9911796707
TMI Blog2018 (6) TMI 1539X X X X Extracts X X X X X X X X Extracts X X X X ..... engaged in the business of trading in Bearing. It filed its return of income u/s 143(1) on 22.09.2010 declaring total income of Rs. 3,09,233/-. The assessment was reopened u/s 147 and assessment was completed u/s 143(1) read with Section 147 determining the total income at Rs. 28,26,345/- by adding an amount of Rs. 25,17,112/- as bogus purchases made from hawla dealers. On appeal the first appellate authority confirmed the same. Further aggrieved the assessee is in appeal before us by challenging the legality of reopening of assessment and addition made on merits. 3. The ld. Counsel for the assessee Shri Sunil Surana filed a paper book running into 157 pages and submitted that the reopening is bad in law as it suffers from nonapplication o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of the assessee. 5. He argued that the information was received from the DGIT(Inv.)- Mumbai and the Assessing Officer has no power to investigate the correctness of the information, unless he reopens the assessment. He relied on the decision of Hon'ble Delhi High Court in the case of Pr.CIT-7, vs. Paramount Communication Pvt. ltd. in (2017) 79 Taxmann.com 409 (Del). 6. On merits he referred to the order of the Assessing Officer as well as the order of the Ld. CIT(A) and submitted that the assessee has no stock register. He submitted that there is a difference between original challan numbers and computer generated challans and hence the invoice produced cannot be relied upon. On facts he relied on the order of the Ld. CIT(A) and praye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies as no documents in support of movement and receipt of goods have been produced by the assessee and the Sales Tax Department, Govt. of Maharashtra has also found the aforesaid parties as non-genuine dealers who had issued false bills without delivery of goods. Thus, it is clear that the purchases were made from the some other parties but the details are the same have not been disclosed to the Department." 8. The above findings of the AO goes against his conclusion that the entire purchases of Rs. 25,17,112/- are bogus and the same has to be added to the income. When the purchase is said to have been made from some parties and when bill are obtained for those purchases from those hawla dealers, the amount of purchase cannot be added. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. On the other hand, the assessing officer has made this disallowance based on surmises and conjectures, that to, by giving contradictory findings on the factum of purchase. Thus, we deleted the addition made and allow this ground of the assessee. 11. Coming to the issue of reopening the assessing officer has recorded the following 12. On a perusal of these reasons we find that on similar circumstances " B" Bench of the Kolkata ITAT in I.T.A. No. 660/Kol/2011 for assessment year 2002-03 at para 8-9 held as follows: "8. We have heard the submissions of the learned counsel for the assessee both on the validity of initiation of re-assessment proceedings as well as the merits of the appeal. None appeared on behalf of the departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the assessee before us was that the reasons recorded by the AO were mere information received from D.I.T.(Investigation), New Delhi. There was no independent application of mind by the AO based on which it can be said that he arrived at the satisfaction that the income of the assessee is chargeable to tax has escaped assessment. It was submitted that information received by the AO was vague and uncertain and cannot be construed to be sufficient and relevant material on the basis of which reasonable person can form belief regarding escapement of income. Reliance was placed by the learned counsel for the assessee on the decision of the Hon'ble Delhi High Court in the case of CIT vs Insceticides (India) Ltd 357 ITR 330 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l facts the Hon'ble Dlehi High Court in the case of CIT vs Insecticides (India) Ltd (supra) has taken a view that the reasons recorded were vague and uncertain and cannot be construed as satisfaction on the basis of the relevant material on the basis of which a reasonable person can form a belief that income has escaped assessment. The Hon'ble Delhi High Court has also come to the conclusion that the reasons recorded did not disclose the AO's mind regarding escapement of income. The Hon'ble Delhi High Court ultimately held that initiation of proceedings u/s 148 of the Act was not valid and justified in the eyes of law. The facts and circumstances in the present case are identical to the case decided by the Hon'ble Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
