Tribunal upholds reopening based on prima facie reasons, applies 8% GP rate on alleged bogus purchases

The Tribunal upheld the validity of the reopening u/s.147 based on prima facie reasons provided by the Investigation Wing. It directed the application of an 8% GP rate on alleged bogus purchases, partially allowing the appeal.

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Issues: Validity of reopening u/s.147, Addition of Rs. 8 lacs on account of alleged bogus bill

Validity of Reopening u/s.147:
The appeal was filed against the order for the quantum of assessment passed u/s.143(3)/147 for the Assessment Year 2009-10. The assessee challenged the validity of reopening u/s.147 and the addition of Rs. 8 lacs on account of an alleged bogus bill issued in the name of M/s. Vee Gee Industrial Enterprises. The Assessing Officer reopened the case based on information received regarding a cheque issued by the assessee to M/s. Vee Gee Industrial Enterprises, which was suspected of providing bogus billing. The assessee objected to the reopening, stating that the purchase from M/s. Vee Gee Industrial Enterprises was genuine as the supplier was registered with VAT and TIN numbers. However, the Assessing Officer, after inquiry and non-compliance with summons, concluded the purchase was bogus and made the addition of Rs. 8 lacs.

Addition of Rs. 8 lacs on account of alleged bogus bill:
The CIT(A) dismissed the objection to the validity of reopening u/s.147, stating that the Assessing Officer had applied his mind and had sufficient information to form a reason to believe. Regarding the addition of Rs. 8 lacs, the CIT(A) noted the non-compliance of the proprietor of M/s. Vee Gee Industrial Enterprises with summons and lack of evidence from the assessee, confirming the addition. The appellant argued that the Assessing Officer did not independently apply his mind for reopening, citing various judgments. The appellant contended that the purchases were genuine, supported by invoices and details, and suggested applying a GP rate of 6%. The Tribunal upheld the validity of reopening u/s.147 based on the information received, and directed the Assessing Officer to apply an 8% GP on the alleged bogus purchases, partially allowing the appeal.

In conclusion, the Tribunal upheld the validity of the reopening u/s.147 based on the prima facie reasons provided by the Investigation Wing. The Tribunal also directed the application of an 8% GP rate on the alleged bogus purchases, partially allowing the appeal.

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