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2020 (8) TMI 115 - AT - Income TaxValidity of reopening u/s.148 - Addition of bogus purchases - HELD THAT:- On the basis of information received from the Investigation Wing which was based on information forwarded by Maharashtra VAT Department that the assessee has availed Hawala entry of bogus bill purchases in the financial year 2010-11.Based on this information, reopening has been done u/s.148. From the perusal of the record, it is seen that, nowhere AO has disputed that the source of purchase is outside the books of account. In fact the purchase of same amount and invoice has been recorded in the books of account and duly disclosed and the amount has been paid through banking channels. The corresponding sales have also not been disputed including the directed expenses and the gross profit. This could be a case where assessee has made purchases in cash and has taken an accommodation bill for same quantity for which cheque amount has been issued. In such a case also, the source of purchase are from the books, therefore, the entire purchases cannot be treated as income of the assessee especially when books of account have not been rejected and sales and GP stands accepted in the trading account. It could be at best, a case of suppression of GP on the purchase. Profit element of such amount should be added as income. Accordingly, Assessing Officer is directed to apply the GP declared by the assessee on purchase of ₹ 1,93,066/- and balance amount should be deleted. Validity of reopening u/s.148 - No merits in the contention of the ld. counsel for the reason that, firstly, there was a categorical information wherein the assessee’s name was appearing along with details of the parties from whom the assessee has made purchases which were found to be Hawala operator providing accommodation bogus bills. The Assessing Officer after receiving the information has independently applied his mind and recorded his reason to believe as to why such a purchase is not genuine. Thus, do not find any infirmity in the jurisdiction accorded u/s.147 and the same is dismissed. Appeal of the assessee is partly allowed.
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