TaxTMI 
TaxTMI 
2025 (6) TMI 1519
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....he assessee is before me as a cross objector for the aforementioned year by raising the following grounds: "1. Without prejudice to the addition deleted on merits, Ld. CIT(A) erred in not adjudicating ground no. 2 taken before him. The notice issued by AO u/s 148 is illegal, ab initio void. There was no material before the AO for formation of belief of escapement. The AO reopened the assessment without application of mind. The reassessment proceeding was illegal and not sustainable. 2. The initiation of reassessment proceedings is illegal inasmuch as reasons were recorded by non jurisdictional AO as well as notice u/s 148 was issued by AO who did not have jurisdiction over assessee. The reassessment proceedings and consequent reassessment order is illegal and liable to be quashed. 3. The reassessment order passed by the A.O is illegal inasmuch as no notice u/s.143(2) was issued. The reassessment order is illegal and liable to be quashed. 4. The cross objector reserves the right to add, amend or alter any of the ground/s of cross objection." 2. Succinctly stated, the assessee had filed his return of income for A.Y.2010-11 on 28.10.2010, declari....
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....randi adopted by the entry operators was to make the beneficiary buy purchase bills without any actual delivery of goods. Since, the assessee has taken bogus purchase bill from aforesaid concern, I have reason to believe that an income of Rs. 38,24,721/- or the entire traded value which may be more than Rs. 38,24,721/- has escaped assessment for the A.Y. 2010-11 within the meaning of section 147 explanation 2(b) of the Income Tax Act, 1961. Therefore, it is proposed to issue notice u/s 148 of the Income Tax Act, 1961." 3. The assessee vide his reply dated 06.11.2017 submitted that there was no income which had escaped assessment within the meaning of Section 147 of the Act. It was further submitted by the assessee that he had no dealing with the aforementioned three concerns viz., M/s. Anmol Traders, M/s. Jai Ambey Sales Corporation and M/s. Meenal Enterprises during the year under consideration. However, the aforesaid explanation of the assessee did not find favour with the A.O. It was observed by the A.O that the assessee had not maintained any books of account and in his return of income no sales were shown. Accordingly, as the assessee had failed to substantiate the....
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....nsideration: 1. The appellant in this case, has not claimed any purchases. As per the return of income of the appellant filed for the year under consideration, he has shown income from other sources and there is no business income. In this regard, one must understand as to why the assessees debit bogus purchases in their books. There are two modes by which the bogus purchases are debited in the books. In the first mode, the purchases are outright bogus, which are debited in the books in order to inflate the expenses and to reduce the taxable income. In this mode, no material enters into the stock register, the assessee gives the cheque to entry providers and collects bill from them alongwith the cash after deducting their commission. In the second mode, the supplier of the material doesn't give bill to the assessee as he wants cash in lieu of the material supply. In such a case, the assessee obtains the bills from accommodation entry providers, but the material is actually purchased and the same entres into stock register. In this mode, normally, the profit embedded in the transaction is added back instead of the entire purchase amount. However, in both these modes, th....
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..... M/s Gauri Construction. The appellant placed before the AO the notices which were received by him but were addressed to M/s Gauri Construction. The fact of the matter is that the appellant had joined as a partner in M/s Gauri Construction in A.Y. 2011-12, the year in which M/s Gauri Construction was converted into a firm from a proprietorship concern. It was therefore very much possible that when the bogus transactions of M/s Gauri Construction for the year A.Y. 2010-11 were noticed by the Commercial tax Department subsequently, they were tagged alongwith the PAN of the partner, which by that time was the appellant. In fact, the notice of the AO addresses M/s Gauri Construction but the PAN was used that of the appellant as can be seen below: Therefore, there is reason to believe that the information was shared by the Commercial tax Department in 2017 about M/s Gauri Construction tagging the partner's name, however, while issuing the notice, the AO used the PAN of the appellant and started proceedings against the appellant itself. Interestingly, since the notice was also issued to M/s Gauri Construction, the appellant submitted before the AO, the reply filed ....
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....does not call for any interference. 8. Per contra, the Ld. Departmental Representative (for short 'DR') relied on the order of the A.O. 9. Admittedly, it is a matter of fact borne from the order of the CIT(Appeals) that the impugned purchases aggregating to Rs. 38,24,271/- alleged to have been made by the assessee from three parties viz. (i) M/s. Anmol Traders; (ii) M/s. Jai Ambey Sales Corporation; and (iii) M/s. Meenal Enterprises were actually the purchases that were made by M/s.Gauri Construction. On a perusal of the copies of purchase bills filed before me at Page 25 to 45 of APB, I find that the same were issued in the name of M/s. Gauri Construction and there is no mention of the name of the assessee. On a perusal of the order of the CIT(Appeals), it transpires that the assessee had joined as a partner in M/s. Gauri Construction in A.Y. 2011-12, the year in which M/s Gauri Construction was converted into a firm from a proprietorship concern. The CIT(Appeals) further opined that when the bogus transactions of M/s Gauri Construction for the year A.Y.2010-11 were noticed by the Commercial tax Department subsequently, they were tagged alongwith the PAN of the partner, whic....