2022 (2) TMI 316

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....,977/- on account of alleged unexplained expenditure u/s 69 of the Act, 1961." 2. Brief facts of the case are that during the course of proceedings under section 263 for assessment year (AY) 2005-06, it was revealed that the assessee company has made purchases for non-existing parties for the assessment year under consideration (AY 2007-08). On the basis of such information the AO recorded the reasons for reopening for this assessment year. The AO recorded the following reasons; "During the course of proceedings u/s 263 of the I.T.Act, 1961 for the AY 2005-06 on field inquiry, it is found that the assessee-company has made purchases from non-existing parties;' namely- i) Engineering Corporation ii) Kailash Corporation iii) Abhishek Roadlines iv) Forward Builders & Contractors 2. Details of purchases made from the above parties during the A.Y 2007-08 are as under:- i) Engineering Corporation Rs. 19,65,900/- ii) Kailash Corportion Rs. 43,08,329/- iii) Abhishek Roadlines Rs. 8,25,703/- iv) Forward Builders & Contractors Rs. 17,70,045/-   Total Rs. 1,68,69,677/- In these circumstances, the transactions made with the above parties are non-genu....

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....R) and have gone through the orders of authorities below. The Ld. AR of the assessee submits that action under section 263 of the Act was initiated in assessment year 2005-06. The order of Ld. PCIT dated 30.03.2014 was challenged by the assessee before Tribunal. The order passed by ld PCIT passed under section 263 dated 30.03.2014, has been quashed by Tribunal in ITA No.236/AHD/2014 dated 08.03.2021. The Ld. AR of the assessee submits that order of Tribunal is placed on record. The Ld. AR of the assessee further submits that there is no direction in the order of Ld. PCIT under section 263 of the Act for re-opening of assessment for 2007-08.The Ld. AR of the assessee submits that order under section 263dated 30.03.2014 for assessment year 2005-06 is also placed on record. As there was no direction while making inquiry in the proceedings under section 263 for AY 2005-06, therefore, the reopening made by the AO is without any authority. 6. It was submitted that reopening of assessment under section 147 was based on the order passed by ld PCIT under section 263, for A.Y. 2005-06, which has been set aside/ quashed by Tribunal, therefore, the reopening which is in question for the year ....

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....ries of India (2009) 2 taxmann.com 73 (P&H), * CIT Vs Kelvinator India (2010) TAXMAN 312-SC, * Shree ChalthanVibhagKhand Vs DCIT (2015) taxmann.com 450(Guj), * General Motors India (P) ltd Vs DCIT (2014) 46 taxmann.com 399(Guj), * DCIT Vs Narender Mohan Bagroy (2004) 90 ITD 90 (Patna)(TM). 9. On merit the ld. AR for the assessee submits that the assessee furnished complete details alongwith return of income filed under section 139(1). All the record of expenses of purchases was available with the AO. The AO has not rejected the books of the assessee. No comment was made by the AO on various documentary evidence, which were available before him. No disallowances of purchases can be made without rejecting the books of account. The AO observed that the parties were not available at the given address. No independent investigation was carried out by the A.O. The A.O. solely relied on the alleged report of inspector in the proceedings under section 263 for A.Y. 2005-06. The ld. AR submits that the inspector allegedly visited after a gap 8-10 years, if the parties are not found at the given address, the purchases of assessee cannot be doubted as the parties may have shifted from ....

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....en quashed by the Tribunal in order dated 08.03.2021 in ITA No.236/AHD/2014. 12. The Hon'ble Delhi High Court in CIT Vs International Tractor Ltd (supra) held the reopening of the assessment under section 147 was only on account of the orders passed by Commissioner under section 263 and on other reasons and the High Court held that there was no justification for Commissioner to have invoked section 263, the reopening under section 147, was not justified. 13. We also find reasonable force in the submissions of the ld. AR for the assessee that while recording the reasons for reopening the AO recorded clearly shows that all information with regards to expenses of purchases was already available on record. We find that the AO recorded the exact aggregate amount of the purchases shown from all the four parties, which clearly established that the assessee has already filed all the details of expenses, which were already on record, therefore, no fresh material has came to the notice of the AO, thus, it was amounts to change of opinion on same evidence available on record. We further find that admittedly notice under section 148 was issued after expiry of four year from the end of releva....