9911796707
TMI Blog2019 (4) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... both the cases, the assessments were originally completed under Section 143(3) of the Income Tax Act, 1961 [hereafter "the Act"]. 2. The petitioner is a subsidiary of M/s. Century Metal Recycling Private Limited [hereafter "CMR"]. A survey was taken of CMR on 26.03.2015. The survey report led to the issuance of the reassessment notices in the present case. The rationale for the reassessment in both the cases is identical. The extract of one of the "reasons to believe" involved - for AY 2012-13 is as follows: "2.3 During the course of survey operation, it has been observed that CMR purchase their maximum raw material from its subsidiary company M/s. Sanjivani Non Ferrous Trading Pvt. Ltd. The perusal of the financials of the said company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arent that the assessee company has made bogus sales amounting to Rs. 5,97,36,46,243/- crore to it associate concern M/s CMR which is apparent from the discussion in above paras. On perusal of the ITR filed by the assessee it has been observed that against the total sales of Rs. 5,97,36,46,243 the assessee has declared net profit of Rs. 33,12,137 (0.05%). As the assessee has indulged in the activity of bogus sales taking the NP. rate to be 1.5 of the sales the income escaping assessment, would be Rs. 8,96,04,693 (1.5% of sales turnover of Rs. 5,97,36,46,243). The case of the company is squarely covered under explanation 1 of section 147 of I.T Act. The requisite full and true disclosure of all material facts necessary for assessment has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the Revenue's reasoning virtually amounts to a second opinion or review of the final scrutiny assessment for both years. Learned counsel emphasises that what materials were gone into by the AO were borne from documents produced along with the writ petitions, which includes copies of the invoices and other supporting documents to substantiate the petitioner's claim for valid sale to CMR. Learned counsel highlighted that the goods were procured on a wholesale basis, cleared by the petitioner and thereafter sold to CMR, its group company. It was also submitted that the invoices which were allegedly raised were undoubtedly carefully gone into by the AO in the previous scrutiny assessment years and had also passed muster by the superior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts were withheld in the course of the original assessment. In Ms. Phool Chand Bajrang Lal and Anr. v. Income Tax Officer and Anr. 1993 (4) SCC 77, the question as to the bonafides disclosed or materials brought on record in the concluded assessment was in issue. The Supreme Court held as follows: "25. From a combined review of the judgments of this Court, it follows that an Income-tax Officer acquires jurisdiction to reopen assessment under Section 147(a) read with Section 148 of the Income Tax 1961 only if on the basis of specific, reliable and relevant information coming to his possession subsequently, he has reasons which he must record, to believe that by reason of omission or failure on the part of the assessee to make a true and ful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, whether the transaction was genuine or not, if one the basis of subsequent information, the Income-tax Officer arrives at a conclusion, after satisfying the twin conditions prescribed in Section 147(a) of the Act, that the assessee had not made a full and true disclosure of the material facts at the time of original assessment and therefore income chargeable to tax had escaped assessment. The High Courts which have interpreted Burlop Dealer's case (Supra) as laying down law to the contrary fell in error and did not appreciate the import of that judgment correctly." 6. In the present case, the materials on record and made available to the AO are in the form of a survey report dated 26.03.2015, i.e. after conclusion of the scrutin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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