TaxTMI 
TaxTMI 
2024 (11) TMI 758
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....C of the Act by not appreciating the Judgement of the Hon'ble Supreme Court in the case of N.K. Proteins Ltd. Vs DCIT (2017) 84 taxmann.com 195 (SC in which the Hon'ble Apex Court has dismissed the SLP of the assessee against the decision of the Gujarat High Court [N.K.Industries Ltd.v DCIT (2016) 72 Taxmann.Com 289 (Gujarat) wherein 100% of the bogus p0urchases were added to the total income of the assessee. 2) The Ld. CIT(A) has erred in limiting the addition only to the extent of 25% of bogus purchases as against 100% made by the AO through he himself arrived at the conclusion that the alleged bogus purchases are bogus purchase and not inflated purchases and taxing only 25% of these bogus purchases goes against the principles of Section 68,69A and 69C of the Income Tax Act. The Ld. CIT(A) has erred in limiting the addition only to the extent of 25% of bogus purchases by arriving at the conclusion that since the corresponding sales have been accepted and so entire alleged purchases cannot be disallowed by not taking into consideration the business type of the assessee. The corresponding sales cannot be doubted in case of a pure trading firm but the assessee firm....
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.... assessment proceedings. As such, addition upheld at Rs. 4,29,39,587/- is illegal, unjustified and uncalled for. The same be deleted. 5. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred by upholding the decision of the A.O. regarding alleged bogus purchases of Rs. 17,17,58,348/- against reported by the Investigation Wing at Rs. 10,29,40,198/- communicated in the reasons recorded u/s 148 of the Act by the A.O. Therefore, the notice issued on mis-stated facts is unjustified, uncalled for and addition made in response to such notice is illegal. The same be deleted. 6. On the facts and circumstances of the case as well as in law, the Learned CIT(A) has erred by upholding the findings of the A.O. that the alleged purchases made from Hitesh Industries and Akansha Enterprises are bogus without appreciating that the sales could not be made in the absence of purchases whereas sales are not in dispute especially when the purchases of Rs. 17,17,58,348/- made from Hitesh Industries and AkanshaEnterprises are ultimately used in the construction of Talwandi Sabo Thermal Plant. Therefore, the addition 7. On the facts and circums....
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....on of the AO was that, as per information received from the ADIT Investigation, the assessee had made bogus purchases, through two parties (sellers) amounting to Rs. 10,29,40,198/- during the year under consideration and on the basis of said information, the AO has formed reason to believe that the income to the tune of Rs. 10,29,40,198/- has escaped assessment and, for which, notice u/s 148, was issued to the assessee. 7. The assessee intimated the Assessing Officer that the return as originally filed u/s 139(1), may be treated as having been filed in response to notice u/s 148 and copy of the recorded reasons was also obtained and in course of proceedings detailed questionnaire was issued by the AO and the assessee responded through written submissions and explanations along with copies of ledger accounts of the purchases as made from the above two parties, namely, M/s. Hitesh Industries and M/s. Akansha Enterprises, (as per assessee books of accounts), supported by VAT-23 and VAT-24 returns, and copies of the purchase bills, invoices, bank records, and other evidences explaining and demonstrating that all payments has been made, through banking channels. It was further stated....
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....e addition of Rs. 17,17,58,348/- on the legal issue of section 148 beyond four years and also on account of bogus purchase, and the Ld. first appellate authority, after considering the submissions and written arguments of the assessee, sustained the addition to 25% (twenty five percentage) of the alleged bogus purchase and deleted the balance 75% (seventy five percentage) due to reasons contained in the appellate order paragraph 4.17, which is reproduced for easy reference: Observation of CIT (A ) : "4.17 Now, to deal with the objection that when sales are not doubted then how purchase alone can be treated as bogus. The Ld. AO while dealing with the issue has relied upon the decision in the case of N.K. Proteins Ltd. Vs DCIT, 84 taxmann.com 195. The Hon'ble Supreme Court dismissed the SLP filed by the appellant and thus confirmed the addition of 25% held by the ITAT and not in contrary to said decision. The ratio and fact of the case is similar to the case in hand. However, while concluding the case he held that the purchases of Rs. 3,21,49,587/- from M/s Hitesh Industries, Sunam and purchases of Rs. 13,96,08,761/- from M/s Akanksha Enterprises are bogus and conside....
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....transactions with M/s Akansha Enterprises and relied upon the copy of the account of both the parties and also the invoices, which have been placed on record. It was also argued that the payment in respect of all the purchases to both the parties have been made through banking channel. 13. The Ld. CIT(A), gave his finding in para 4.3 of his order page 4 and 5, and held that the appellant could not demonstrate with any evidence that the issue of bogus purchase was examined during original assessment proceedings and hence, held the reopening u/s 148 of the Act 61, as valid and dismissed the ground of appeal of the assessee. 14. Regarding the addition of Rs. 17,17,58,348/-, it was stated by the CIT(A) in his order that no confirmed copy of account of two parties have been filed and also stated that the statement of Sh. Rajinder Kumar Prop. Hitesh Industries is on record, in which, he has denied making any purchases & sales and further as and when, the payments have been made by the assessee to M/s. Hitesh Industries and M/s. Akansha Enterprises, the amount have been withdrawn immediately by cash by the supplier and the assessee has failed to establish the genuineness of such pur....
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....in questioner relating to details of purchase made above Rs. 50,000/- were asked along with other details relating to assessee business as per copy of the questionnaire placed in Paper Book at pages 15 to 19. It was replied by the assessee along with complete details in the form of list of parties, from whom purchases exceeding Rs. 50,000 were made along with copies of ledger account of the parties. The reply filed by the assessee along with relevant details is forming part of paper book from Pgs. 20-32 and details of the purchases is at page 22, where the names of two parties exist alongwith copies of account of both the disputed parties. 2. Thereafter, assessment order u/s 143(3) of the Act was passed dated 24.03.2014 as per copy of original assessment order forming part of PB at pages 33-38 and refer to page 33 of the Paper Book where the Assessing Officer has mentioned as under:- "Also produced books of account consisting of cash book, ledger, bill/vouchers, purchase/sale bills, which were examined on test c heck basis. Information/details as called for were furnished and the same are also test checked. The case was discussed with him." Thus, the Asse....
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....of M/s Hitesh Industries, funds to the tune of Rs. 2,06,50,000/- have been paid by us and whereas as per copy of account available as per record during the course of original assessment proceedings placed at pages 51 to 52 of PB, the total payment of Rs. 2,26,45,000/- has been made during this year to the said party. 6. From the above said facts, the recording of factually wrong reason cannot be a ground for reopening of the case u/s 148 and whereas on the other hand, the Assessing Officer had made an addition of bogus purchases to the tune of Rs. 17,17,58,348/-. 7. It is a settled law that if the wrong reasons have been recorded, then there cannot be valid reopening and for that, reliance is being placed on the judgment of Hon'ble Amritsar Bench of the ITAT in the case of Sh. Darshan Garg, copy placed at pages 34 to 44 of JS, and also on the recent Judgement of 'Kissan Fats' of the Chandigarh Bench of the ITAT, placed at pages 45 to 59 of Judgement Set and M/s Atlas Cycle Industries, as reported in 180 ITR 319, P&H High Court, placed at pages 66 to 70 in which, it has held has under:- "9. Adverting to the question referred regarding the reassessment proc....
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....ts has found these bills to be relating to purchase of fixed assets and has accordingly, made the disallowance of only depreciation relating to the same, which has not been challenged by the Revenue before us. I t is clearly evident that on receiving information from the Commercial Tax Department, the ld. AO did not even care to verify the same from his records from where al l these factual inaccuracies would have been brought out. There was clearly total non-application of mind by the AO and the belief of escapement of income is definitely not his own but borrowed from that of the commercial tax officer who had forwarded the information. The basic requirement of law for reopening an assessment is application of mind by the AO to the material or information in his possession to conclude and arrive at a satisfaction therefrom that income has escaped assessment. Both application of mind and sat is faction /belief of the AO are lacking in the present case. The reassessment therefore we hold is invalid. The case laws relied upon by the Ld. Counsel for the assessee support the case of the assessee, The order passed by the AO is, therefore, set aside." Therefore, the re....
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....e exercise of re-opening of the case is based upon the information from the Investigation Wing and there is no application of mind by the AO. f) Reliance is being placed on the following judgments wherein it has been held that the 148 proceedings are bad in law in case, the reasons recorded are based upon borrowed satisfaction and the re-opening is purely based upon reasons to suspect: i) CIT vs Meenakshi Overseas Ltd. as reported in 395 ITR 677 ( Page 1 to 12 of Judgement Set) ii) PCIT vs G G Pharma India Ltd. as reported in 384 ITR 147 ( Page 13 to 18 of Judgement Set) iii) M/s Holy Faith International Pvt Ltd. Vs DCIT in ITA No. 181/Asr/2017 order dated 15.01.2019 (Page 19 to 33 of Judgement Set) iv) M/s. Supertech Forgings (India)Pvt Ltd. vs DCIT in ITA No. 563/Asr/2018 order dated 25.08.2021. (Page 71 to 105 of Judgement Set) Further the appeal of the department has even been dismissed by the Hon'ble Punjab & Haryana HC vide order dated 05.09.2023 in 1TA-101-2022 (O&M).Placed at pages 106 to 110. 1. As regards the reason recorded, nothing has been brought on record by the revenue that the A.O has applied his mi....
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....Industries and M/s Akansha Enterprises and further, there is complete contradiction in the reasons, because in the first paragraph at page 42, it has been mentioned about bogus purchases of Rs. 10,29,40,198/- then below page 42, it has been mentioned that M/s Hitesh Industries had received fund of Rs. 2,06,50,000/ - and further in respect of other party namely M/s Akansha Enterprises, the total fund received by M/s Akansha Enterprises is to the tune of Rs. 8,22,90,198/- against purchases and then, again, it has been mentioned at page 44 in paragraph-2, that there are bogus purchases made from 'M/s Akansha Enterprises' to the tune of Rs. 8,22,90,198/- and, thus, there is no nexus between the alleged material before the Assessing Officer and the reason to believe. Reliance is being placed on the judgment of Lakhmi Mewal Dass, reported in 103 ITR 437, wherein, it has been held that there should be live link or close nexus between the material before the ITO and the believe which he has to form regarding the statement of income and in the present case both of them are missing. 13. Assessee argument on CHANGE OF OPINION The assessment was completed u/s 143(3) vide orde....
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.... of belief that the income of the assessee has escaped assessment because of the failure on the part of the assessee. 16. Your goodself's attention is invited to the fact that the notice u/s 148 was issued on 28,.03.2018 and the assessment year involved is assessment year 2011-12 and, thus, the assessment is sought to be reopened after four years and, therefore, the Assessing Officer was obliged to examine the information received in the context of the facts on record. If such an exercise were to be done, it is likely that the Assessing Officer would have come to the conclusion that there was no failure to disclose truly and fully all material facts necessary for assessment. The entire proceedings in this case would also be hit by proviso to section 147 which bars any reopening after the expiry of four years where assessment under section 143(3) has been completed unless there was failure to truly and fully disclose material facts. The relevant text of the section if being produced hereunder: - Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this s....
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....ears was bad in law - Whether SLP filed by revenue against said impugned order was to be dismissed - Held, yes [Para 4] [In favour of assessee] b) [2021] 133 taxmann.com 122 (SC) SUPREME COURT OF INDIA ACIT, Circle 12(3)(2) v. Marico Ltd Section 148, read with sections 80-IB and 80-IC, of the Income-tax Act, 1961 - Income escaping assessment - Issue of notice for (Reassessment) - Assessment year 2011-12 - Assessing Officer issued reopening notice on grounds that assessee was allowed excess deductions under section 80-IB and section 80-IC - High court by impugned order held that since Assessing Office was acting solely on basis of information and material already on record in original assessment, impugned reopening notice issued beyond period of four years was unjustified - An instant special leave petition was filed by revenue against said order passed by High Court - Whether SLP was to be dismissed against said impugned order of High Court - Held, yes [Para 2] [In favour of assessee] c) [2015] 59 taxmann.com 391 (Punjab & Haryana) HIGH COURT OF PUNJAB & HARYANA State Bank of Patiala v. Commissioner of Income-tax* Section 32, read with section 14....
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....elevant assessment year, proviso to section 147 would apply inasmuch as reassessment was not permissible unless there had been failure to truly and fully disclose necessary facts required for assessment - Held, yes - Whether, therefore, impugned reopening notice issued after four years was to be quashed - Held, yes [Paras 5 and 9] [In favour of assessee]INCOME TAX : Where AO issued a reopening notice on ground that assessee had debited certain expenditures such as such as delayed remittance of employees contribution to EPF on one occasion, consultancy for project, registrar and share transfer agent fees, etc. which were not allowable as per different provisions under Income Tax Act, since there was not even allegation in reasons recorded for reopening that there was any failure on part of assessee to fully and truly disclose all material facts necessary for assessment, impugned reopening notice issued after four years was to be quashed f) [2022] 139 taxmann.com 245 (Bombay)[27-04-2022] Section 69, read with section 147, of the Income-tax Act, 1961 - Unexplained investments (Shares) - Assessment year 2013-14 - Assessment was sought to be reopened in case of assesse....
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.... escaping assessment - General - Assessment year 2002-03 - Where assessee's claim for expenditure at 30 per cent of professional receipts in revised return of income which was later withdrawn was subject matter of consideration of Assessing Officer at time of passing original assessment order, Assessing Officer could not reopen assessment on ground that income representing said expenditure had escaped assessment [In favour of assessee] Held that there was no fresh tangible material before the Assessing Officer to reach a reasonable belief that the income liable to tax had escaped assessment. The order passed originally under section 143(3) was passed after the assessee had made ad hoc claim for expenditure at 30 per cent of the processional receipts in the revised return of income which was later withdrawn. In fact the reason for reopening the assessment for the year 2002-03 itself recorded that the claim of 30 per cent ad hoc expenses was withdrawn when the assessee was asked to substantiate the claim. Therefore, the same material was a subject-matter of consideration during the proceedings for original assessment. In the circumstances, there could be no basis for the....
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....ns 147 and 148, of the Income-tax Act, 1961 - Income from other sources - Chargeable as - Assessee a private limited company and sole trustee of APT, a private discretionary trust, received shares of 'W' from settlor firms as gift, to be held as corpus of APT - This was disclosed to stock exchanges as well as in audited financial statements of APT, and assessee's returned income was accepted in scrutiny assessment - Thereafter, on 31-3-2021 i.e., beyond stipulated period of four years from end of assessment year 2013-14, impugned notice under section 148 was issued to assessee alleging escapement of income - Reasons recorded for reopening stated that though number of shares of 'W' received as a gift were disclosed, but neither book value nor market value of shares was disclosed in balance sheet - Assessee challenged impugned notice as being illegal and arbitrary - Whether as long as all material facts necessary for assessment were disclosed and market value of share was clearly discernible from returns and documents, revenue could not take shelter under proviso to section 147 just because market value of shares was not separately stated or mentioned - Held, yes ....
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....validly disclose material facts necessary for assessment - Whether in said circumstances, Tribunal was fully justified in re-appreciating fact and coming to conclusion that reopening of assessment was bad in law - Held, yes [Para 5] [In favour of assessee ]INCOME TAX : Where Assessing Officer reopened assessment for relevant year for reasons that provisions of VAT was not allowable expenditure and should be added back to income of assessee, since in reasons recorded there was no allegation of failure on part of assessee to truly and fully disclose material facts and materials already available in books of account had only been re-apprised by Assessing Officer in said circumstances, reopening of assessment was bad in law l) [2023] 151 taxmann.com 411 (SC) SUPREME COURT OF INDIA Assistant Commissioner of Income-tax v. Virbac Animal Health India (P.) Ltd. Section 37(1), read with section 148, of the Income-tax Act, 1961 - Business expenditure - Allowability of (Sales promotion/freebees) - Assessment year 2014-15 - Assessee company, engaged in business of marketing of animal health products, filed its return of income which was scrutinized and an assessment o....
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.... vi) Copy of account of M/s. AVM Construction Co. depicting purchase made from assessee and copy of account of the contractor to whom further sales have been made by the M/s. AVM Construction Co. (Pg 54-82 of PB) vii) Chart showing purchases made from Akansha Enterprises and Hitesh Industries by M/s Aggarwal Construction Co. (the assessee appellant firm) and same sold material sold to AVM Construction Company and AVM Construction Company sold the same material to various contractors who used it for consumption in construction of Thermal Plant. (Pg 83-85 of PB) viii) Vat-23 and 24 returns of assessee proving, proving that the purchases and sales by the assessee (Pg 90-104 of PB) ix) Vat-23 and 24 returns of AVM Constructions proving goods purchased from assessee and its further sale to other parties (Pg 105-112 of PB). x) Annual summary of VAT Transaction of Akansha Enterprises depicting sales made to assessee (Pg 90-104 of PB). xi) Copy of audit report of AVM construction (Pg 113 of PB) 20. The assessing officer by rejecting all above documents filed by the assessee passed the assessment order u/s 147 dated 19.12.2018 wherein ad....
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....rom copy of 142(1) on 26.09.2013. The reasons for not providing the transportation bills during the course of appellate proceedings was that the premises of the assessee where books of the assessee was stored was declared NPA and seized by the bank, therefore due to long period of time the details is not accessible to be proved. However, in respect of the allegation of the Ld. CIT(A) that the assessee has not explained the details of premises, where the goods were stored after receipt from vendor and no details of rent paid or addresses of godown has been provided, In this regard, it is submitted that the material purchased by the assessee from parties namely M/s Akansha Enterprises and M/s Hitesh Industries were mainly directly sold to M/s. AVM construction on same dated of purchase made from the said parties, whereas in case of purchase made on different dates and sales made on different dated the assessee use to mainly stored that material in vacant land he owned and due to need of large vacant are during the year under consideration the assessee has purchased an another land, duly declared in the block of Fixed Assets under head of Land amounts to Rs. 22,35,000/- as ev....
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....their respective bank accounts, it is submitted that it's not duty of the assessee to check what the suppliers are doing with the payments made to them neither nobody shares such data with any others. Further, the inter party relation between the owners of M/s. Akansha Enterprises M/s Hitesh Industries or any common link between the two parties is not a valid reasons to make disallowance of purchases and therefore, the said observation of the AO and CIT(A) is baseless and incorrect. The fact to be noted is that the assessee has no personal relation with the both the parties from whom purchase being made. However, the assessee during the year under consideration was having an extreme demand of material from M/s. AVM Construction Co. for construction of "Talwandi Sabo Thermal Powerplant". As the demand of the assessee was increasing the assessee was searching for the parties who can supply new material, indeed the said firm was having the sufficient material to supply, the assessee made purchase from the above said parties by making the quality check of material that is need in the business of the assessee, not made the enquiry of the proprietor of the said firms and history of....
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....with and the finding on the merits stats from page 51 para 24 of the judgment in which following the judgment of P&H High Court in the case of Leader Walves reported at 285 ITR 435, the entire addition have been deleted. RAJESH GUPTA vs. JCIT in ITA No. 264/Chd/2010, Chandigarh Bench. SAMRAT PLYWOOD INDS. in ITA No. 595/Chd/2017. CIT vs. BHOLANATH POLY FAB PVT. LTD. as reported in 355 ITR 290 (Guj.HC) CIT vs. CENTURY PLYBOARDS (1) LTD as reported in [2019] 103 taxmann.com 179 (SC) Section 69C, read with section 263, of the Income-tax Act, 1961 - Unexplained expenditure (Bogus purchases) - After completion of assessment, Commissioner received a complaint from Director General that assessee had entered into bogus purchase transactions with one 'D' - On basis of said complaint, Commissioner passed a revisional order setting aside assessment - In appellate proceedings, Tribunal having noticed copies of invocies and challans, proof of payments, bank statements, transportation payments, vouchers for movement of goods and like documents, concluded that transactions between assessee and 'D' were not bogus or fraudulent - Accordingly, impugned revisional order....
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....prayed for sustaining the entire addition as made by the AO. 19.1 Moreover, the Ld. DR has also filed a written submission in support of her arguments and in rebuttal to the written arguments filed by the assessee, and the same is reproduced for easy reference: "1. It is brought on record that in the original assessment u/s 143(3) dated 24.03.2014, the books of account and vouchers were only verified on test checked basis. At the time of framing of the original assessment u/s 143(3), the information regarding the bogus purchases was not received by the AO. The Ld. AR here also self-admits that the books of accounts and bills were examined on test check basis. The only material the assessee had produced before the AO were bank statements and self- made bills/vouchers. As per Page 10 of the Assessment Order, no evidence of transportation of impugned goods, or details of godown where the goods were stored, their rent, etc. was ever furnished by the appellant. 2. The Ld. AR has contended that the information received from Investigation Wing of the Income Tax Department was only regarding one party namely M/s Hitesh Industries and also that the Assessing Officer did....
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....om the impugned sales have been made. 3. The arguments of the Ld. AR that the reason recorded are factually incorrect are also misleading in view of the following: a. The procedure for 148 proceedings has been defined by the Hon'ble SC in the case of GKN Driveshafts (India) Limited v. ITO (2003) 259 ITR19. The Hon'ble Supreme Court has laid down an elaborate procedure as to the manner of dealing with objections raised against a notice under section-148 of the Act. The above judgment applies equally to the assessee and the Assessing Officer. In the instant case, reasons were duly recorded by the AO which were also communicated to the assessee. However, the assessee did not raise any objection to the same before the Assessing Officer, thereby implying that the reasons recorded were acceptable to the assessee. For A.Y. 2011-12, the amount recorded in reason for reopening of the case u/s 148 of the IT Act'1961, for the impugned supplier, M/s Hitesh Industries is Rs. 2,06,50,000/- and the Ld AR is claiming that since the total amount transferred to the bank account was Rs 2,26,45,000/-, therefore, the reasons are factually incorrect. It may be noted that th....
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....or the bank account of M/s Akanksha enterprises. Hence, it is submitted that the reasons are correctly recorded for AY 11- 12 and AY 12-13. Hence, there is no factual inaccuracy in reasons recorded. 4. It is further submitted that the assessee has never challenged or raised objections to the initiation of proceedings u/s 148 before the Assessing Officer, as required under Hon'ble Supreme Court judgment in the case of GKN Driveshafts (India) Limited v. ITO (2003) 259 ITR19. 5. The allegation made by the Ld. AR at page no. 6 of the synopsis are incorrect and self-contradictory. On one hand, the Ld. AR want to call this case as case of borrowed satisfaction and on the another hand he himself had stated that information on M/s Akanksha Enterprises was not received from Investigation wing. The reasons recorded show that the Assessing Officer has made independent enquiries and applied his mind to form an independent belief. Hence, the submission by Ld. AR are misleading and incorrect. This is not a case of borrowed satisfaction as the AO has applied his mind and recorded very elaborate reasons for initiation of proceedings u/s 148. It is not a prerequisite ....
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....rmation and details as called for was also furnished and the case was discussed. The question of self-made vouchers as alleged by the Ld. DR is not ascertainable from records. It is also seen that the assessee has explained, in course of reassessment proceedings the said invoices in original could not be produced again by the assessee because the same is within the premises, which is under lock and key, being SEIZED by the bankers for nonpayment of dues as NPA. (Non-performing Assets). (page - 6, of order dated 19/12/2018.) 21. Regarding the issue of transportation of goods and storage of goods, it has been explained by the assessee that details of transportation were filed as asked by the AO in notice u/s 142(1), dated 26/09/2013, and reply filed by the assessee (placed in PB page - 20) and regarding storage it has been explained that construction materials such as sand, stone chips, bricks, gitti, moram, etc, are all transported in open DUMPERS / TRUCKS, from point to point i.e. from the loading site to the point of unloading and these materials are not required to be unloaded and stored in between transit (because that is practically not feasible because unloading and loading....
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....As such this is a case where wrong reasons to believe has been recorded on the basis of borrowed satisfaction and without any application of mind by the concerned person, and in such cases it is not possible for the AO to arrive at a valid satisfaction. We find that the matter is covered in favour of the assessee by the decision of the jurisdictional Punjab and Haryana High court in the case of Atlas Cycle Industries 180 ITR 319 ( P & H High Court ), and also by the coordinate Bench in the case of Darshan Garg ( HUF ) vs ACIT / ITA 176/ ASR / 2017, and also M/s Kissan fats Ltd vs DCIT, ITA No 407/ Chandigarh / 2023. 22.1 Further the Ld. DR relying on the judgment of the Hon'ble Supreme court in the case of DCIT vs M. R. Shah Logistic Pvt Ltd (APPEAL (C) NO. 22921/2019) dated 28/03/2022 ), argued that, sufficiency of the materials cannot dictate the validity of the notice, and he referred to the tangible materials existing with the AO, in the form of (a) statement recorded u/s 131 of Mr Rajendra Kumar, Proprietor of M/s Hitesh Industries (PAN BSCPK5383F), (b) bank accounts maintained in OBC bank by M/s Hitesh Industries and M/s Akanksha Enterprises, (c) return of income of M/s Ak....
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....022 ( O & M ) dated 05/09/2023, ( Punjab and Haryana HC ), where in an identical set of facts where sales of the assessee has not been doubted and only a fraction of the purchase has been doubted and case reopened on the basis of information gathered from the investigation wing in the form of a statement recorded from a seller as bogus purchase and no opportunity of cross examination was provided, the statement recorded by the investigation wing cannot form the basis of investigation. The Hon'ble Court held that initiation of reassessment proceedings on the basis of statement given by seller, without giving assessee any opportunity of cross examination, were good grounds to allow the appeal of the assessee. 24. The Ld. DR also relied upon the decision of Calcutta High Court in the case of Premlata Tekriwal (2022) 143taxman.com173(Calcutta HC), which relates to the case of a beneficiary of accommodation entries, relating to 263 proceedings, which is not the case here, because there is neither any unexplained or bogus expenditure in the instant case. 25. We also find that after completion of assessment u/s 143(3) of the Act 61, this case is sought to be reopened after four year....