2018 (10) TMI 801

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....aised multiple original grounds as well as additional grounds, however, only the following grounds have been urged before us during hearing by Ld. Authorized Representative [AR] for assessee, Shri N.M.Porwal:- 1. On the facts and in the circumstances of the case, the CIT(A) erred in confirming the addition at 12.5% of the alleged bogus purchases. 2. The CIT(A) erred in not appreciating that the information received from Director General of Income-tax, Mumbai was made the basis for reopening the assessment without there being any independent application of mind by the A.O. 3. The CIT(A) erred in not appreciating that except for assertion that there were bogus purchases, the A.O. has not referred to any material on the basis of which....

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....sed u/s 143(1). During impugned AY, the assessee being resident individual was engaged as trader of steel under proprietorship concern namely Niton Steel & Alloys. 2.2 The reassessment proceedings were initiated vide issuance of notice u/s 148 dated 14/03/2014 pursuant to receipt of certain information from the Sales Tax Department, Maharashtra wherein it was found that the assessee stood benefitted of alleged bogus purchases aggregating to Rs. 28.61 Lacs from four parties, the details of which have already been extracted at para-2 of the quantum assessment order. The assessee offered the original return of income in response to notice u/s 148. The Ld. AR, before us, duly admitted that the copy of the reasons recorded to initiate reassess....

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.....61 Lacs from such hawala parties. 3. Aggrieved, the assessee agitated the same without any success before Ld. CIT(A) vide impugned order dated 23/11/2016 wherein the Ld. CIT(A), relying upon several judicial pronouncements, instead of peak credit, restricted the impugned additions to 12.5% of the alleged bogus purchases. Aggrieved, the assessee is in further appeal before us. 4. The Ld. Authorized Representative for Assessee [AR], Shri N.M.Porwal, drawing our attention to the documents placed in the paper book contested the addition which has been controverted by Ld. Departmental Representative [DR], Shri Asghar Zain VP. 5. We have carefully heard the rival contentions and perused the relevant material on record including documents pla....

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....ceedings on legal grounds from various angles. So far as the reassessment jurisdiction is concerned, we find that the original return was processed u/s 143(1) and the reopening has been done within a period of four years. Therefore, the only requirement, in such a case, to acquire the valid jurisdiction was that the Assessing Officer had reasons to believe that certain income escaped assessment. The tangible material in the shape of information from Sales Tax Department came to the possession of Ld. AO which led the Ld. AO to form the requisite belief. The copies of reasons were duly supplied to the assessee during proceedings. By utilizing the tangible material, Ld. AO formed the belief that certain income escaped assessment and therefore,....