2022 (10) TMI 419 - AT - Income Tax

Validity of notice under section 143(2) - assessee has raised dispute that the said notice under section 143(2) was not served to assessee - HELD THAT:- We find that the notice under section 143(2) itself contains the Speed Post Registration No - No such objection was raised by assessee about the non-service of notice under section 143(2). Besides, service of notice, the objection of assessee is that the signature of AO is differ from the signature appeared on assessment order. The assessee is failed to show the basic difference in the signature on the notice viz a viz the assessment order. Moreover, the assessee has not disclosed as to what prejudice is caused to the assessee in mere difference in the signature. It is not the case of assessee that the assessment order or the notice under section 143(2) is not signed by competent officer. Further, the assessee or his AR nowhere took the plea that the signature either at the notice under section 143(2) or on the assessment is forged or the revenue is relying on some fabricated or forged signature. It is not the plea that this notice under section 143(2) was not at all issued by the assessing officer. The assessee want favourable order only from the bench without asserting such contention. In our view, the assessee has raised objection only for the sake of technical reasons, which we reject.

Estimation of income - bogus purchases - Disallowance restricted to the extent of 5% - As per AO entire purchase from alleged concerns were bogus and was only to suppress the profit of the beneficiaries which is substantiated by the statement on oath given by the entry provider - HELD THAT:- It is matter of common knowledge that PK Jain was well known bogus entry provider, who has provided entry of several thousand crores of rupees. During the search action on PK Jain no stock of any goods was found by search team. In the statement he admitted that he is mere entry provider. The assessee has not disputed that he has not transacted with the entity of PK Jain. CIT(A) restricted the addition to the extent of 5% of aggregate of purchases shown from the entity of PK Jain.

Disallowance to the extent of 5% is on lower side particularly when the assessee has shown negligible net profit. The assessee has shown net profit @.03 only, on the turnover of Rs. 70 Crore. The assessee has shown return income of Rs. 1,25,638/- only. Thus, in order to meet out the possibility of revenue leakage 6% of the addition of aggregate of disputed purchase will meet the end of justice. We may refer that this combination, where the assessee is beneficiary of similar disputed purchases, either from Rajender Jain, Bhanwar Lal Jain, Gautam Jain or PK Jain, we have consistently restricted or increased the similar addition to 6% of such purchases. Therefore, taking the consistent view, the disallowance restricted by ld. CIT(A) @ 5% are increased to 6% of the total aggregate of impugned/bogus purchase. In the result, the grounds of appeal raised by the revenue is partly allowed.