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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI
Before: Dr. B. R. R. Kumar
ORDER The present appeal has been filed by assessee against the order of National Faceless Appeal Centre (NFAC), Delhi dated 14.10.2022.
Following grounds have been raised by the assessee:
“1. On the facts and in the circumstances of the case and in la, the Ld. assessing officer has erred both in law and in facts of the case in holding reassessment proceedings and passing assessment order u/s 144/147 on the ground that he has failed to issue valid notices to the appellant for holding assessment proceedings. Where an appeal is filed before the Commissioner of Income Tax (Appeals)) erred in order u/s 250 of the income tax act-1961.
2. On the facts and circumstances of the case, The Ld. assessing officer has erred both on facts and in law in making the addition of total amount Rs. 16,50,000/-of alleged bogus purchases from proprietors firm Namely Jai Shiv Enterprises in spite of M/s Kashyap Trading Co., M/s PS Enterprises & M/s Arvind Kumar Gupta Nisha Traders. Of Sh. Dalip Kumar during the financial year 2011-12 Rs. 16,50,000/- without appreciating the facts available on record and totally ^ignoring the present legal position.
On the facts and circumstances of the case the Ld Assessing Officer, himself had / made the assessment for the immediately preceding year i.e. AY 2011-12 and was completely satisfied with the accounts, documents, details furnished and explanations made during the assessment proceedings which is abundantly evident from the assessment order framed by him wherein he restricted the addition on account of alleged bogus purchases of Rs. 25,70,000/- to Net Profit rate of 8%.
4. Referring the Ld. AO that assessee has not submitted any proof as the AO has not been given the opportunity for the same, now we are producing here the copy of invoice of M/s Jai Shiv Enterprises, Party’s statement and the bank statement showing the all transaction is being verified by the bank. PRINCIPLES OF NATURAL JUSTICE 5. That having regard to the facts and circumstances of the case, the Ld. Assessing Officer has erred both on facts and in law in deciding the appeal ex parte in violation of the principles of natural justice and without granting to the assessee a fair, proper and meaningful opportunity and the findings of the Ld. Assessing Officer that the assessee is not serious and sincere to pursue the case is wholly incorrect and in disregard of the fact that there was reasonable cause for alleged non- compliance on the dates fixed for hearing.
That having regard to the facts and circumstances of the case, Ld. Assessing Officer has erred in law and on facts in making above the additions and disallowance of 100% of alleged Purchase Rs. 16,50,000/- without giving an adequate opportunity of being heard and by not observing the principles of natural justice.”
Arvind Kumar Gupta 3. The assessee has allegedly received bogus purchase bills from M/s Kashyap Trading Company, M/s Jaishiv Enterprises, M/s P.S. Enterprises and M/s Nisha Traders of Rs.10,03,000/- (wrongly taken by the AO Rs.16,50,000/-). The Assessment Order has been passed u/s 144 of the Income Tax Act, 1961. The ld. CIT(A) affirmed the order of the AO on the grounds that the assessee has only relied on the technical issues but has not supported his case. It was submitted that the transactions from the same parties in the earlier year has been considered by the revenue and the revenue has accepted 8% of net profit out of the said purchases. It was pleaded that the profit of 8% be considered in the current year also.
Having gone through the bills, payments, bank statements and keeping in view the stand of revenue for the other years, it is hereby held that interest of justice would be well served if the 8% of Rs.10,03,000/- is treated as the net profit of the assessee for this year.
In the result, the appeal of the assessee is allowed for statistical purpose. Order Pronounced in the Open Court on 20/06/2023.