TMI Blog2023 (12) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeals)/(NFAC), Delhi dated 23.06.2023 for the assessment year 2009-10. 2. The main grievance of the assessee is against the action of the Ld. CIT(A) sustaining the disallowance of Rs. 20,84,190/- u/s 69C of the Income Tax Act, 1961 (hereinafter the Act ) being 100% of the total purchases made from two (2) parties. 3. At the outset, we note that even though the assessee in his grounds of appeal has raised legal issue against the reopening of the assessment u/s 147 of the Act, but before us the same has not been argued. Therefore, the legal issue is not adjudicated. 4. Ground no. 3 regarding penalty is pre-mature and Interest charged u/s 234A, 234B and 234C are consequential. So dismissed. 5. Before us, only ground no. 2 was argued, which is against the action of the Ld. CIT(A) sustaining disallowance of Rs. 20,84,190/- u/s 69C of the Act being 100% disallowance of total purchases from two (2) parties namely (i) M/s. Kriya Impex Pvt. Ltd. and (ii) M/s. Sun Diam. 6. Brief facts are that the assessee had filed his return of income for AY. 2009-10 declaring total income of Rs. 9,01,650/- which was processed u/s 143(1) of the Act. Thereafter, the AO issued notice u/s 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he action of the AO. Aggrieved, the assessee is before us. 7. We have heard both the parties and perused the records. The sheet anchor of the assessee s contention is that undisputedly, the AO/Ld. CIT(A) has not disturbed the sales which has been shown by the assessee which includes the sale of diamonds purchased from both M/s. Kriya Impex Pvt. Ltd. and M/s. Sun Diam. According to the Ld. AR, the purchases were made on 08.11.2008 from both concerns and sold on 11.11.2008 and 15.01.2009 to M/s. Bothra Gems Jewels and the assessee has shown gross profit (GP) of 9.3% from such transactions which details given at page no. 34 of PB as under: - Stock Details F.Y. 2008-09 AY. 2009-10 S. No Item Date Inward Party Name Qty Amount Date Outward Party Name Qty Amount 1 Cut Polished diamonds 08.11.2008 Kriya Impex Pvt. Ltd. 550.00 897,050.00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-tax Act, 1961 ( the Act ) challenge the order dated 05th July, 2017, passed by the Income-tax Appellate Tribunal, Bench B , Pune ( ITAT ) in Income-tax Appeal No. 1408/PUN/2015 relevant to the assessment year 2010-11 and Income-tax Appeal No. 1409/PUN/2015 relevant to the assessment year 2011-12, respectively, whereby the appeals filed by the Revenue have been dismissed. 2. The facts and issues arising in both these appeals are identical, however, for the sake of deciding the issue, reference is being made to the facts in ITA No. 673 of 2018. 3. The following questions of law have been proposed for our consideration: a. Whether in the facts and circumstances of the case and in law, the ITAT was justified in directing the A.O. to delete the addition made on account of bogus purchase ignoring the fact that the addition was made by the A.O. on the basis of credible information from the Sales Tax Department and on the fact that the assessee did not substantiate/confirm the veracity of the impugned purchases in the assessment proceedings? b. Whether in the facts and circumstances of the case, the ITAT was justified in directing the A.O. to delete the addition made on acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals), however, was of the opinion that the gross profit shown by the assessee at 0.69% was very low in that particular kind of trade and, therefore, estimated the gross profit at 5% and further directed the A.O. to make an addition in the gross profit ratio and delete the balance addition made. 6. Both the Revenue as also the assessee preferred appeals against the order passed by the CIT (Appeals), whereas the Revenue in its appeal challenged the deletion of Rs. 2.45 crores on account of alleged bogus purchases, the assessee questioned the order to the extent the gross profit rate was calculated at 5% as against 0.69% declared by the assessee, which had resulted in an addition of Rs. 10,59,974/-. The Tribunal dismissed the appeal filed by the Revenue and allowed the appeal preferred by the assessee. It was held that the case of the Revenue was based on the investigation carried out by the Sales Tax Department only and that no cross-examination of the persons, whose names had figured in the list so prepared by the Sales Tax Department, was allowed. It was held that the A.O. had failed to complete the investigation in the case and that the affidavits and the confirmation letter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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