Assessment Year 2012 13 to 2017 18 Page 21 2 The deviation report itself

Assessment year 2012 13 to 2017 18 page 21 2 the

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(Assessment Year: 2012-13 to 2017-18) Page | 21 (2) The deviation report itself suggests that if the addition is made of bogus purchases and sales in the hands of the assessee, it will result into the reduction from the returned income. He submitted that the reasons for the same is that assessee has booked sales from these parties from assessment year 2012 – 13 to 2017 – 18 of INR 36,20,60,89,783/– whereas the purchases from these parties is amounting to INR 36,02,14,17,848/– thus ultimately for all these years it will result into reduction of the returned income by INR 18,46,71,935/–. Thus, despite the above observation of the learned assessing officer in his deviation report itself, The Deputy Director Of Income Tax (Investigation) as per letter dated 24/12/2018 advised the assessing officer to make an addition on account of alleged bogus purchases at the rate of 25% of purchases from the impugned parties as recommended in the appraisal report. Thus, the learned authorised representative submitted that if the purchases and sales from these parties, which are alleged to be bogus purchases and sales recorded by the assessee are removed, there would be a net reduction in the returned income of the assessee of INR 1 84671935/- in the hands of the assessee. He further stated that there is absence of any incriminating material with the assessing officer on this issue. He submitted that the deviation report shown by the AO clearly states that there cannot be any additions in the hands of the assessee and addition is merely based on the appraisal report. He otherwise stated that the purchases made from these parties have been sold to other parties and the sales made to these parties the goods have been purchased from other parties. Thus, he submitted that one leg of the transaction is accepted as correct by the assessing officer and the other leg of the transaction is held to be bogus. He thus submitted that such addition could not be made. He further submitted that when i. the assessee maintains the detailed stock register showing quantity wise detail of each item, ii. purchases are vouched,
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Agson Global Pvt. Ltd Vs. ACIT, ITA No. 3741to 3746/Del/2019 (assessee) ITA No. 5264 to 5269/Del/2019 (Revenue) (Assessment Year: 2012-13 to 2017-18) Page | 22 iii. sales are vouched, There is no reason that this addition can be made in the concluded assessment or even in the open assessment. Coming to the order of the learned CIT – A, he submitted that, the learned CIT – A has found an innovative way, not provided in the income tax act, by invoking the provisions of section 145 (3), without verification of the books of accounts, rejects part of the books of accounts, applies the gross profit rate of the other transactions other than with these parties to the alleged transactions from the tainted parties and makes the addition on account of gross profit.
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