TaxTMI 
TaxTMI 
2019 (8) TMI 444
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...., the Ld, CIT (A) erred in applying 12.50% of the Purchases of Rs. 1,81,69,414/- as alleged bogus purchase, without appreciating the fact that the payment was made through cross account payee cheque and the same goods were subsequently sold and quantity is tallied. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) failed to notice that the Shri Rajendra jain has retracted the statement given on 03.10.2010 and 05.12.2013 and the appellant has submitted the same before the Ld. CIT (A), however the Ld- CIT (A) failed to notice the same and slated that the subsequent statement given by the Rajendra Jain on 05.12.2013 has not been retracted. 4. The appellant craves leave to add, alter or delete all or modify any or all the above grounds of appeal. 3. The revenue has raised following grounds of appeal 1(a) "Whether on the facts and in circumstances of the case and in tow, the Ld.CIT(A)erred in directing the Assessing Officer to work out 12.50% of the so called bogus purchases made from four parties and add back the same to the taxable income in place of the addition of Rs. 1,81,69,414/- made u/s.69C by working out the peak credit. ?" 1(b) "Whether ....
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....rify the genuineness of purchases claims to have made from certain parties, issued 133(6) notices to all parties. In response, all parties have furnished. The information called for by the AO, including ledger extracts, confirmation of transactions, income tax returns filed copy and bank statements. The Ld. AO, after considering the relevant submissions of the assessee and also taken note of statement of Shri Rajendra S.Jain and Surendra Jain came to the conclusion that although, the assessee had filed basic evidences to prove purchases, but failed to file further evidences in the back drop of clear findings by the Sales Tax department, during search conducted in the case of Rajendra S.Jain that the assessee is one of the beneficiary of accommodation entries of bogus purchases from four parties controlled and operated by Rajendra S.Jain amounting to Rs. 1,81,69,414/- and accordingly, made additions u/s 69C of the I.T.Act, 1961, as unexplained expenditure. 5. Aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee has challenged reopening of assessment, on the ground that the AO has reopened assessment, after period of....
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....enue is in appeal before us. 6. The first issue that came up for our consideration from the assessee's appeal from ground No.1 is validity of reopening of the assessment. The Ld. AR for the assessee submitted that, the AO was incorrect in reopening of assessment, after a period of four years from the end of the relevant financial year without any allegation in the reasons regarded for reopening of the assessment that there is a failure on the part of assessee to disclose fully and truly, all material facts necessary for assessment. The Ld. AR, further submitted that as per the provision of section 147(b), if an assessment is reopened after a period of four years and the original assessment was completed u/s 143(3) of the I.T.Act, 1961, then, before reopening of assessment, the AO should allege that income chargeable tax has escaped assessment, for such assessment year by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for that assessment year. In this case, if you go through reasons recorded for reopening of the assessment, there is no iota of evidence in the reasons recorded by the AO that, there is a allegation from the ....
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....the assessee to disclose fully and truly all material facts necessary for assessment. Therefore, there is no merit in the arguments of the assessee that, assessment cannot be reopened after four years from the end of relevant assessment year without any allegations in the notice. The Ld. DR, further submitted that in respect of addition made by the AO towards alleged bogus purchases, although the Ld. AO has brought out various reasons to come to conclusion that purchases from those parties are bogus, which are not supported by necessary evidences, but Ld. CIT(A) has altogether taken a different view and estimated 12.5% profit without assigning any reason. Therefore, the findings given by the Ld.CIT(A) is contrary to facts brought on record and accordingly, the additions made by the AO towards alleged bogus purchases should be upheld. 8. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. The assessee has challenged reopening of assessment, on the ground that when assessment has been reopened after four years from the end of relevant assessment year, the proviso of section 147 of the I.T.Act, 1961, comes into op....
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....s is one of the jurisdictional requirements for reopening of assessment, after a period of four years and once this was not the basis for issuance of notice for assessment, it cannot be held against the assessee that it had failed to make a true and full disclosure. Further, it will have to be held that the assesse did not failed to make full and true disclosure of all material facts, the jurisdictional requirements for carrying out for the reassessment, after the expire of four years was not fulfilled in the instant case. In this case, on perusal of reasons recorded by the AO ,we find that there is no iota of observations from the AO regarding failure, on the part of assessee to fully and truly disclose all material facts necessary for assessment. On the other hand, the assesee has filed various details to prove that the information regarding purchase from certain parties was already disclosed to the AO in original assessment proceedings u/s 143 (3) of the I.T.Act, 1961, where in response to query, the assesee has filed complete details about purchase. Therefore, we are of the considered view that reopening of assessment after four years from the end of relevant assessment year wi....