ITAT upholds reopening of assessment despite notice issued to deceased assessee & adjusts profit estimation.

The ITAT upheld the CIT(A)'s decision to allow the reopening of assessment under section 147, despite the notice being issued in the name of a deceased assessee. The legal heir's subsequent notification of the death did not invalidate the notice. Additionally, the ITAT supported the CIT(A)'s directive to estimate profit on alleged bogus purchases at 10% instead of the 12.5% initially determined by the AO. The appeals were dismissed, affirming the CIT(A)'s orders on both issues.

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Issues involved:
1. Reopening of assessment validity
2. Estimation of profit on alleged bogus purchases

Reopening of assessment validity:
The appeals were filed by the assessee against the order of CIT(A)-29, Mumbai for A.Y.2009-10 regarding the order passed under sections 144 and 147 of the IT Act. The grounds taken by the assessee in ITA No.470/Mum/2017 mainly challenged the reopening of assessment under section 147. The CIT(A) upheld the reopening, stating that the AO was justified in issuing a notice under section 148 in the name of the deceased assessee. The legal heir of the deceased informed the AO about the death after the notice was served. The CIT(A) dismissed the argument that the notice was invalid due to lack of information about the death. The CIT(A) referred to various judicial pronouncements to support the validity of the proceedings against the legal heir. The ITAT upheld the reopening, finding no reason to interfere with the CIT(A)'s decision.

Estimation of profit on alleged bogus purchases:
The AO made an addition with regard to the profit embedded in the alleged bogus purchases at 12.5%. The CIT(A) directed the AO to estimate the gross profit at 10% of the alleged bogus purchases after considering the submissions made by the assessee. The CIT(A) observed that the assessee failed to prove the genuineness of the purchases and that the purchases were likely made from the grey market. The CIT(A) relied on judicial pronouncements to support the addition of profit on the bogus purchases. The ITAT upheld the CIT(A)'s decision to restrict the addition to 10% of the profit on the bogus purchases instead of 12.5% estimated by the AO. The ITAT found no reason to interfere with the CIT(A)'s order in this regard.

In conclusion, both appeals were dismissed, and the orders of the CIT(A) were upheld by the ITAT regarding the reopening of assessment and the estimation of profit on alleged bogus purchases.

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