TMI Blog2017 (12) TMI 739X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the Commissioner of Income Tax (Appeals)-4 Mumbai dated 03.11.2015 for the Assessment Year 2010-11. The only grievance of the Revenue in its appeal is in respect of deletion of addition made u/s 69C of the Act towards bogus purchases by the Assessing Officer. 2. Briefly stated the facts are that the assessee which is into the business of trading in software filed return on 15.10.2010 declaring loss of ₹.50,000/-. The assessment was completed on 30.03.2013 determining the income of the assessee at ₹.10,21,14,250/- while completing the assessment the Assessing Officer made addition of ₹.10,00,92,534/- as unexplained expenditure u/s 69C of the Act in respect of the purchases made from seven (7) parties referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reply and information, the Assessing Officer treated the purchases made from all the seven parties referred to in Page No.2 of the Assessment Order as unexplained expenditure u/s 69C of the Act. 3. Further, the Assessing Officer rejected the Books of Accounts stating that the book results do not reflect the true state of affairs in view of unexplained expenditure made in purchases during this Assessment Year for the reasons mentioned in Para 4 of the Assessment Order. Having rejected the Books of Accounts the Assessing Officer estimated the income of the assessee i.e. net profit from trading of goods at 2% of the turnover in addition to the disallowance made u/s. 69C of the Act on account of non-genuine purchases. 4. On appeal by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seven parties amounting to ₹.10 crores as unexplained expenditure u/s 69C of the Act. Further having rejected the Books of Accounts the Assessing Officer estimated the net profit of the assessee at 2% of the sales. 7. The Ld.CIT(A) based on the admission of the Director Shri Vijay Shah in his statement recorded u/s 131 in the course of Assessment Proceedings wherein it has been admitted that the assessee company entered into only accommodation transactions of bogus purchases and sales transactions, held that assessee is not able to justify with documentary evidences the genuineness of the purchases and sales recorded in the Books of Accounts. Therefore, the Ld.CIT(A) held that entire purchases and sales transactions as per the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the various judicial pronouncements wherein it was held that once the Books of Accounts are rejected and income is estimated there should not be a separate addition based on the entries made in such Books of Accounts. 9. In the case of CIT v. G.K. Contractor [19 DTR 305] the Hon'ble Rajasthan High Court held that when net profit is estimated by the Assessing Officer by rejecting the book results u/s. 145(3) of the Act, no separate addition can be made on account of cash creditor. Similar view has been taken by the Hon'ble Punjab Haryana High Court in the case of CIT v. Dulla ram in ITA.No.122 of 1999 dated 22.10.2013. The Jaipur Bench of the Tribunal in the case of Brahamanand Agarwal v. DCIT in ITA.No.338/JP/2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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