TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 249
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....ving as under : "3. The case file reveals that there was delay of 1052 days in filing the present appeal. Mrs. Manju Madhusudan Dhoot, Legal heir of Late Madhusudan Banshilal Dhoot has filed an affidavit dated 08.10.2014 wherein inter alia it is submitted that Madhusudan Banshilal Dhoot, the husband of Mrs. Manju Madhusudan Dhoot was looking after the business. He expired on 08.05.2012. Prior to his death, he was having many health issues and was hospitalized for a period of almost one year and therefore, he could not attend to any of his business nor could appear before CIT(A). It is further submitted that none of herfamily members were aware of his business happenings and it was only when the Income Tax Department started to pressurize for the demand, she could look into the matter and she realized that after his death entire business activity has come to an halt and it was very difficult to get even the required documents. Thereafter, after taking advice of some legal consultants, she filed the appeal. In these circumstances, delay had occurred in filing the present appeal and the delay was not due to any mala-fide intentions. She therefore, prayed that the delay occurred in f....
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....hich has to be seen it is the 'reasonable cause' which prevented the assessee to file the appeals. In light of above judicial precedents and in considering the events after the death of assessee, I condone the delay in filing the instant appeals and proceed for adjudication on merits. 6. I first take up the appeal for A.Y. 2007-08. Grounds of appeal raised by assessee in ITA No.1919/PUN/2024 read as under: "The following grounds are taken without prejudice to each other - On facts and in law, 1] The Ld. CIT(A) erred in holding that the reopening u/s. 48 of the Act was valid without appreciating that reasons recorded for reopening the case were totally incorrect and hence, the reopening u/s. 148 was bad in law and the reassessment order passed u/s. 147 be declared null and void. 2) The Ld. CIT(A) failed to appreciate that the reopening u/s. 148 was on reason to suspect and not on reason to believe and therefore, the reopening u/s. 147 and the consequential reassessment be declared null & void. 3] The Ld. CIT(A) erred in confirming the addition of Rs. 35,29,742/- on the ground that the assessee has not submitted any evidences and hence, the estimated disallowance of purcha....
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....f the appellant in this case. In the A.Y. 2009-10, the Assessing Officer noticed that number of sundry creditors was bogus and therefore ha has made the addition. On identical ground the Assessing Officer reopened the assessment in the present assessment year. I therefore hold that the Assessing Officer had adequate reason to reopen the case. It is not necessary that the addition is required to be made always on the point mentioned in the reason for reopening. In the case of reopening entire case is ....and the addition can be made on any point of discrepancy. Accordingly, the contention of the assessee is rejected and the reopening of the case is valid." 11. I further notice that the basis for the reopening for A.Y. 2007-08 was the information available with the Assessing Officer based on his examination of records and purchase details for A.Y. 2008-09 found during the course of assessment proceedings. I notice that appeal of the assessee for A.Y. 2008-09 also came up before this Tribunal and the issue before the Tribunal was the addition made u/s. 68 of the Act for the unexplained purchases. The observation of this Tribunal in para 7 of its order dated 10.04.2018 in ITA No.1907/....
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....me chargeable to tax escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return u/s. 139 or in response to a notice u/s. 142(1) or 148 of the Act or to disclose fully and truly all material facts necessary for his assessment for that assessment year. Now the last part of the proviso, i.e. 'assessee fails to disclose fully and truly all material facts necessary for his assessment' is important and the same is applicable on the facts of the assessee because the sundry creditors appearing in the books were examined by the AO in the assessment proceedings for A.Y. 2008-09 and the assessee did not furnish the requisite information asked by the AO about the addresses of the vendors. Thereafter, the AO deputed Inspector to make the verification and then it was revealed that 7 out of 8 vendors/sundry creditors refused to have any transaction with the assessee. This information indicated that purchases of the assessee are prima-facie not genuine to the extent it has been claimed in the income-tax return. This information in my considered view was sufficient for the AO to have initiated the reassessment proceedings for the year which has....
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....assessee inflates purchases-it affects value of stock which, in turn, results into swelling the trade creditors year after year. 8. In the absence of books of account or other documents; of the total purchases claim of Rs. 4,26,90,097/, an estimated 10% claim is presumed to be inflated. In absolute term, the amount works out to Rs. 42,69,009/-. Addition to this extent is made to the returned income." 16. Going through the above observation, I notice that the ld. AO has made the impugned addition taking the basis of VAT rates. Though the assessee is showing sales @12.5% VAT and the purchases of 12.5% VAT amounts to almost 82% even then the AO on his own surmises and conjectures has observed that there is a huge difference of 8.5% in the two VAT rates and the assessee has intentionally increased to 12.5% VAT purchases with the intent of lessening VAT liability on sales. I fail to understand the logic of such observation because the assessee in this case is a manufacturer and purchased goods @4% VAT and 12.5% VAT depending upon the quantity and nature of goods required by it and has finally sold the goods chargeable to VAT @12.5%. Now the AO riding on such observation about VAT rat....