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2019 (5) TMI 1311 - AT - Income TaxRe-assessment proceeding u/s 147 - reopening within period of four years - no sanction u/s 151(2) - Bogus purchases - HELD THAT:- We concur with the stand taken by Ld. first appellate authority. The proceedings were triggered within 4 years from the end of relevant AY and therefore, sanction u/s 151(2) was not required and also, the first proviso to Section 147 was not applicable since the original return was processed u/s 143(1). AO was clinched with tangible information in the shape of information from Sales Tax Authorities which prima-facie suggested possible escapement of income in the hands of the assessee. Hence, no infirmity could be found in triggering reassessment proceedings against the assessee - Decided against assessee Violation of principle of natural justice would stand dismissed since nothing on record suggest that the assessee was not provided with sufficient opportunity of being heard and defend his case. Rejection of books of accounts - HELD THAT:- AO has only disturbed the purchases and partial relief has already been provided by first appellate authority. Therefore, there could be no occasion to be aggrieved by rejection of books since the issue is limited to estimation on account of alleged bogus purchases only. This ground stand dismissed. Bogus purchases - Quantum additions - there could be no sale without actual purchase of material keeping in view the assessee’s nature of business. The sales turnover was not disputed by AO and the assessee was in possession of primary purchase documents viz. copies of invoices and the payments were through banking channels. At the same time, notices issued u/s 133(6) elicited no satisfactory response. The assessee failed to produce any of the suppliers to confirm the transactions. In fact, the assessee, in statement u/s 131, could not even identify the suppliers. Therefore, Ld. CIT(A), in our opinion, clinched the issue in right perspective. Keeping in view the fact that the applicable VAT rate on iron & steel was on lower side and the assessee was trading in low-margin item, we reduce the estimation to 5% of alleged bogus purchases of ₹ 2,78,12,020/- which comes to ₹ 13,90,601/-. The balance addition stand deleted. Ground partly allowed.
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