TaxTMI 
TaxTMI 
2019 (4) TMI 1040
X X X X Extracts X X X X
X X X X Extracts X X X X
....13 - through orders dated 31.03.2018. In both the cases, the assessments were originally completed under Section 143(3) of the Income Tax Act, 1961 [hereafter "the Act"]. 2. The petitioner is a subsidiary of M/s. Century Metal Recycling Private Limited [hereafter "CMR"]. A survey was taken of CMR on 26.03.2015. The survey report led to the issuance of the reassessment notices in the present case. The rationale for the reassessment in both the cases is identical. The extract of one of the "reasons to believe" involved - for AY 2012-13 is as follows: "2.3 During the course of survey operation, it has been observed that CMR purchase their maximum raw material from its subsidiary company M/s. Sanjivani Non Ferrous Trading Pvt. Ltd. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....XXXXX XXXXXX 5. Findings of the A.O: In the light of above discussion, it is apparent that the assessee company has made bogus sales amounting to Rs. 5,97,36,46,243/- crore to it associate concern M/s CMR which is apparent from the discussion in above paras. On perusal of the ITR filed by the assessee it has been observed that against the total sales of Rs. 5,97,36,46,243 the assessee has declared net profit of Rs. 33,12,137 (0.05%). As the assessee has indulged in the activity of bogus sales taking the NP. rate to be 1.5 of the sales the income escaping assessment, would be Rs. 8,96,04,693 (1.5% of sales turnover of Rs. 5,97,36,46,243). The case of the company is squarely covered under explanation 1 of section 147 of I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s dated 05.03.2014 and 31.03.2014. Both these orders were concededly made under Section 143(3) of the Act. It is contended that the Revenue's reasoning virtually amounts to a second opinion or review of the final scrutiny assessment for both years. Learned counsel emphasises that what materials were gone into by the AO were borne from documents produced along with the writ petitions, which includes copies of the invoices and other supporting documents to substantiate the petitioner's claim for valid sale to CMR. Learned counsel highlighted that the goods were procured on a wholesale basis, cleared by the petitioner and thereafter sold to CMR, its group company. It was also submitted that the invoices which were allegedly raised were undoubt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er unless tangible material is available, i.e. outside of the record or unless that official becomes aware that material facts were withheld in the course of the original assessment. In Ms. Phool Chand Bajrang Lal and Anr. v. Income Tax Officer and Anr. 1993 (4) SCC 77, the question as to the bonafides disclosed or materials brought on record in the concluded assessment was in issue. The Supreme Court held as follows: "25. From a combined review of the judgments of this Court, it follows that an Income-tax Officer acquires jurisdiction to reopen assessment under Section 147(a) read with Section 148 of the Income Tax 1961 only if on the basis of specific, reliable and relevant information coming to his possession subsequently, he ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Income-tax Officer at the time of making the original assessment could or, could not have found by further enquiry or investigation, whether the transaction was genuine or not, if one the basis of subsequent information, the Income-tax Officer arrives at a conclusion, after satisfying the twin conditions prescribed in Section 147(a) of the Act, that the assessee had not made a full and true disclosure of the material facts at the time of original assessment and therefore income chargeable to tax had escaped assessment. The High Courts which have interpreted Burlop Dealer's case (Supra) as laying down law to the contrary fell in error and did not appreciate the import of that judgment correctly." 6. In the present case, the materi....