9911796707
TMI Blog2025 (5) TMI 1304X X X X Extracts X X X X X X X X Extracts X X X X ..... der passed by the ld. AO is neither erroneous nor prejudicial to the interests of the revenue. 3. The brief facts of the case show that assessee is a proprietor of Pratik Hardware and Hilife Style dealing in hardware fittings and wholesale trading of textiles fabrics respectively. He filed return of income on 22.10.2017 at a total income of Rs. 13,76,300/-. These facts are stated in para 2 of the revisionary order passed by the ld. PCIT. 4. Subsequently the case of the assessee was reopened by issue of a notice u/s. 148 of the Act on 31.3.2021 reopening the case for AY 2017-18. The AO mentioned that as the information received in the category of high risk transaction on Insight Portal, assessee has significant financial transactions of unaccounted cash of Rs. 16,85,18,922/-. In para 2, the ld. AO has stated that he has a reason to believe that the unaccounted income of the assessee during the year 2016-17 has escaped assessment. In para 3 of the reasons, the AO states that as the return of income has been filed by the assessee and no assessment is made, therefore provisions of clause (b) of Explanation 2 to section 147 are applicable and income has deemed to escape assessment. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly on examination of the record, the ld. PCIT noted that as per financials, assessee's turnover has increased substantially from Rs. 29,72,801/- to Rs. 10,68,06,270/- because of the textile business sales reported by assessee at Rs. 10,14,56,884/-. As per information available the assessee was engaged in fabrics trading in the name of Hilife Style and almost 50% of the sale was in cash which were not accounted for in the books of account. During the AYs 2017-18 to 2020-21, for all these 4 years Rs. 16.85 crores Rs. 36.07 crores Rs. 50.42 crores and Rs. 16.10 crores respectively are unaccounted sales. All unaccounted sales of Rs. 16.85 crores is made to 53 parties. During the course of scrutiny, notice u/s. 133(6) was issued to 10 major parties to furnish the information, but response to such notice was only received in case of 4 parties and copies of invoices were furnished by only 2 parties and further transportation of goods was not substantiated with relevant invoices, the ld. PCIT reached at a conclusion that the AO has completed the assessment without making necessary enquiries and passed the assessment order u/s. 147 on 23.3.2022 which is erroneous and prejudicial to the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment. But in fact, the reassessment notice is for AY 2017- 18. He referred to the revisionary order passed u/s. 263 of the Act and also the notice issued u/s. 263 of the Act on 11.3.2024 wherein it is clearly mentioned that assessment was completed on 26.11.2019 by accepting the returned income of Rs. 13,76,300/-. He therefore submitted that reasons recorded by the AO for reopening of the assessment was based on an incorrect information. 12. He further referred to the reasons and submitted that there is no reference to any tangible material for reopening of the assessment. He submits that the reopening has been made as on Insight Portal information is received in the category of high risk transaction where assessee has made unaccounted cash sales of Rs. 16,85,19,922/-. It was submitted that there is no evidence or material available with the assessee with respect to the above statement. Therefore the reopening is bad in law. 13. With respect to the original assessment proceedings, he referred to correspondence placed at page 170-171 wherein letters dated 14.11.2019 & 23.11.2019 show that original assessment order was passed u/s. 143(3) which has not been mentioned by the ld. AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to reply received from the parties and stated that those parties have also not confirmed any cash sales made by the assessee to them. In view of this, the revisionary proceedings and reassessment proceedings, both are independently connected. 17. We have carefully considered the rival contentions and perused the orders of ld. lower authorities. The fact of the case is that on return of income filed by the assessee, there is an assessment order passed by the AO as mentioned by the ld. PCIT. Subsequently the case of assessee was reopened by issue of notice u/s. 148 of the Act. In the reasons recorded for reopening of assessment, the ld. AO has noted that there is information available on Insight Portal that assessee has sold goods of Rs. 16.85 crores without issue of bills and cash recorded in his books of account. By recording the reasons the ld. AO has categorically mentioned that he has reason to believe that escapement of income is for AY 2016-17, whereas the reassessment proceedings were disturbed for AY 2017-18. The ld. AO further mentioned that there is no assessment made in the case of assessee on the returned income filed. Therefore he did not look into the record that orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of cash sales summary, it is apparent out of total sales of Rs. 10.14 crores, sale of Rs. 96.86 crores is recorded in cash in the cash book of assessee. Beyond that, no information is available with the Revenue that any sum received by assessee on sale of goods of fabric is not recorded in the books of account. It was further shown that the amount that has been stated as sales summary without bill is already in the books of account of the assessee. E.g., in case of Progress Zone, Bangalore a sum of Rs. 1,03,061/- was not stated to be accounted for in the books as per the TEP. However, on receipt of information from the same party it was found that Bill No. 708 dated 9.3.2017 is recorded in the books of account of the buyer and the seller. The same facts are available in case of other 3 parties shown before us which is also being noted that in case of Fashion Era all payments are made by the buyer by cheque. Therefore, even in the reassessment proceedings in the absence of evidence no addition was made. The ld. PCIT also did not mention reference to any evidence. Therefore it is an accepted fact that no addition could have been made in the hands of the assessee in the absence of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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