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2023 (7) TMI 162 - AT - Income TaxAssessment u/s 153A - Bogus purchases - CIT(A) restricted the disallowance to the extent of 5% - incriminating material found in search or not? - HELD THAT:- The only incriminating evidence claimed the searched party relates to the inwards entry on the register maintained at the gate of factory for the period of August 2013 to February 2014 only. The assessing officer nowhere mentioned in the assessment orders passed under section 153A/143(3) for AY 201-11 & 2011-12 about any incriminating material found during search action on 18.02.2014. Discrepancy, if any in the inward register found at the gate for the period 2013 to 2014 only. Now it is settled position under law that no addition can be made in the unabated assessment u/s 153A in absence of incriminating material as has been held in Saumya Construction (P) limited [2016 (7) TMI 911 - GUJARAT HIGH COURT] and .Kabul Chawla [2015 (9) TMI 80 - DELHI HIGH COURT] Decided in favour of assessee. Rejection of books of accounts - Estimation of income - bogus purchases - HELD THAT:- Mere certain discrepancy at the entry gate cannot be a basis of rejection of entire books results for three assessment years, when no other incriminating evidence was find at the time of search. Thus we do not approve the rejection of books of account. The discloser made by director of the assessee has been honoured in its true spirit. The assessee disclosed Rs. 1.00 crore each for AY 2012- 13 & 2013-14 and Rs. 13.00 Crore for AY 2014-15 and if further addition by approving the rejection of books of account is sustained, the net profit would be unrealistic. Another reason to disapprove the action of AO in rejection of books result of assessee as same assessing officer completed the assessment of one of the purchase party u/s 153A r.w.s 143(3) and all their sale and purchase are accepted as genuine and no variation / addition in their return of income was made, thereby accepted their return income vide assessment order dated 18/11/2015. Thus addition sustained by ld CIT(A) to the extent of 5% of the impugned purchases will not survive. Assessee appeal allowed.
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