TMI Blog2023 (6) TMI 1215X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee and there is per se violation of Rule 46A of the Income-tax Rules, 1962. The issue should go back to the AO for fresh verification of the evidences submitted by the assessee. Accordingly we remit the issue for a fresh verification to the AO with a direction to consider the reconciliation statement of the stock register prepared by the assessee and also to keep in mind the decision of Mohammed Haji Adam Co [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT] as held that profit embedded in the sale of bogus purchases can only be added since the AO in the instant case as noted has not disturbed the sales figures shown by the assessee and decide accordingly. Needless to say that the assessee be given an opportunity of being heard. Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll. 3. On the facts and circumstances of the case and in law the Ld. CIT (A) erred in upholding addition @ 50% of balance amount of alleged Bogus purchase i.e. Rs. 42,50,040 being 50% of (Rs. 1,16,15,733 - Rs. 31,15,652) without considering the submissions of the appellant that the purchases are genuine purchases for which the Appellant had duly furnished the invoices, copies of bank statement supporting the payment made through banking channeli.e. by account payee cheque only, Stock register showing subsequent sale and therebydischarged the onus regarding purchases made by Appellant. 4. On the facts and circumstances of the case and in law the Ld.CIT (A) erred in appreciating that the Ld A.O has not doubted the subsequent sale of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,011,939 3 Veer Industries 2,179,533 4 Atlas International 573,113 5 Nirma Metal Industries 1,285,056 6 Kanak Metal Industries 4,210,723 TOTAL 1,16,15,733 3. The assessee did not file any return in response to notice under section 148. Further notices issued by the Assessing Officer was returned unserved and the assessee did not respond even to the final notice of opportunity issued by the Assessing Officer. Therefore, the Assessing Officer passed an order u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure and have taken only the purchases as bogus. The Ld.AR in this regard relied on the decision of the Hon'ble Bombay High Court in the case of PCIT vs Mohammed Haji Adam Company (32019) 104 CCH 0391 (Bom) dated 11/02/2019 where it has been held that 8. In the present case, as noted above, the assessee was a trader of fabrics. The A.O. found three entities who were indulging in bogus billing activities. A.O. found that the purchases made by the assessee from these entities were bogus. This being a finding of fact, we have proceeded on such basis. Despite this, the question arises whether the Revenue is correct in contending that the entire purchase amount should be added by way of assessee's additional income or the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich comes to Rs.20,98,621.88 we think it fit to direct the revenue to add Rs.20,98,621.88 as gross profit and make necessary deductions accordingly. Accordingly, the said question is answered partially in favour of the assessee and partially in favour of the revenue. 5. The Ld.AR relying on the above decision, without prejudice submitted that the GP ratio of 8% can be considered for the purpose of making the disallowance and not the entire bogus purchases. The Ld.AR drew our attention to the P L Account and the balance-sheet of the assessee wherein it is noticed that the total purchases of the assessee as per the statement of accounts is Rs.1,33,24,493/- whereas the Assessing Officer has made an addition of Rs.1.16 crores which is mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and has given partial relief only to the extent of 50% of the amount reflected in the stock register. On perusal of records, we notice that there are certain discrepancies in the figures considered by the CIT(A) for the purpose of disallowance and the figures as per assessee's stock register. It is also noticed that the CIT(A) did not call for any remand report from the Assessing Officer with regard to the additional evidences submitted by the assessee and there is per se violation of Rule 46A of the Income-tax Rules, 1962. Considering these facts, we are of the view that the issue should go back to the Assessing Officer for fresh verification of the evidences submitted by the assessee. Accordingly we remit the issue for a fresh verific ..... X X X X Extracts X X X X X X X X Extracts X X X X
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