TaxTMI 
TaxTMI 
2018 (5) TMI 1490
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....is engaged in the business of dealing in paper and board. For the assessment year 2011-12, the petitioner had filed return of income. The assessee had shown purchases worth Rs. 4.33 crores from one M/s. Tarini Trading Pvt. Ltd. During the course of reassessment proceedings, the Assessing Officer doubted the genuineness of such purchases on the basis of information received from the VAT department at Mumbai. The Assessing Officer called upon the assessee to prove such purchases and desired to examine the vendor i.e. representative of M/s. Tarini Trading Pvt. Ltd. The assessee was accordingly asked to produce such representative. Assessee complied with such directions. Shri Rajkumar Sharma, Director of M/s. Tarini Trading Pvt. Ltd. appeared b....
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....ventually, he has scaled down his addition from Rs. 17.33 lacs as originally proposed, to Rs. 9.57 lacs made in the order of assessment. 4. The assessee carried the matter in appeal before the Commissioner (Appeals). The assessee desired that the entire addition be deleted. While this issue was thus pending before the Appellate Commissioner, the present respondent issued the impugned notice seeking to take the order of assessment in suo motu revision. His sole ground was that the Assessing Officer having held that the entire purchase of Rs. 4.33 crores from M/s. Tarini Trading Pvt. Ltd. being bogus, had erred in limiting the addition to only Rs. 9.57 lacs on the basis of gross profit ratio. 5. While this notice was pending and the petitio....
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.... the impugned show-cause notice on 13.02.2018. In such reply, the assessee took various contentions, principal being that the order of assessment was neither erroneous nor prejudicial to the interest of the Revenue and further that the Appellate Commissioner having already granted relief to the assessee, on this very ground, on the principal of merger also, the revisional powers would not be available. 7. Appearing for the petitioner, counsel Mr. Hemani raised two principal contentions: (i) That the Commissioner was wrong in observing that the Assessing Officer had held that the purchases were bogus. This was contrary to the findings of the Assessing Officer and the impugned notice thus, proceeded on erroneous factual premises; (ii) Th....
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....um of the genuineness of the purchases made by the petitioner. He noticed that the goods were delievered directly to the petitioner's purchaser and the petitioner was not billed for such transportation. In his opinion therefore, the petitioner should have disclosed higher profit since he was rid of the transportation charges. He put the petitioner to notice and made addition @ 4% GP on the gross turnover. In the process, he gave benefit of the profit already disclosed by the petitioner. 10.Two things thus immediately become clear. First that the Assessing Officer did not hold that petitioner's purchases from M/s. Tarini Trading Pvt. Ltd. were bogus. In fact, he held to the contrary accepting the evidence produced by the petitioner ....
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....ns proposed by the Commissioner in the impugned notice are inextricably inter linked. The Commissioner argues that the entire purchases were bogus. The Assessing Officer accepted the purchases as genuine but added certain amount on the premise that the assesse's profit from such dealings would have been higher than disclosed. The entire issue was at large before the Appellate Commissioner. It is well known that the Commissioner (Appeals) while hearing the assessee's appeal has powers to even enhance the assessment. If he was of the opinion that not only limited additions made by the Assessing Officer but much larger additions were justified, he could have certainly exercised such powers, of course after putting the assessee to notic....