2022 (12) TMI 1208 - AT - Income Tax

Re-opening assessment u/s 147 by issuing notice u/s 148 - disallowance on account of bogus purchase - HELD THAT:- A three Judges bench of Hon'ble Gujarat High Court in the case of A.L.A. Firm [1991 (2) TMI 1 - SUPREME COURT] after an elaborate discussion of the subject opined that the jurisdiction of the Income Tax Officer to re-assess income arises if he has in consequence of specific and relevant information coming into his possession subsequent to the previous concluded assessment, reason to believe, that income chargeable to tax and had escaped assessment. It was held that even if the information be such that it could have been obtained by the I.T.O. during the previous assessment proceedings by conducting an investigation or an enquiry but was not in fact so obtained, it would not affect the jurisdiction of the Income Tax Officer to initiate reassessment proceedings, if the twin conditions prescribed under Section 147 of the Act are satisfied.

As observed earlier not only there existed new information with the AO from the credible sources, but also he had applied his mind and recorded the conclusion that the purchases claimed were non-genuine and therefore bogus, (clearly meaning that what was disclosed was false and untruthful). The requirements of section 147 r.w.s. 148 have clearly been met; and the reopening is held justified and legal. Therefore, we dismiss ground no.1 and 3 raised by the assessee.

Estimation of income on bogus purchases - We notice that the issue is squarely covered by the decision of the Coordinate Bench of Surat in the case of Pankaj K. Choudhary [2021 (10) TMI 653 - ITAT SURAT] and there is no change in facts and law, therefore respectfully following the binding precedent, we direct the Assessing Officer to sustain the addition at the rate of 6% of bogus purchases.