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TMI Blog2014 (2) TMI 1446X X X X Extracts X X X X X X X X Extracts X X X X ..... he total loss of Rs 12,230/-. While finalizing the assessment AO rejected the books of accounts u/s. 145 of the Act by considering the purchase of rough diamonds amounting to Rs 1,68,48,663/- made by the Assessee as bogus purchases and thereafter made addition of the total amount of bogus purchases. In first appeal, CIT (A) upheld the order of AO but in 2nd appeal Tribunal upheld the order of A.O. in rejecting the books of accounts u/s. 145 but thereafter applying the gross profit rate of 12.5% on the total turnover restricted the addition to Rs 21,36,451/-. Against the order of Tribunal in quantum proceedings Assessee moved Hon'ble High Court. Hon'ble High Court vide order dated 23.07.2003 in Tax Appeal No 200 of 2003 admitted the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subordinate authority merges with the order of the Superior authority (in the present case the order of CIT (A) merges with the order of Tribunal). He further submitted that against the order of Tribunal, Hon'ble High Court has admitted the appeal of Assessee which is yet to be disposed off. He further submitted that the Tribunal having confirmed the addition sustained by CIT (A) on account of bogus purchases on a different ground namely fall in GP rate, it cannot be said that Assessee has concealed the particulars of income or furnished inaccurate particulars of income so as to levy penalty u/s 271(1)(c). He also placed reliance on the decision in the case of Sudesh Khanna vs ACIT (2005) 98 TTJ (Ahd) 106. Ld D.R. on the other hand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irmed the addition sustained by CIT (A) on account of unaccounted sales on a different ground viz fall in GP rate, it cannot be said that the assessee had concealed the particulars of income or furnished inaccurate particulars and therefore penalty u/s 271(1)(c) was not leviable." Apart from the foregoing, it is also a fact that against the order of Tribunal sustaining quantum addition, Assessee has preferred appeal before Hon'ble High Court and the High Court has admitted the appeal holding the question raised to be a substantial question of law. Before us, Ld D.R. has placed reliance on various decisions but we find that the decisions relied by him are distinguishable on facts and therefore have no application to the present facts. We t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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