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TMI Blog2019 (12) TMI 663X X X X Extracts X X X X X X X X Extracts X X X X ..... ded by Shri Rakesh Gupta, Shri Vishesh Gupta, Shri Navneet Jain and Shri Vaibhav Jain through bogus entries vide the concerns namely M/s.Shree Bankey Bihari Trading Co., M/s.Vishu Tradipng Co., and M/s. Shree Shyam Trading Co., amounting of Rs. 50,67,260/-. The AO has scrutinized the audited accounts of the assessee for the year under consideration and found that the assessee had disclosed these transactions but the fact that the assessee company obtained accommodation entries from the aforesaid three parties controlled by Shri Rakesh Gupta, Shri Vishesh Gupta, Shri Navneet Jain and Shri Vaibhav was not disclosed. Therefore, the AO had reason to believe that the taxable income of Rs. 50,67,260/- represented by the transactions has escaped assessment due to failure of the assessee to disclose material facts truly and fully necessary for to make assessment for A.Y. 2006-07. Accordingly, the AO had issued a notice u/s.148 on 30.03.2013 which were duly served upon the appellant. The assessee vide letter dated 25.04.2014 submitted before the AO that original return of income filed on 15.11.2007 may be treated as filed in response to notice u/s.148 of the Act. Thereafter, a copy of reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6R which is allotted to a different entity situated in the state of Maharashtra with registered at Vardha that company registration no.145024 with date of incorporation of 12.03.2014 with different set of directors of which address is mentioned as FB/81, East Mohan Co-op Industrial Estate, Extension, Badarpur, Delhi whereas the assessee's PAN is AAACS3043E is with address as BF/B-1, Mohan Co-operative Industrial Estate, Mathura Road, Badarpur, New Delhi. Therefore, the notice u/s.148 dated 30.03.2013 has been issued on incorrect address of the appellant, which shows nonSagar application of mind of the AO. Further, as per discussion in para 9 at page 3 of the assessment order which is evident that the photo copies of the statement of the concerned parties and seized documents gathered during proceedings u/s.153A / 153C were provided by the ACIT, Central Circle-10, New Delhi on 14.03.2014. Therefore, the material on which the AO formed his belief was not available at the time of recording of reasons. The learned Counsel placed reliance in the case of Unique Metal Industries Vs. Income Tax Officer in ITA No. 1372/Del/2015 dated 28.10.2015 of ITAT Delhi and submitted that the documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing some objection regarding mentioning incorrect PAN address. Further, the assessee vide letter dated 25.04.2014 submitted before the AO that the original return of income filed on 15.11.2007 may be treated as return of income filed in response to notice u/s.148. The objections filed by the assessee were also disposed off by the AO vide separate order. Thus, where the content of the notice are correct and which has been issued in the correct context then typographical error in address of PAN does not have material impact as per provisions of section 292B of the Act. We, further find that the assessee has duly received the notice u/s.148 of the Act and duly participated in the assessment proceedings and also stated that the original return filed by it may be treated as return in response to notice u/s.148, therefore any defect in the notice presumed to have been validly served as per provisions of section 292BB of the Act. With regard to contention of the assessee that the AO has failed to apply his mind and notice has been issued without application of mind, we find that the AO was in possession of the information from the ACIT, Central Circle-10, New Delhi which stated that the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitiating assessment proceedings. This decision of Hon'ble Delhi High Court has been approved by the Hon'ble Supreme Court in the case 250 taxmann 100 (SC). In view of these facts, we are of the considered opinion that the reopening assessment is valid in this case, accordingly the ground no.1 to 5 taken by the assessee are therefore dismissed. 8. Ground No.6 relates to confirming addition of Rs. 12,25,610/- being difference of average rate purchases from alleged bogus parties with average rate of purchases from other parties ignoring the fact that the sales made by the appellant has not been doubted by the AO or ld.CIT(A). 9. Brief facts as emerged from the assessment record and appellate order are that the assessee has obtained accommodation entries / bogus purchases bills from M/s.Shree Bankey bihari Trading Co.,; M/s.Vishu Trading Co.,; M/s.Shree Shyam Trading Co., and M/s.Om Agencies amounting Rs. 53,58,954/- which were admitted by the entry provider in their statement before the ACIT, Central Circle-10, New Delhi that they have provided bogus purchase accommodation entries from their aforesaid concerns. Therefore, the AO concluded that the purchase shown by the assessee c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to preceding years of Gross Profit Rate of 1.92%, therefore the Gross Profit shown by the assessee is higher than the previous year [PB-101]. The ld.Counsel further placed reliance in the case of Unique Metal Industries Ltd., (supra) Tarun Metal Co., (supra) wherein the addition made on account of bogus purchases of aforesaid parties were deleted. 12. Per contra, the learned Departmental Representative vehemently supported the order of the AO for deleting the addition of entire bogus purchases from the aforesaid parties. The ld.DR further placed reliance in the case of N.K.Protein Ltd., Vs. DCIT 389 ITR 541 (Guj) submitted that the AO was justified in making addition of 100% bogus purchases. It was further submitted that SLP of N.K.Protein has also dismissed in SLP(C) No.963/2017 dated 16.01.2017. 13. In rejoinder to above, the ld.Counsel for the assessee submitted that the decision of N.K.Protein is distinguishable on the facts that in the said case a search was conducted leading to seizing recovery of cheques, vouchers of number of concerns along with books, blank purchase bills, books, letter heads from search, thus, there was suppression of profit which is not in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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