TMI Blog2023 (7) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee is allowed for statistical purposes - ITA No. 101/RPR/2023 - - - Dated:- 4-7-2023 - Shri Ravish Sood, Judicial Member For the Assessee : Shri Prafulla Pendse, CA For the Revenue : Shri Choudhary N.C. Roy, Sr. DR ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 02.02.2023, which in turn arises from the order passed by the A.O. under Sec. 147 r.w.s. 144 r.w.s. 144B of the Income-tax Act, 1961 (in short the Act ) dated 28.03.2022 for the assessment year 2013-14. The assessee has assailed the impugned order on the following grounds of appeal: 1 T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee firm which is engaged in the business of custom milling of rice and paddy, had filed its return of income for A.Y.2013-14 on 31.10.2013 declaring an income of Rs. 3,53,710/-. Subsequently, the case of the assessee was selected for scrutiny assessment u/s. 143(2) of the Act. 3. On the basis of information that the assessee firm was one of the major beneficiaries of bogus purchase bills aggregating to Rs. 26.88 lacs that were procured from a bogus entity, viz. M/s. Shri Khand Agrotech, the A.O reopened its case u/s. 147 of the Act. As the assessee had failed to comply with the notice issued u/s. 148 of the Act dated 31.03.2021, therefore, the A.O. vide his order u/s. 147 r.w.s. 144 r.w.s. 144B dated 28.03.2022 made an addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had failed to substantiate the authenticity of its claim of having made genuine purchases from the aforementioned concern, therefore, I find no infirmity in the orders of the lower authorities who had rightly held the same as bogus purchases. 9. At the same time, I cannot remain oblivion of the fact that the A.O had neither rejected the books of account of the assessee firm nor dislodged the sales accounted for by the assessee firm in its regular books of account. Considering the totality of the facts involved in the present case, it can safely be concluded that the assessee firm had procured the goods in question not from the aforementioned party but had purchased the same at a discounted rate from the open/grey market and ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 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 assessee is correct in contending that such logic cannot be applied. The finding of the CIT(A) and the Tribunal would suggest that the department had not disputed the assessee's sales. There was no discrepancy between the purchases shown by the assessee and the sale declared. That being the position, the Tribunal was correct in coming to the conclusion that the purchases cannot be rejected without disturbing the sales in case of a trade. The Tribunal, therefore, correctly restricted the additions limited to the extent of bringing the G.P. rate o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee before them, who was a trader, was to be worked out by bringing the G.P. rate of such bogus purchases at the same rate as that of other genuine purchases. On the basis of the aforesaid observations of the Hon ble High Court, I am of the considered view that on the same lines the profit made by the assessee in the case before me i.e. by procuring the goods at a discounted value from the open/grey market can safely be determined by bringing the G.P rate of such bogus purchases at the same rate as that of the other genuine purchases. 11. I, thus, in terms of my aforesaid observations restore the matter to the file of the A.O, with a direction to him to restrict the addition in the hands of the assessee qua the impugned bogus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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