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2019 (9) TMI 184 - AT - Income TaxReopening of assessment u/s 147 - information received from the Sales Tax Authorities in connection with bogus seller/hawala dealer - HELD THAT:- Assessee submitted his explanation by virtue of letter dated 04.03.2015 but the same was not found justifiable by the AO. AO invoked the power u/s 147/148 of the Act on the basis of information received from the Sales Tax Authorities in connection with bogus seller/hawala dealer. As decided the matter of controversy in the case of Shoreline Hotel P. Ltd. Vs. CIT [2018 (9) TMI 1248 - BOMBAY HIGH COURT] in which it is specifically held that the AO has justifiably invoked the power on the basis of information received from the Sales Tax Department. Case CIT invoked the power u/s 263 of the Act but the principle is the same and accordingly, we are of the view that the law settled in the case of Shoreline Hotel P. Ltd. Vs. CIT is quite applicable to the fact of the present case, therefore, we upheld the finding of the CIT(A) on these issues. Accordingly, we are of the view that the AO has rightly invoked the power u/s 147/148 of the Act on the basis of the information received from the Sales Tax Department. Accordingly, we decide these issues in favour of the revenue against the assessee. Addition i.e. 12.5% of the bogus purchase - HELD THAT:- In the settled law in SIMIT P SHETH [2013 (10) TMI 1028 - GUJARAT HIGH COURT] the profit embedded to the transaction was taken into consideration and in these cases, the profit embedded to the transaction was to the extent of 12.5%. In the instant case, the profit is very low. Taking into account, all the facts and circumstances, we are of the view that the end of justice would met if the addition be restricted to the extent of 6% of the bogus purchase. Accordingly, we set aside the finding of the CIT(A) on this issue and restrict the addition to the extent of 6% of the bogus purchase.
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