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2022 (5) TMI 947 - AT - Income TaxReopening of assessment u/s 147 - eligibility of reason to believe - addition of bogus purchases - HELD THAT:- CIT(A) had confirmed the action with regard to initiation of proceedings under Section 147 of the Act by holding that the Assessing officer had received report of the Investigation Wing, Mumbai that the assessee was beneficiary of accommodation entry operators. Before us the ld AR for the assessee has not made specific submissions in challenging the reopening except making general submissions that no notice of reopening was received. We find that otherwise the issue of reopening is against the assessee by the decision of Jurisdictional High Court in Priya Blue Industries (P) Ltd [2021 (8) TMI 486 - GUJARAT HIGH COURT] wherein held that where the assessing officer has reason to believe that income chargeable to tax had escaped assessment as the assessee was beneficiary of accommodation entries and basis of belief were several inquiries and investigation by investigation wing that there had been escapement of income of assessee from assessment because of his failure to disclose fully and truly all the material facts, reopening is justified. Thus, considering the above law, coupled with facts of this case, we affirm the action initiated under Section 147 of the Act. In the result, ground No. 1 &2 of the appeal is dismissed. Bogus purchases - The assessee has shown gross profit at 3.42% and net profit at 1.98%, thus the assessee was shown an extremely low profit. The combination of this bench in other similar cases wherein the purchases are shown from Bhanwarlal Jain or Rajendra Jain or Gautam Jain group have restricted or enhanced the addition to the extent of 6% of such amount or disputed purchases. Therefore, taking a consistent view, the disallowance which was confirmed to the extent of 100% by learned CIT(A) are restricted to 6% of the impugned purchases - grounds of appeal raised by the assessee are partly allowed.
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