TMI Blog2019 (12) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Circle-10, New Delhi which stated that the parties under consideration from whom the assessee has shown transactions were only accommodation entry provider, which was admitted in their statement recorded u/s.131 of the Act. We, further note from the reasons recorded at para 2, page 36 that the AO has categorically mentioned that he has scrutinized the audited accounts for the assessment year ending March 2006 which shows that the assessee has disclosed these transactions but the fact that the assessee company has obtained accommodation entries from the above mentioned three entities controlled by Shri Rakesh Gupta, Shri Vishesh Gupta, Shri Navneet Jain and Shri Vaibhav Jain was not disclosed. The entry provider entries did not have any genuine business activity as admitted before ACIT, Central Circle-10, New Delhi, therefore, the AO had reason to believe that by the taxable income represented the transactions with the above cited entities escaped assessment due to failure on the part of the assessee company to disclose material facts truly and fully necessary to make assessment for A.Y. 2006-07. Thus, we find that the AO has duly applied his mind and verified the informa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filed on 15.11.2007 may be treated as filed in response to notice u/s.148 of the Act. Thereafter, a copy of reasons recorded for re-opening of the case was provided to the assessee. The assessee filed its objections against reopening of case which were stated to be disposed off by the AO vide order dated 19.03.2014. Since the assessee did not file necessary material in form rebuttal of facts brought on record by the AO, the AO has made addition of ₹ 53,58,9548/- and in respect of aforesaid three parties and also in respect of M/s.Om Agencies. 4. Being aggrieved, the assessee carried the matter before the learned CIT(A) challenging the reassessment proceedings on the ground of non-application of mind by AO as he acted on the information provided by the Asstt. Commissioner of Income Tax, Central Circle-10, New Delhi. However, the learned CIT(A) observed that the AO has given complete details of purchase on transaction in reasons recorded and therefore, it was held that the AO has independently applied his mind on the information provided by the other authority. Further, at the stage of recording reasons, no final findings is required to be given and only prima-facie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Unique Metal Industries Vs. Income Tax Officer in ITA No. 1372/Del/2015 dated 28.10.2015 of ITAT Delhi and submitted that the documents obtained by the AO during the assessment proceedings demonstrate that there was no information with the AO except letter issued from the ACIT, Central Circle-10, New Delhi. Therefore, the reassessment may be quashed in the light of decision of Unique Metal Industries (supra). The learned Counsel further placed reliance from the decision in the case of Tarun Metal Co., Vs. ITO, Ward-39(3), New Delhi, ITA No.407/Del/2016 dated 30.11.2016 in which same very parties were involved of which reassessment proceedings u/s.148 were quashed following the decision in the case of Unique Metal Industries(supra). 6. Per contra, the ld.Departmental Representative(DR) submitted that as per provisions of section 292B the typographical error in the notice u/s.148 is not material ground for quashing the proceedings initiated in reopening of assessment. The ld.DR further submitted that as per provisions of section 292BB where the assessee has participated in the assessment proceedings which goes to prove that the assessee had effective knowledge of initiation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout application of mind, we find that the AO was in possession of the information from the ACIT, Central Circle-10, New Delhi which stated that the parties under consideration from whom the assessee has shown transactions were only accommodation entry provider, which was admitted in their statement recorded u/s.131 of the Act. We, further note from the reasons recorded at para 2, page 36 that the AO has categorically mentioned that he has scrutinized the audited accounts for the assessment year ending March 2006 which shows that the assessee has disclosed these transactions but the fact that the assessee company has obtained accommodation entries from the above mentioned three entities controlled by Shri Rakesh Gupta, Shri Vishesh Gupta, Shri Navneet Jain and Shri Vaibhav Jain was not disclosed. The entry provider entries did not have any genuine business activity as admitted before ACIT, Central Circle-10, New Delhi, therefore, the AO had reason to believe that by the taxable income of ₹ 50,67,260/- represented the transactions with the above cited entities escaped assessment due to failure on the part of the assessee company to disclose material facts truly and fully nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle-10, New Delhi that they have provided bogus purchase accommodation entries from their aforesaid concerns. Therefore, the AO concluded that the purchase shown by the assessee company from the aforesaid concerns were bogus. Accordingly, the AO made the addition of ₹ 53,58,954/- on above accounts. 10. Being aggrieved, the assessee carried the matter before ld.CIT(A) wherein it was contended that the aforesaid purchases were duly accounted in the books of accounts and shown in the stock of register. The assessee has declared turnover of ₹ 81.90 lakhs and filed copy of trading and profit and loss account and balance sheet were filed, it was reflected on the Return of Income. The assessee has also produced books of accounts, the audited accounts. The assessee purchased raw material of 99075 kg of Alluminium Scrap during the year. The assessee has was having opening stock of 13,284 kg which was used for manufacturing of Alluminium Ingots. During the year 10,5447 kg scrap was consumed to produce Alluminium silly of 93216 kg and by product (Iron and Dross) of 14,085 kg. Therefore, the ld.CIT(A) was of the view that appellant had made the purchases of Alluminium s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said case a search was conducted leading to seizing recovery of cheques, vouchers of number of concerns along with books, blank purchase bills, books, letter heads from search, thus, there was suppression of profit which is not in the case of assessee where the assessee has shown at higher Gross Profit of 4.82% as compared to last year Gross Profit of 1.92%. 14. We have heard the rival submissions and perused the material available on record. We find that the assessee has made purchases of scrap of 53.58 lakhs from the aforesaid four parties, however, the parties have admitted in their statements that they have issued bogus purchase bills. Therefore, genuineness of the purchases were not proved. We, further find that the assessee has submitted copies of purchase bills issued by the aforesaid parties and payment is made by the account payee cheques. This shows that the purchases have been made, may not be from the party from whom purchase bills have been obtained. The only possibility is therefore, is that the assessee might have inflated the purchases as sales has not been doubted by the AO. We, further find that the books of accounts of the assessee are audited and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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