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2019 (11) TMI 870 - AT - Income TaxReopening of assessment u/s 147 - AO received information from the Sales Tax Department, Govt. of Maharashtra that the assessee had obtained accommodation entries by availing bogus purchase bills to inflate purchases - HELD THAT:- As mentioned earlier, the AO has reopened the assessment which was processed u/s. 143(1) of the Act. The Hon’ble Supreme Court in the case of ACIT v. Rajesh Jhaveri Stock Brokers P. Ltd. 2007 (5) TMI 197 - SUPREME COURT analyzed the distinction between the acceptance of a return u/s 143(1) and an assessment which is framed u/s 143(3) of the Act. In the former case, the AO would have much wider latitude to reopen the assessment. Thus in the instant case, the AO has rightly issued notice u/s 148 for reopening the return of income processed u/s 143(1) of the Act. No irregularity has been committed by the AO in recording the reasons and then issuing the notice u/s.148. As mention earlier, the AO had issued notice u/s. 142(1) calling for details to be filed by the assessee and also the books of accounts to be reproduced. In response to it, the assessee failed to file the complete details. Also the assessee failed to produce before the AO the books of accounts for verification - As relying on N.K. Industries Ltd. [2016 (6) TMI 1139 - GUJARAT HIGH COURT] we set aside the order of the Ld. CIT(A) and direct the AO to restrict the additions limited to the extent of bringing the G.P. rate on disputed purchases at the same rate of other genuine purchases. We direct the assessee to file the relevant documents/evidence before the AO. Needless to say, the AO would give reasonable opportunity of being heard to the assessee before finalizing the order. Assessee's appeal is partly allowed.
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