Reassessment based on accommodation-entry information and 6% purchase addition upheld where sales were not doubted.

Reopening under section 147 was treated as valid where the reassessment was based on Investigation Wing information indicating accommodation entries and bogus purchase bills, and there was no factual basis to insist on exclusive recourse to section 153C. The addition on disputed purchases was also sustained at 6% because the purchases were linked to an accommodation-entry group, sales were not doubted, and the estimate was supported by concurrent factual findings. No substantial question of law arose in section 260A proceedings.

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Issues: (i) Whether reopening of assessment under section 147 of the Income-tax Act, 1961 was valid and whether section 153C of the Income-tax Act, 1961 was required to be invoked instead. (ii) Whether the addition sustained at 6% of the disputed purchases called for interference.

Issue (i): Whether reopening of assessment under section 147 of the Income-tax Act, 1961 was valid and whether section 153C of the Income-tax Act, 1961 was required to be invoked instead.

Analysis: The reassessment was founded on information received from the Investigation Wing that the assessees were beneficiaries of accommodation entries and bogus purchase bills issued by the concerned group. The material before the assessing authority showed that the purchases were linked to the alleged entry provider, and the challenge to reopening was not supported by any material showing that seized documents belonging to the assessees had to be assessed only under section 153C. In the absence of any factual foundation for invoking section 153C, the reopening under section 147 was treated as valid.

Conclusion: The challenge to reopening failed, and the contention that assessment had to proceed only under section 153C was rejected.

Issue (ii): Whether the addition sustained at 6% of the disputed purchases called for interference.

Analysis: The authorities below had found that the purchases were supported by quantitative details and sales were not doubted, but the suppliers were linked to the accommodation-entry group. On that footing, the first appellate authority restricted the addition to 5%, and the Tribunal enhanced it to 6% to cover possible revenue leakage. The Court found no reason to disturb this estimate, especially in view of the concurrent factual findings and the consistency adopted in similar matters.

Conclusion: The estimate of addition at 6% was upheld.

Final Conclusion: No substantial question of law arose, and the tax appeals were dismissed, leaving the estimated addition and the validity of reassessment undisturbed.

Ratio Decidendi: Reopening based on credible investigation-wing information about bogus accommodation entries is valid, and where purchases are found linked to such entries but sales are not doubted, an estimate of addition based on the surrounding facts will not ordinarily be interfered with in section 260A proceedings.

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