008-09 and 2009-10 before the Tribunal in proceeding arising from assessment made under section 143(3) of the Act. We have considered rival contentions and found that AO & CIT(A) has recorded detailed finding to support ALV of house and shops so arrived at. Nothing was placed before us by learned AR to controvert the findings of lower authorities. Accordingly we do not find any reason to deviate from the findings recorded by lower authorities Since, no change in facts in the impugned assessment year has been brought before us, we find no reason to take a different view. Thus, the ground No.3 of the appeal is dismissed sans-merit.
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