Tribunal partially allows appeal, dismisses natural justice violation claim, upholds reassessment.

The appeal was partly allowed by the Tribunal, which dismissed the claim of violation of natural justice due to the assessee's failure to utilize opportunities given. The reassessment under section 147 was deemed valid despite objections raised by the assessee. Regarding the addition made on account of ingenuine purchases, the Tribunal found insufficient evidence linking the cash withdrawals to the assessee or proving the purchases were ingenuine. Consequently, a 5% profit element was estimated on the purchases, partially allowing the appeal. The decision was pronounced on 29/04/2022.

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Issues: Violation of principles of natural justice, Validity of re-assessment u/s.147, Addition made on account of ingenuine purchases

Violation of principles of natural justice:
The assessee failed to appear or provide written submissions despite multiple opportunities. The ld. CIT(A) disposed of all grounds raised by the assessee, giving detailed findings, and the appeal was heard based on available materials. As the assessee did not utilize the opportunities given, the claim of a violation of natural justice was dismissed.

Validity of re-assessment u/s.147:
The reassessment was initiated based on information regarding transactions with a person involved in suspicious bank activities. The ld. AO followed the legal procedure as per the GKN Driveshafts case, ensuring the jurisdiction for reopening the assessment. Despite objections raised by the assessee, the reassessment was deemed valid, leading to the dismissal of the challenge against the re-assessment.

Addition made on account of ingenuine purchases:
The ld. AO alleged ingenuine purchases of Rs.1,08,04,800 through various entities controlled by a suspicious individual. The assessee provided details, but the concerns were unresponsive to notices. The ld. AO disallowed the purchases, upheld by the ld. CIT(A). However, the Tribunal found no concrete evidence linking cash withdrawals to the assessee or proving the purchases were ingenuine. As the assessee failed to provide further evidence or explanations, the Tribunal estimated a 5% profit element on the purchases, partially allowing the appeal.

In conclusion, the appeal was partly allowed based on the Tribunal's analysis of the issues raised, including the violation of natural justice, the validity of re-assessment, and the addition made on account of ingenuine purchases. The decision was pronounced on 29/04/2022.

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