TMI Blog2019 (5) TMI 1311X X X X Extracts X X X X X X X X Extracts X X X X ..... firmity could be found in triggering reassessment proceedings against the assessee - Decided against assessee Violation of principle of natural justice would stand dismissed since nothing on record suggest that the assessee was not provided with sufficient opportunity of being heard and defend his case. Rejection of books of accounts - HELD THAT:- AO has only disturbed the purchases and partial relief has already been provided by first appellate authority. Therefore, there could be no occasion to be aggrieved by rejection of books since the issue is limited to estimation on account of alleged bogus purchases only. This ground stand dismissed. Bogus purchases - Quantum additions - there could be no sale without actual purchase of ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances of the case and in law the Ld. CIT (A) erred in confirming the re-assessment proceeding u/s 147 initiated by the Ld. Assessing officer. 2. On the facts and circumstances of the case and in law the Ld. CIT(A) failed to consider that reassessment proceeding cannot be initiated:- a) No reassessment can be made just to make an enquiry or verification. b) Reassessment proceeding cannot be initiate merely on the information received from investigation wing. c) Reassessment proceeding cannot be initiated when the LD. AO have reason to suspect and not reason to believe. 3. On the facts and circumstances of case and law, the Ld. CIT(A) erred in confirming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f facts are that the assessee being resident individual stated to be engaged in trading of iron steel under proprietary concern namely M/s Maharashtra Metals was assessed for impugned AY u/s 143(3) read with section 147 on 05/03/2015 by Ld. Income Tax Officer-29(1)(2), Mumbai [AO] wherein the income of the assessee was determined at ₹ 281.78 Lacs after sole addition on account of alleged bogus purchases for ₹ 278.12 Lacs as against returned income of ₹ 3.66 Lacs e-filed by the assessee on 22/09/2009 which was processed u/s 143(1). Besides validity of reassessment proceedings, the addition of ₹ 278.12 Lacs as made by Ld. AO on account of alleged bogus purchases is the sole subject matter of present app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2.4 The assessee s statement u/s 131 was recorded on the basis of which conclusions were drawn that the assessee was not even able to identify the parties. No concrete reply, explanation or evidence could be adduced to prove the genuineness of the transactions. Resultantly, the books were rejected u/s 145(3) and aforesaid amount of ₹ 278.12 Lacs was added to the income of the assessee as unexplained investment u/s 69C. 3.1 Aggrieved, the assessee agitated the same with partial success before Ld. CIT(A) vide impugned order dated 14/07/2016, wherein the assessee contested the validity of reassessment proceedings as well as additions on merits. 3.2 On legal ground, it was noted that the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im to establish the genuineness of the transactions. In the above background, the ratio of decision of Hon ble Apex Court rendered in CIT Vs. Durgaprasad More 82 ITR 540 as well as Sumati Dayal Vs. CIT 214 ITR 801 was applied to the factual matrix. 3.4 Proceeding further, in the background of various decisions of higher judicial authorities, Ld. CIT(A) proceeded to estimate the addition on account of alleged bogus purchases in view of the fact that the sales were accepted and therefore, the entire purchases could not be termed as bogus purchases . Therefore, the addition was to be restricted to account for element of profit embedded in purchases. Finally, inter-alia, following the decision of Hon ble Gujarat High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d No. 5 assails rejection of books of accounts. However, we find that Ld. AO has only disturbed the purchases and partial relief has already been provided by first appellate authority. Therefore, there could be no occasion to be aggrieved by rejection of books since the issue is limited to estimation on account of alleged bogus purchases only. This ground stand dismissed. 6. So far as the quantum additions are concerned, we are of the considered opinion that there could be no sale without actual purchase of material keeping in view the assessee s nature of business. The sales turnover was not disputed by the Ld. AO and the assessee was in possession of primary purchase documents viz. copies of invoices and the payments were ..... X X X X Extracts X X X X X X X X Extracts X X X X
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