TMI Blog2020 (5) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... w the said assessment order passed u/s 143(3) read with sec. 147 for the A.Y. 2010-11 dated 11-2-2016 is erroneous insofar as it is prejudicial to the interest of revenue. CIT also fails to answer the very primary question that if the purchases are going to be treated as bogus and the addition is going to be made of the entirety of the purchases what happens to the sales that have been disclosed, as also the stocks by treating the said purchases as bogus. Sales which have been disclosed cannot be touched. The stock statement of the assessee would also stands disturbed. A perusal of the assessment order however, shows that these have been examined by the A.O and after considering the facts the estimated addition of 5% of purchases have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year on 31-10-2009 disclosing total income of ₹ 6,80,159/-. Certain information had come to the possession of the A.O from the Dy. CIT (Inv) Pune that assessee was beneficiary from bogus Hawala purchases done with Raju Bhanubhai Doshi (C.R. Enterprises), Mumbai, to the extent of ₹ 1,70,55,525/- during the year. Consequently, the case of the assessee was re-opened by issuing notice u/s 148 of the Act and the accounts of the assessee was examined. Details were called for and the assessment was completed on 11-3-2016 u/s 143(3) read with sec. 147 of the Act wherein transactions with M/s, C.R. Enterprises were verified. In the course of assessment proceedings, it was verified by the A.O with regard to the documentary proof f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that since the assessee did not get adequate time, he was unable to respond to the show cause notice by 27-3-2018 but the assessee had responded on 30-3-2018 with all the details as called for by the learned Pr. CIT. It was his submission that however, the Pr. CIT passed an order u/s 263 on 28-3-2018 setting aside the assessment order passed us 143(3) read with sec. 147 of the Act on 11-3-2016 for A.Y. 20-10-11 for fresh determination of income after proper examination of the facts and law. It was his submission that all the issues having been considered by the A.O in the course of re-opened assessment and re-opening of the assessment has been exclusively for the purposes of examining the said alleged Hawala purchases and the A.O having ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned CIT passed an order on 28-3-2018. The learned CIT D.R. was requested to show as to how and what was the inquiry which has been done by the learned Pr. CIT or the inquiry which he has caused to be made before he passed an order u/s 263 of the Act on 28-3-2018. To this, the learned CIT D.R was unable to point out any of the inquiries. It was however, his submission that this was a case of Hawala transaction and the purchases were bogus and that the entire purchases were liable to be assessed as against which the A.O had made the addition of only 5% of the alleged Hawala purchases. The learned CIT D.R. vehemently supported the order of the learned Pr. CIT Kolhapur. 5. We have heard the rival contentions and perused the material on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sellers are found to be nonexistent at the given addresses. The assessee has also failed to file confirmations, failed to produce the suppliers. The letters issued have come back un-served, which proved that the whole purchases were not genuine. As stated above, the Hon ble Supreme Court vide it s judgment in SLP in CC No. 769/2017 has dismissed the SLP filed by the assessee thereby confirming the judgment of the Hon ble Gujarat High Court in the case of N.K. Proteins Ltd Vs. DCIT (2016) 72 Taxman.com 289 (Gujarat) which has held that addition on percentage basis on bogus or Hawala purchases is against the spirit of I.T. Act. Considering all these facts and legal position, the assessment order is required to be set aside. 10. Howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 (SC) wherein it is held that since the assessee is getting an opportunity of being heard, no prejudice is caused to the assessee if the order is set aside. 13. In the result the assessment order as referred above is set aside. 6. The learned Pr. CIT also fails to answer the very primary question that if the purchases are going to be treated as bogus and the addition is going to be made of the entirety of the purchases what happens to the sales that have been disclosed, as also the stocks by treating the said purchases as bogus. Sales which have been disclosed cannot be touched. The stock statement of the assessee would also stands disturbed. A perusal of the assessment order however, shows that these have been examined by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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