TMI Blog2018 (10) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase transactions to factorize for profit earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against such bogus purchases, which first appellate authority has rightly done. As assessee was dealing in price sensitive item like Steel, we find the estimation of 12.5% to be on the higher side. We restrict the same to 8% of alleged bogus purchases of ₹ 25,61,087/- which comes to ₹ 2,04,887/-. Ground number-1 stand partly allowed. Addition of peak credit u/s 69C on the premise that material was purchased in cash from the open market whereas the accommodation purchase bills were procured from the alleged hawala dealers - Held that:- CIT(A) while confirming the stand of AO, estima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the CIT(A) erred in confirming the addition at 12.5% of the alleged bogus purchases. 2. The CIT(A) erred in not appreciating that the information received from Director General of Income-tax, Mumbai was made the basis for reopening the assessment without there being any independent application of mind by the A.O. 3. The CIT(A) erred in not appreciating that except for assertion that there were bogus purchases, the A.O. has not referred to any material on the basis of which he proceeded to invoke the provisions of Section 147 of the Income-tax Act. The assertion made by the A.O. is a bare one, without any reference to the material on the basis of which he made such assertion. 4. On the facts and in the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issuance of notice u/s 148 dated 14/03/2014 pursuant to receipt of certain information from the Sales Tax Department, Maharashtra wherein it was found that the assessee stood benefitted of alleged bogus purchases aggregating to ₹ 28.61 Lacs from four parties, the details of which have already been extracted at para-2 of the quantum assessment order. The assessee offered the original return of income in response to notice u/s 148. The Ld. AR, before us, duly admitted that the copy of the reasons recorded to initiate reassessment proceedings were duly supplied to the assessee during re-assessment proceedings. 2.3 Accordingly, the assessee was asked to substantiate the purchase transactions as well as to produce the suppliers to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relying upon several judicial pronouncements, instead of peak credit, restricted the impugned additions to 12.5% of the alleged bogus purchases. Aggrieved, the assessee is in further appeal before us. 4. The Ld. Authorized Representative for Assessee [AR], Shri N.M.Porwal, drawing our attention to the documents placed in the paper book contested the addition which has been controverted by Ld. Departmental Representative [DR], Shri Asghar Zain VP. 5. We have carefully heard the rival contentions and perused the relevant material on record including documents placed in the paper book and judicial pronouncements as cited before us. We are of the considered opinion that there could be no sale without actual purchase of material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 143(1) and the reopening has been done within a period of four years. Therefore, the only requirement, in such a case, to acquire the valid jurisdiction was that the Assessing Officer had reasons to believe that certain income escaped assessment. The tangible material in the shape of information from Sales Tax Department came to the possession of Ld. AO which led the Ld. AO to form the requisite belief. The copies of reasons were duly supplied to the assessee during proceedings. By utilizing the tangible material, Ld. AO formed the belief that certain income escaped assessment and therefore, he proceeded to reassess the income on the basis of this tangible information. After analyzing the factual matrix, Ld. AO made addition of peak cred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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