TMI Blog2017 (12) TMI 1409X X X X Extracts X X X X X X X X Extracts X X X X ..... the correct conclusion relating to the GP rates of the assessee. If necessary, there is a requirement of gathering the GP rates of the businesses of similar nature from the open market and make use of the relevant data for arriving at appropriate GP rate in this line of the business of the assessee. As such, there are various decisions against making of entire bogus purchases as additional income of the assessee. AO is directed to examine all these angles meticulously, i.e. appropriate GP rate, applying the rates of various decisions cited above, the finding of the Settlement Commission in case of the sister concerns and the profits offered by the assessee on this discovery of bogus purchases etc., and grant reasonable opportunity of being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness nexus to the advances given out of interest bearing funds. As per AO, the assessee failed to demonstrate that the said advances were utilized for the business purposes. Therefore, AO came to the conclusion that the assessee has diverted funds for non-business purposes and eventually disallowed the same as business expenditure. Therefore, the interest on the same was also disallowed u/s.36(1)(iii) of the Act. Thus, an amount of ₹ 22,36,000/- was disallowed by the AO. Further, AO also made other addition of ₹ 4.56 crores (rounded off). CIT(A) confirmed the above additions. 3. In the proceedings before the Tribunal, the additions relating to disallowance of interest was eventually remanded to the file of the AO. Contents o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as considering the factual matrix of the case, the developments took place, pending action before the CIT(A), we are of the opinion that the Ld. counsel s prayer should be considered positively. Therefore, we remand the grounds raised by the assessee before us in this penalty-linked appeal to his file for adjudication and decision in tune with his order in the quantum proceedings. Accordingly, the grounds raised by the assessee are allowed for statistical purposes. 5. In the result, appeal of the assessee is allowed for statistical purposes. ITA No.462/PUN/2015 ( By Assessee A.Y. 2009-10) 6. This appeal arises from the reassessment proceedings made by the AO u/s.143(3) r.w.s. 147 of the Act. 7. Briefly s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see could not improve his case during the First Appellate proceedings and the CIT(A) dismissed the appeal of the assessee confirming the said addition on account of bogus purchases. 8. In these background facts of the case, assessee filed the present appeal before us. After narrating the above facts of the case, Ld. Counsel submitted that the grounds raised by the assessee revolves around the erroneous additions confirmed by the CIT(A) made by the AO u/s.69C of the Act. Before us, Ld. AR for the assessee brought our attention to the fact of pendency of the application of the group concerns before the Income-tax Settlement Commission (in short ITSC ) and mentioned that the decision from ITSC if any shall have impact on the additions in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee for the year under consideration. 10. Per Contra, Ld. DR for the Revenue relied heavily on the orders of the AO and the CIT(A). 11. We heard both the parties on this issue of making additions on account of bogus purchases. We find the decision of the jurisdictional High Court in the case of Nikunj Eximp Enterprises Pvt. Ltd., (supra) is relevant for the proposition that while accepting the sales, rejecting the bogus purchases entirely and making entire addition is not in tune with the principles of making sustainable assessment. We also perused the judgment of Hon ble Gujarat High Court in the case of CIT Vs. Simit P. Sheth (supra) which is relevant for the proposition of restricting the addition on account of bogus purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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