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2018 (12) TMI 695 - HC - Income TaxReopening of assessment u/s 147 - assumption of jurisdiction for reassessment under Section 147 - Held that:- Non-consideration of the question of jurisdiction is erroneous. In these circumstances, the first question is answered in favour of the assessee by holding that the Tribunal was not justified in ignoring the grounds urged by the appellant with regard to jurisdiction for re-assessment under Section 147 of the Income Tax Act. Addition of bogus creditors - As a consequence to the additions, gross profit ratio would amount to 58.29% - Held that:- The contentions of the assessee required to be accepted. If the amounts are added on then the gross profit ratio would amount to almost 58.29% which is erroneous. It does not arise in the said type of business of the assessee; that there cannot be such a huge profit ratio of 58.29%. Moreover certain material placed by the assessee have not been considered. Therefore, we are of the view that the matter requires to be reconsidered by the Tribunal. Under these circumstances, the second substantial question is answered in favour of the assessee by holding that the authorities committed an error in adding a sum as bogus creditors with respect to credit purchase made by the assessee. As a consequence to answering both the substantial questions of law, the appeal is allowed.
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