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2020 (9) TMI 272

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....f appeal that the re-assessment is liable to be quashed on the ground that the statutory notice u/s. 143(2) was not served on the assessee. 2. That the Hon'ble CIT (A]-5 has erred in rejecting the additional ground of appeal that the addition has been made by the AO without rejecting the books of account u/s. 145(3) of the Income Tax Act, 1961. 3. That the Hon'ble CIT (A)-5 has erred in confirming the addition of Rs. 128996/- on account of G.P. on so called Bogus Purchases for Rs. 2149920/- and further enhancing the addition to Rs. 2149920/-, which is against the law and facts. 4. That the Hon'ble CIT(A)-5 has erred in dismissing the plea of the assessee for quashing the reopening of assessment under section 147 of the Income Tax Act, 1961. 5. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 5. Ground No. 1 : The assessee vide ground No. 1 has contested the validity of the assessment framed u/s. 143(3) read with section 147 of the Income Tax Act, 1961 on the ground that statutory notice u/s. 143(2) was not issued or served upon the assessee. The Ld. Counsel in this respect has placed relia....

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.... 143(2) after filing the return pursuant to a notice issued u/s 148 of the Act, was fatal to the order of re-assessment. Hon'ble Delhi High Court in the case of PCIT vs. Silver Line & ANR. Held; in para 23, that a re- assessment order cannot be passed without compliance with the mandatory requirement of notice being issued by the AO to the assessee under section u/s 143(2) of the Act - Hon'ble Madras High Court in the case of Sapthagiri Finance & Investments vs. ITO held; in para no.13 i.e. we are of the view that in completing the assessment under section 148 of the Act, compliance of the procedure laid down under sections 142 and 143(2) is mandatory. Hon'ble P&H High Court in the case of CIT vs. Cebon India Ltd. Held; in para no.5, Absence of notice cannot be held to be curable under S.292BB of the Act. Hon'ble ITAT Chandigarh in the case of Sanjeev Aggarwal vs. DCIT Held; in para 10 last lines i.e. We hereby quash the order of the Assessing officer, which was made without issue of notice u/s & 143(2) of the Act.   8. The Ld. DR, on the other hand, has relied upon the provisions of section 292BB of the Act to submit that if the assessee has not raised any o....

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.... department. It is only the infirmities in the manner of service of notice that the Section seeks to cure. The Section is not intended to cure complete absence of notice itself. 10. Since the facts on record are clear that no notice under section 143(2) of the Act was ever issued by the Department, the findings rendered by the High Court and the Tribunal and the conclusion arrived at were correct. We, therefore, see no reason to take a different view in the matter." The Hon'ble Supreme Court, thus, has categorically held that section 292BB is not indeed to cure complete absence of notice itself. So far as the mandatory requirement of issue of notice u/s. 143(2) of the Act in the case of re-assessment proceeding carried out u/s. 147 of the Act is concerned, the issue has been settled by the Hon'ble Delhi High Court in the case of 'PCIT vs. Jai Shiv Shankar Traders Pvt. Ltd.' (2016) 383 ITR 448 (Delhi), wherein, the Hon'ble Delhi High Court held that the failure of the Assessing Officer to issue a notice to the assessee u/s. 143(2) of the Act subsequent to the filing of the return pursuant to the notice issued u/s. 148 of the Act is fatal of the order of the re....

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.... in respect of the purchases from Nazar Impex were accepted by the Revenue, thus the purchases can not be disallowed without rejecting books of accounts in the case of trading concern. 3. That the Hon'ble CIT (A)-5 has erred in confirming the addition of Rs. 128996/- on account of G.P. on so called Bogus Purchases for Rs. 2149920/-  and further   enhancing There is no other adverse finding except information from investigation wing. Para 4.2, 8th line from below of page 13 of CIT(A)'s order; Since the items do not have specific identity number, hence it cannot be -Bogus purchases not established by the AO. -PB folio 42; if purchase of diamonds excluded from purchases as well as stock in trade, it results to loss of Rs. 20,16,844/-, cannot be said that assessee made efforts to reduce the profit. - Hon'ble Apex Court in the case of the addition to Rs. 2149920/-, which is against the law and facts.   verified whether the diamonds shown  as purchased from Nazar Impex were included in the stock and only those particular items have been sold and included in sales declared by the assessee.  Para 4.2,19;h line from top of the page no.14; As....

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....ided the complete particulars of Purchases, Sales, Item wise quantitative details, Stock Register, Trading account of diamond, Date wise movement of diamonds etc. Ld. AO. also had verified the same. Confirmation from the party is on record. Even on the date of search i.e. 14.03.2012 physical stock summary had prepared and there was negligible difference in stock of diamonds, as per books of accounts. Which also had duly surrendered and tax already paid on the same. Please find enclosed the following documents in support of our submissions, which are already given during the assessment proceedings and are on record:- (i) Detail enclosed with reply dt 12.09.2013. (ii) Diamond Purchase Ledger. (iii) Diamond Sale Ledger. (iv) Diamond Trading A/c. (v) Diamond Stock Register. (vi) Valuation report dt. 14.03.2012. 15. A perusal of the above details along with documents attached with the paper book reveals that the assessee has submitted the complete particulars of purchase/sales, item-wise quantitative details, stock register, trading account of diamond and date wise movement of diamond. The details noted above were also submitted during the reassessment proceedings. From the....

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....n'ble CIT (A)-5 has erred in rejecting the additional ground of appeal that the addition has been made by the AO without rejecting the books of account u/s. 145(3) of the Income Tax Act, 1961. 3. That the Hon'ble CIT (A)-5 has erred in confirming the addition of Rs. 116610/- on account of bogus purchases for Rs. 1943495/- and further enhancing the addition to Rs. 1943495/-, which is against the law and facts. 4. That the Hon'ble CIT (A)-5 has erred in dismissing the plea of the assessee for quashing the reopening of assessment under section 147 of the Income Tax Act, 1961. 5. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. ITA No. 399/Chd/2019 (A.Y. 2010-11):- 1. That the Hon'ble CIT (A)-5 has erred in rejecting the additional ground of appeal that the reassessment is liable to be quashed on the ground that the statutory notice u/s. 143(2) was not served on the assessee. 2. That the Hon'ble CIT (A)-5 has erred in rejecting the additional ground of appeal that the addition has been made by the AO without rejecting the books of account u/s. 145(3) of the Income Tax Act, 1961. 3.....