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2020 (5) TMI 181 - AT - Income TaxReopening of assessment u/s 147 - whether issuance of notice u/s 148 merely on the basis of doubt and suspicion and without having reason to believe? - HELD THAT:- There was no original assessment u/s 143(3) of the Act but the return filed by the assessee was processed u/s 143(1) of the Act. Subsequently, the AO received information as well as statement recorded by the Investigation Wing, Mumbai during search and seizure operation in case of Shri Rajendra Jain, Shri Sanjay Choudhary group and Shri Dharmichand Jain group of Mumbai on 03-10-2013. The assessee claimed to have purchased Diamond from the concerns of Shri Rajendra Jain, Group, therefore, based on the information received from Investigation Wing, Mumbai, there was a prima facie material to form the belief that income assessable to tax has escaped assessment. No error or illegality in the impugned order of the ld. CIT(A) qua this issue. Thus Ground No. 1 of the assessee is dismissed. Rejection of books of account u/s 145(3) - GP estimation - addition of 25% of alleged bogus purchases - CIT(A) has given the details of the average g.p. and arrived to the conclusion that if the income is estimated based on the average g.p. on the turnover of the assessee then it would be more than the addition made by the AO - HELD THAT:- If the income of the assessee is estimated as per well settled proposition of law being the past history of the g.p. declared by the assessee and average of past history as the basis of the estimation then the addition on account of low g.p. for the year under consideration would have been more than the addition made by the AO. Accordingly, we do not find any error or illegality in the impugned order of the ld. CIT(A). - Decided against assessee.
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