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2024 (3) TMI 148 - ITAT DELHIReopening of assessment - reason to believe - bogus purchases - information made available to him by the Investigation Wing from third person - HELD THAT:- We observe that based on information gathered in the course of search in the case of Jain and Choudary Group, a detailed and comprehensive information was supplied to the Assessing Officer herein. The Investigation Wing had relied upon the statement of various persons in the group search cases wherein it was categorically asserted that the supplier M/s. Kriya is not engaged in any real business and no physical goods were supplied by such entity to any party named in their books. The name of the assessee company figured in books of accounts and the assessee has shown to have obtained supply from such entity. These incriminating facts have emerged in the reasons recorded. Therefore, the reasons recorded are specific in nature and reliable in character. AO has applied his mind properly and has given his independent finding which fact is manifest from the bare reading of the reasons recorded. We thus see no substance in the arguments propped up on behalf of the assessee to assail the validity of assumption of jurisdiction. The challenge to assumption of jurisdiction thus fails. Estimation of income - bogus purchases - CIT(A) has erred in restricting the addition to the extent additional gross profit at 5% of addition made u/s 69C - Where the parties to whom the purchase of diamonds in question have been sold, is not known, one cannot say that the onus which lay upon the assessee has been fully discharged. The bona fides of the supplier Kriya Impex Pvt. Ltd. has been put under serious question by the Investigation Wing. The corresponding purchases of the so called supply made by Kriya Impex Pvt. Ltd. is also not known. Therefore, the action of the CIT(A) in resorting to some reasonable estimation based on the value of diamond stated to have been purchased from Kriya Impex Pvt. Ltd. is quite justified. Without reiteration of reasonings of CIT(A), we see no error in the action of the CIT(A). Hence, the appeal of the Revenue as well as Cross Objection of the assessee challenging the action of the CIT(A) towards estimated additions deserves to be dismissed.
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