TMI Blog2022 (4) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... ent/ Assessee : None ORDER PER RAHUL CHAUDHARY, JUDICIAL MEMBER: 1. By way of the present appeal the Appellant/Department has challenged the order, dated 12.03.2020, passed by the Commissioner of Income Tax (Appeals) -44, Mumbai [hereinafter referred to as CIT(A) ] under section 250 of the Income Tax Act, 1961 [hereinafter referred to as the Act ] in appeal [CIT(A), Mumbai44/10282/2018-19] for the Assessment Year 2011-12, whereby the Ld. CIT(A) had partly allowed the appeal filed by the Assessee against the Assessment Order, dated 21.09.2018, passed under Section 143(3) read with section 263 of the Act. 2. The Revenue has raised the following grounds of appeal:- 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the addition to 10% of the bogus purchases against 100% addition made by AO on account of bogus purchases. 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not considering that the addition was made on the basis of information received from Sales Tax Department, Maharashtra through DIT(Inv.) with regard to bogus purchases made by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been added to the returned income as per the decision of the Hon ble Supreme Court in the case of N.K. Proteins Ltd: 250 taxman 22 (SC). 6. Thereafter, in the set aside proceedings, again assessment was framed under Section 143(3) read with section 263 of the Act vide order, dated 21.09.2018, (hereinafter referred to as the Post-Revision Assessment Order ) and entire amount of bogus purchases of INR 3,01,00,128/- was added to the returned income treating the same as unexplained expenditure under Section 69C of the Act. The relevant extract of the assessment order reads as under: 17. In response to the above show cause notice the representative of the assessee vide his reply dated 24.08.2018 has stated that the judicial pronouncement in the case of M/s. N.K. Proteins Ltd. cannot be applied to the case of the assessee as the facts of both the cases are different. The A.R. of the assessee has given various examples to prove that the issues involved in the case of M/s. N. K. Proteins Ltd. and in the case of assessee are different. He has claimed that the purchases in this case are not bogus but could be treated as inflated . The assessee has further relied on various c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10% of bogus purchases and therefore, are being taken up together. 9. Ld. Departmental Representative appearing before us referred to the Post-Revision Assessment Order and placed reliance of the judgment in the case of NK Proteins Ltd vs DCIT, dated 16.01.2017 [SLP(C) No. 769/2017] to contend that the AO has correctly made addition of 100% of purchases while CIT(A) committed grave error in restricting the addition to 10% of purchases. 10. We have heard the Ld. Departmental Representative and perused the material on record. In paragraph 3.4 of the order impugned herein, the CIT(A) had correctly noted that there cannot be sales without corresponding purchases and therefore, the assessing officer in the Re- Assessment Order had correctly taxed profits element related to suspicious purchases. This fact was also noted by the assessing officer in paragraph 10 of the Post-Revision Assessment Order as under: 10. However, during the re-opened assessment proceedings, the assessee submitted that for the purchases made, there is a corresponding sales angle as well. The income arising from such sales has been shown and offered by the assessee in the profit and loss a/c. Considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries without supplying any goods:- xx xx The AO issued notices u/s 133(6) of the Act to the above stated parties to seek relevant information/documents but the notices were returned un- served. The assessee was asked by the AO to produce these four parties but the assessee could not produce the parties from whom the purchases were made. The AO made additions u/s 69C of the Act of the peak credit outstanding to be payable to these four parties during the year to the tune of ₹ 1,31,88,227/- as against purchases of ₹ 1,13,44,778/- . The credit for purchases from these four parties of ₹ 1,13,44,778/- are appearing in the books of accounts of the assessee. The assessee has to discharge the primary onus as to the genuineness and bonafide of the transaction of purchase of goods. It is observed that the A.O. has made addition of the entire purchases amount to ₹ 1.13 crores by making additions of ₹ 1,31,88,227/- being peak credit payable during the year for purchases to these parties which included balance of ₹ 18,43,451/- for purchases made in the earlier year, while the AO has , however , not doubted the sales made by the assessee against t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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