BHARGAB ENGINEERING WORKS,HOWRAH vs. A.C.I.T.,CIRCLE-46, KOLKATA

It transpires at the outset that the instant lis arising out of the Assessing Officer’s reassessment framed on 12.11.2018 thereby disallowing assessee’s purchases amount of Rs.45,08,664/- as bogus. The CIT(A) has upheld the impugned disallowance. It is in this backdrop that the assessee has not only challenged validity of the reopening for not recording of its failure in disclosing “fully” and “truly” all particulars of income in view of section 147 1st proviso but also its case on merits is that all of its purchases had been rightly treated as genuine in the first round of scrutiny assessment. Case file suggests that both these grounds have been rendered infructuous since the tribunal’s coordinate bench’s order in Assessment Year: 2011-12 Bhargab Engineering Works dated 02.06.2017 relating to the former round of scrutiny assessment has ordered estimation of assessee’s net profit (before partners remuneration) at 8% of the total turnover of Rs.1058.91 lacs. That being the case, we hold that the impugned purchases ought not to be disallowed as bogus in the instant second round as a necessary corollary. We therefore accept the assessee’s latter substantive grievance on merits and delete the impugned bogus purchase disallowance of Rs.45,08,664/-.

Learned counsel is fair enough in not pressing the assessee’s grievance challenging validity of the reopening in issue.

This assessee’s appeal is partly allowed in above terms.