TMI Blog2021 (3) TMI 821X X X X Extracts X X X X X X X X Extracts X X X X ..... and there is no entry depicting purchases from the said company. In such a situation, on the factual matrix of the case, it is our considered opinion that the reopening in the instant case was bad in law specially, when the error in the approach of the Assessing Officer in recording of reasons on account of alleged bogus purchases was brought to the notice of the Assessing Officer in the objections raised by the assessee against initiation of re-assessment proceeddings. In the instant case, although, the assessee has filed return of income, the Assessing Officer proceeding to reopen the assessment by mentioning that no voluntary return had been filed by the assessee and, thereafter, proceeded to reopen the assessment on wrong appreciation facts on record, in such a situation, we have no option but to quash the reassessment proceedings itself. Accordingly, relying on the above mentioned judicial precedents, we quash the re-assessment proceedings. Even on merits, the addition has no feet to stand on as the impugned addition has been made on account of alleged bogus purchases and the assessee has demonstrated with an ample evidences that there were no purchases from M/s Maa Durg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as, the assessee had already filed his return of income for the AY vide ack. no.011771 on 21.12.2016 declaring income of ₹ 2,19,175/-. (b) That the ld. CIT(A) failed to appreciate the fact that the reasons for reopening of assessment by the ld. AO are based on the borrowed satisfaction and that there is no application of independent mind by the PCIT in granting approval for reopening. (c) That the ld. CIT(A) failed to appreciate the fact that the AO has not disposed of the objection so raised by the assessee in the spirit of law. (d) That the ld. CIT(A) failed to appreciate the fact that the submission of the copy of VAT returns Filed for the year, whereby the names of parties from whom purchases were made is appearing, and that there is no name of the party M/s Maa Durga Trading company, the alleged party in the year under assessment, Also, the details of the names of the parties from whom the purchases were made during the year were given, showing that no purchases were made from the alleged party, were totally ignored. Even the Reference by the ld. CIT(A) of GKN Driveshaft India Ltd. Vs. ITO Orss. (2003) 259 ITR 19 (SC) that the AO has followed the proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by his company to the different parties. His company M/s Maa Durga Trading Company received e payment through cheques against the bills issued and then they withdrew the cash and arcer deducting the commission, remaining cash was given to the same party from which tney received cheque against bogus bills. There was no selling/ supply of goods of these parties. Sh. Raman Sood prop, of M/s Rama Enterprises, was one of the party w'hich he provided accommodation entries though bogus billing against which no goods were supplied by M/s Maa Durga Trading Company. Sh. Raman Sood prop, of M/s Rama Enterprises gave cheques to Vinod Goyal prop, of M/s Maa Durga Company which he deposited in his banks namely Kotatk Mahindra Bank, Sector-16, Faridabad and Axis Bank, Faridabad in following manner in F.Y. 2008-09 against the bogus purchases. S.N Date Mode of Payment Cash/Cheque Amount in Rs. 1. 22.10.2008 Cheque deposited in Kotak Mahindra Bank ₹ 40,000/- - 2. 14.11.2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted in Kotak Mahindra Bank ₹ 1,20,000/- 19. 30.12.2008 Cheque deposited in Kotak Mahindra Bank ₹ 4,95,000/- 20. 30.12.2008 Cheque deposited in Kotak Mahindra Bank ₹ 5,00,000/- 21. 02.01.2009 Cheque deposited in Kotak Mahindra Bank ₹ 1,60,000/- 22. 03.01.2009 Cheque deposited in Kotak Mahindra Bank Rs, 4,00,000/- 23. 06.01.2009 Cheque deposited in Kotak Mahindra Bank ₹ 1,00,000/- 24. 14.01.2009 Cheque deposited in Kotak Mahindra Bank ₹ 65,000/- 25. 30.01.2009 FTD from 286.200,1917 to ?86.201.88 ₹ 7,50,000/- 26. 03.02.2009 FTD from 286.200.1917 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43. 19.3.2009 FTD from 286.200.1917 to 286.201.88 all are from Kodak Mahindra Bank ₹ 7,00,000/- 44. 07.04.2008 Axis Bank ₹ 6,00,000/- 45. 07.04.2008 Axis Bank ₹ 3,00,000/- 46. 04.04.2008 Axis Bank ₹ 4,00,000/- 47. 04.04.2008 Axis Bank ₹ 4,00,000/- 48. 04.04.2008 Axis Bank ₹ 3,00,000/- 49. 15.04,2008 Axis Bank ₹ 1,25,000/- 50. 17.04.2008 Axis Bank ₹ 3,60,000/- 51. 21.04.2008 Axis Bank ₹ 11,60,000/- 52. 24.04.2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awn to the fact that the said ledger account only contained opening balance and debits pertaining to payments made to M/s Maa Durga Trading Company during the year under consideration and that there were no purchases from the said company in the relevant year. It was also submitted that apparently these aspects were ignored by the Lower Authorities, although the same had been brought to their notice. The Ld. AR also placed reliance on numerous judicial precedents to support his contention that the reopening was bad in law. 4.0 Per contra, the Ld. Sr. Departmental Representative (DR) placed reliance on the concurrent findings of both the Lower Authorities and submitted that the Department had acted on the basis of information received from the Investigation Wing regarding the assessee being one of the parties benefiting from accommodation entries relating to bogus purchases and, therefore, the reopening was within the four corners of law. The Ld. Sr. DR also submitted that the assessee could not substantiate the claim of no purchases having been made from M/s Maa Durga Trading Company during the year under consideration as no books of account were produced. The Ld. Sr. DR also su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsidered opinion this approach of the Lower Authorities is not correct in as much as it remains undisputed that the assessee had duly filed copies of audited accounts at the time of filing of the return of income and so it cannot be inferred that the assessee did not maintain any books of account. Further the evidentiary value of the VAT returns cannot be simply be brushed aside specially when the same were brought to the notice of the Assessing Officer in the very first instance when the assessee was raising objections against the initiation of reassessment proceedings. Even the table produced by the Assessing Officer in his assessment order depicts only payments made to M/s Maa Durga Trading Company and there is no entry depicting purchases from the said company. In such a situation, on the factual matrix of the case, it is our considered opinion that the reopening in the instant case was bad in law specially, when the error in the approach of the Assessing Officer in recording of reasons on account of alleged bogus purchases was brought to the notice of the Assessing Officer in the objections raised by the assessee against initiation of re-assessment proceedings. It is trite la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f PCIT vs. M/s SNG Developers Ltd., reported in 404 ITR 312 has held that condition precedent for issue of notice for reassessment is that the reason to believe that income has escaped assessment must be based on correct facts. Notice based on wrong facts is without jurisdiction and has to be quashed. This order of the Hon ble Delhi High was challenged before the Hon ble Apex Court and the Hon ble Apex Court dismissed the Revenue s Special Leave Petition in SLP No.42379/2007 vide order dated 9th February, 2018. Since, in the instant case, although, the assessee has filed return of income, the Assessing Officer proceeding to reopen the assessment by mentioning that no voluntary return had been filed by the assessee and, thereafter, proceeded to reopen the assessment on wrong appreciation facts on record, in such a situation, we have no option but to quash the reassessment proceedings itself. Accordingly, relying on the above mentioned judicial precedents, we quash the re-assessment proceedings. Before parting, we would also like to add that even on merits, the addition has no feet to stand on as the impugned addition has been made on account of alleged bogus purchases and the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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