TaxTMI 
TaxTMI 
2025 (5) TMI 1585
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....sequently, AO received information from DDIT (Inv.), Unit 6 (1), Delhi that assessee transacted with M/s. Shree Krishna Trading Company during the year under consideration which raises suspicion that how the assessee who is doing business of fabrics/clothes has a business relation with the alleged company which trades in sale of cashew nuts. The Assessing Officer, in order to verify, initiated reassessment proceedings u/s 147 of the Income-tax Act, 1961 (for short 'the Act') and notice u/s 148 was issued on 31.03.2019. In response, the assessee filed the return of income on 12.04.2019 declaring income at Rs. 4,17,410. Accordingly, the Assessing Officer issued notice u/s 143 (2) of the Act on 12.09.2019. During reassessment proceedings, the ....
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....nor was any independent inquiry conducted to validate the reopening of the case. The entire reopening proceedings are bad in law and deserve to be quashed. 2. Non-Application of Mind by the Assessing Officer: That the LD. [CIT(A)] erred in upholding the action of the Assessing Officer (AO) in making an addition of Rs. 24,20,165 creating tax demand of Rs. 13,59,670/- on account of alleged bogus purchases without independent application of mind and by relying solely on the information received from the Investigation Wing without conducting further independent inquiries. The addition made is arbitrary, baseless, and liable to be deleted. 3. Denial of Opportunity to Cross-Examine: That the LD. CIT(A) failed to appreciate that ....
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....Act. The failure to conduct such inquiries makes the addition wholly unsustainable. 7. Books of Accounts Duly Audited: That the learned CIT(A) failed to appreciate that the books of accounts of the Appellant were duly audited by a Chartered Accountant as required under the Income Tax Act, 1961, and no discrepancies were found in the transactions with M/s Shri Krishna Trading Company. Therefore, the addition made by the AO on the assumption of bogus purchases is bad in law. 8. Violation of Principles of Natural Justice: That the learned CIT(A) erred in confirming the addition made by the Ld. AO without giving the Appellant a fair opportunity of being heard and without considering the submissions and evidence provided. This ....
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....ready declared in his return of income and the same may be sustained. 6. On the other hand, ld. DR of the Revenue relied on the orders of the authorities below. 7. Considered the rival submissions and material placed on record. I observed that based on the information received from Investigation Wing, the purchases declared by the assessee were found to be bogus purchases. At the same time, I observed that assessee has already declared the sales and also recorded accommodation entries, the Assessing Officer has disallowed the whole purchases as not proper. However, I observed that Hon'ble High Court has considered similar issues and they held that in case of bogus purchases, only certain percentages has to be sustained as income of th....