TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 189
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....Subsequently, pursuant to the search operations carried out at the premises of DSC Group of companies on 28.8.2012, the Investigation Wing found certain bogus purchases made through unexplained sources by the assessee and proceedings were taken up accordingly. Notice dated 28.3.2013 was issued u/s 148 of the Income-tax Act, 1961 ("the Act") and the assessee replied that the original return filed u/s 139 of the Act may be treated as return filed in response to notice u/s 148 of the Act. Subsequently, notice u/s 143(2) of the Act was issued and proceedings were taken up. Learned AO concluded the assessment by an order dated 30.3.2014 by making an addition of Rs. 3,01,69,142/- being the amount of unverified purchases. According to the learned AO, the assessee made purchases from the group company by name M/s JMD Building Material Suppliers. Such M/s JMD Building Material Suppliers when required by the learned AO failed to furnish the relevant documents, the assessee company could furnish the supporting documents relating to the purchases to the extent of Rs. 92,34,545/- only where its total purchases from M/s JMD Building Material Suppliers was Rs. 3,94,03,687/-, as such, the balance ....
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....e u/s 148 after the expiry of four years from the end of the relevant assessment year to prove that any income chargeable to tax has escaped assessment by raising all the failure on the part of the assessee to make a return u/s 139 or any response to a notice issue under sub section (1) of Section 142 or Section 148 or to disclose fully and truly all material facts necessary for the assessment. In this case, absolutely there is no finding on the part of the AO that the assessee is guilty of not furnishing any material fact fully and truly and in the absence of such a finding, the assumption of jurisdiction by the learned AO is bad in law. 6. The next contention of the learned AR is that the material that was used against the assessee for reopening the concluded assessment is the material that was gathered at the search conducted in the JMB Group of Companies including M/s JMD Building Material Suppliers and without confronting such material to the assessee, it is not open for the authorities to use such material against the assessee. For these reasons, learned AR prayed to quash reopening proceedings. 7. Per contra, it is the argument of the learned DR that it is not a case of pr....
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....ed 15.10.2008 assessing the income of the assessee at Rs. 54.16 crores as against the returned income of Rs. 54.14 crores by adding a sum of Rs. 1,33,219/- u/s 14A of the Act. Search took place in the business premises of Ms DS Construction group on 28.8.2013. Learned AR submitted that appropriate steps were taken for the block assessment for the years between 2007-08 to 2012-13 and then particular assessment year 2006-07 is beyond such period of 6 years. As such, the revenue resorted to reopen the same u/s 147 of the Act by issuing notice dated 28.3.2013. According to the learned AR under proviso to Section 147, where an assessment was made u/s 143(3) of the Act, no action shall be proposed to be taken u/s 147 after expiry of four years from the end of the relevant assessment year unless any income chargeable to tax has escaped assessment by reason of failure to furnish the return or to disclose fully and truly all material facts necessary for the assessment and this particular proviso is violated in the present case. As stated above, he placed reliance on the decision of the Hon'ble Apex Court and the jurisdictional High Court. The decisions relied upon on behalf of the assessee ....
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....ooks from JMD Building Material Suppliers. During the search operation it was revealed that the firm M/s. JMD Building Material Suppliers with partners Shri Om Prakash & Shri Mohammad Abbas was executed by the DSC Group and the two partners are in fact the employees of DSC Group. The group showed huge inflated purchases from this firm at its free will and kept control on the financial transactions of the buyer and seller for diverting funds raised as loan for the purpose of building various projects. During the course of post search proceeding for the year under consideration the assessee failed to produce supporting documents viz bills and vouchers as well as khaki (a slip issued by the local authority for extraction of boulders from mines) as requisitioned for, to the tune of Rs. 3,94,03,687/-. After thorough Investigation in this case, which included recording of statements of many persons including villagers by the Investigation Wing it can be concluded that a sum of Rs. 3,94,03,687/- has escaped assessment on the above aspect The assessee during the F.Y. 2005-2006 relevant to A.Y. 2006-2007 has claimed purchases of Rs. 8,79,55,3687- from M/s. Aggarwal Iron & Steel Company.....
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....ce u/s 148 of the Act and subsequently, under section 143(2) of the Act with a hope that some material could be secured when rowing enquiries made. All these purchases, sales etc. were available before the learned AO when the proceedings u/s 143(3) of the Act was taken. It is not the case of securing any new material against the assessee or a case of assessee not furnishing the material facts either fully or truly. 14. The Hon'ble Delhi High Court in the case of Haryana Acrylic Manufacutring Co. vs CIT, 308 ITR 38 (Del) has opined as under:- "In the reasons supplied to the petitioner, there is no whisper, what to speak of any allegation, that the petitioner had failed to disclose fully and truly all material facts necessary for assessment and that because of this failure there has been an escapement of income chargeable to tax. Merely having a reason to believe that income had escaped assessment is not sufficient to reopen assessments beyond the four year period indicated above. The escapement of income from assessment must also be occasioned by the failure on the part of the assessee to disclose material facts, fully and truly. This a necessary condition for overcoming the ....