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TMI Blog2020 (3) TMI 717X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 2002-03. The grounds raised by the assessee are reproduced as under: "That on the facts and in the circumstances of the case and in law the learned CIT(A) erred in confirming the following actions of the Assessing Officer:- (i) initiating proceedings u/s 147 of the Income Tax Act and completing the assessment u/s 147/143(3) of the Act on income of Rs. 43,68,472/-; (ii) making an addition of Rs. 38,99,527/- on account of alleged undisclosed purchase on surmises and conjectures; and (iii) making an addition of Rs. 38,995/- as unexplained expenditure allegedly by way of commission paid even though there was no material in support of such allegations. 2.1 This appeal was earlier decided by the Tribunal vide order dated 14/10/2011 wherein the first ground of appeal was decided in favour of the assessee and it was held that issuance of notice u/s 148 and the communication and furnishing of the reasons would go hand-in-hand. It was further held that the reasons were to be supplied to the assessee before the expiry of the period of the six years. The Tribunal quashed the reassessment on the ground that reasons were not supplied before the expiry of the six years fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that reassessment shall not be made until there has been service. The requirement of issue of notice is satisfied when a notice is actually issued. In this case, admittedly, the notice was issued within the prescribed period of limitation as March 31, 1970, was the last day of that period. Service under the new Act is not a condition precedent to conferment of jurisdiction in the Income-tax Officer to deal with the matter but it is a condition precedent to making of the order of assessment. The High Court in our opinion lost sight of the distinction and under a wrong basis felt bound by the judgment in [1964]53ITR100(SC) ." In G.K.N. Driveshafts (supra), it was held that: "[W]e clarify that when a notice under Section 148 of the Income Tax Act is issued, the proper course of action for the notice is to file return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons, the notice is entitled to file objections to issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order." A.G.Holdings (supra) held that: "There is no requireme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed more than three and a half years after they were sought. In the present case, however, the assessee filed his response to the notice under Section 148 on 10.4.2009. The record further reveals that the reasons recorded for reopening were made available to the assessee company on 31.9.2009. The reassessment order was made on 15.12.2009, and it is clear from the same that the assessee had adequate notice of the "reasons recorded", and had presented objections against it. It is clear that the opportunity that was conceived in G.K.N. Driveshafts to be given to assessees before reassessment was satisfactorily accorded to the assessee in the present case. Hence, there was no shortcomings in the reassessment proceedings. 10. For the above reasons this Court is of the opinion that the Tribunal's order cannot be sustained. The same is accordingly set aside. The matter is remanded back to the Tribunal, which shall consider assessee's appeal on its merits and decide in accordance with law." 2.2 In view of the above decision of the Hon'ble Delhi High Court, we are required to adjudicate the ground No. (ii) and (iii) of the appeal only. 3. In ground No. 2, the assessee has challen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st that additional stock and thus no addition should be made on account of unexplained or bogus purchases. 3.2 Above contention of the assessee was not accepted by the Assessing Officer mainly on the ground that the goods were allegedly purchased from the above three parties at Mumbai, but the assessee failed to file any evidence and proof of transportation of those goods from Mumbai to Gorgon, where the assessee's factory is located and also failed to file evidence of transport expenses incurred against those purchases. The Assessing Officer noted that the assessee had filed copy of 17 sales bills of the parties but in none of the bills mode of transport, LR number, Packing challan number, name of the agent, document to which sales made etc. had been mentioned. He also observed that bill number was also not printed and number was written in hand. The Assessing Officer asked the assessee to file confirmation of its account from the above three parties, however the assessee failed to file said confirmation. In view of above facts, the learned Assessing Officer held the purchase of Rs. 38.99 lakhs as unexplained and also added commission of Rs. 38,995/- at the rate of the 1% of une ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y way of obtaining accommodation purchase bills. 4.4 In view of the aforesaid discussion, I hold that the AO was fully justified in bringing to tax the amounts of Rs. 3899527 and Rs. 38995 representing value of accommodation purchase bills and payment of commission thereon respectively. Accordingly, both the additions are being sustained." 3.5 Before us, the learned Counsel of the assessee has filed a paper-book containing pages 1 to 34 and relied on the submission made before the lower authorities. The learned Counsel has submitted that addition has been sustained merely on the statement of the third-party and no other corroborative evidence has been found to support the contention of the thirdparty. 3.6 On the contrary, the Learned DR relied on the order of the lower authorities and submitted that the assessee has neither filed any confirmation from third parties in support of the alleged purchases nor filed any proof of transport of the goods from Mumbai to Gurgaon and thus assessee failed to discharge its onus. The learned DR submitted that excess stock found cannot be adjusted against the bogus purchases as the assessee has failed to co-relate the excess stock with the acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee has not filed any such evidence to rebut the finding of the Assessing Officer as well as the Learned CIT(Appeals). Mere filing of copy of purchase bills, goods received notes or payment by cheque was not sufficient to establish the purchases. The assessee was required to discharge its onus of substantiating the purchases with deliveries of goods. The responsibility of the assessee to substantiate purchases was further increased in view of the statement of Shri Rakesh Kumar Gupta that he had provided accommodation entry bills without supplying the goods physically. But in view of the failure on the part of the assessee in discharging its onus, we do not find any infirmity in the order of the lower authorities on the issue in dispute and accordingly we uphold the same. The ground No. 2 and 3 of the appeal of the assessee are accordingly dismissed. ITA No. 4304/Del./2011 Assessment year: 2003-04 4. In ITA No. 4304/del/2011 for assessment at 2003-04, the assessee has raised following grounds of the appeal: "That on the facts and in the circumstances of the case and in law the Ld. CIT(A) erred confirming the following actions of the Assessing Officer:- (i) initiating ..... X X X X Extracts X X X X X X X X Extracts X X X X
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