2015 (3) TMI 648

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..... l was right in law in directing the Assessing Officer to reopen the assessment invoking Explanation 2 to Section 153 of the Act? (ii)Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in directing the Assessing Officer to reopen the assessment of an earlier year which would amount to enhancement of income? 2. This is an appeal by an over enthusiastic assessee, who, having fairly conceded before the Tribunal that the assessments of earlier years in which purchases were made can be reopened and he would have no objection to such action, is now challenging the direction given by the Tribunal to the Assessing Officer to reopen the assessment invoking Explanation 2 to Section 153 of the Act. 3.1. The bri .....

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..... epresentative of the department pleaded that even if such amounts are excluded in the assessment year, direction may be given to the Assessing Officer to examine whether the purchases were bogus or not under Explanation 2 to Section 153 of the Act. In the rejoinder filed by the assessee before the Tribunal, while stating that addition has to be deleted in the relevant assessment year, it was fairly conceded that if the assessments of earlier years in which such purchases were made is reopened, he would have no objection to such action. 3.5. On this premise, the Tribunal came to hold that there was no evidence before the revenue that there was a remission or cessation of such liability during the relevant assessment year. It was also found .....

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..... bjection to the same. The purpose of such concession is to determine the correct tax liability. It was under such circumstances, the Assessing Officer was directed to reopen the assessment of the year in which such purchases were made from third parties to examine whether such purchases were bogus or not. The net result of such a direction may also go in favour of the assessee, if he is able to prove the bona fides. The effect would be that the correct tax liability will thereafter be determined. We find that such a direction is in consonance with the provisions of Explanation 2 to Section 153 of the Act. Such a direction passed by the Tribunal in the present factual scenario, in our considered opinion, cannot be said to be erroneous. For .....

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