2023 (1) TMI 11 - AT - Income Tax

Reopening of assessment u/s 147 - reasons were recorded by the AO, based on the information received from the investigation wing - HELD THAT:- As considering the aforesaid facts and circumstances of the case, we are of the considered view that it cannot be said that there is no reason to believe that the income chargeable to tax has escaped assessment because such exercise of reopening has been made only after due inquiries.

From the above judgment of the Hon`ble Gujarat High Court in the case of Peass Industrial Engineers (P.) Ltd [2016 (8) TMI 280 - GUJARAT HIGH COURT] it is vivid that function of the assessing authority at the stage of recording reasons is to administer the statute and what is required is a reason to believe and not to establish fact of escapement of income and therefore, looking to the scope of section 147 as also sections 148 to 152 of the Act, even if scrutiny assessment has been undertaken, if substantial new material is found in the form of information on the basis of which the assessing authority can form a belief that the income of the assessee has escaped assessment, it is always open for the assessing authority to reopen the assessment. Therefore, based on these facts and circumstances, we do not find any infirmity in the reasons recorded by Assessing Officer, hence the Cross Objection No.1 raised by the assessee is dismissed.

Estimation of income - Bogus purchases - HELD THAT:- As the issue is squarely covered by the judgment of Co-ordinate Bench in the case of Pankaj K. Chaudhary (2021 (10) TMI 653 - ITAT SURAT] and there is no change in facts and law and the Ld. DR for the Revenue has failed to controvert the findings of the Co-ordinate Bench. We note that Co-ordinate Bench has sustained the addition @ 6% of bogus purchases, therefore, respectfully following the binding precedent, we partly allow the appeal of the Revenue.