TaxTMI 
TaxTMI 
2025 (12) TMI 1221
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....e brief facts of the case are that the assessee had filed its return of income for the A.Y. 2015-16 on 12.09.2015 declaring loss of Rs. (-) 97,895/-. The Assessing Officer had received an information from the ADIT (Inv.), New Delhi, that the assessee had made huge transactions with entities M/s. A.M. Enterprise and M/s. Vandana Raj Corporation. On enquiry, the assessee has submitted that it has made purchase of newsprint papers from the above entities. The Assessing Officer had issued summons to M/s. A.M. Enterprise and M/s. Vandana Raj Corporation, which were returned undelivered. Thereafter, physical enquiry was made and M/s. A.M. Enterprise was not found in existence at the given address. Regarding M/s. Vandana Raj Corporation, it was reported by the Inspector that this firm belongs to one Shri Raj Kumar Singh who was engaged in dealing of hardware items. On the basis of the enquiry reports, the Assessing Officer had recorded his reason under Section 147 of the Act for escapement of income and the case of the assessee was reopened by issue of notice under section 148 of the Act on 13.02.2019. In the course of assessment, the Assessing Officer had treated the purchase of Rs. 2,91....
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....ssed by the Ld. AR of the assessee. Hence, this ground is dismissed. 7. Ground nos.2 & 3 pertain to addition of Rs. 23,30,978/- confirmed by the Ld. CIT(A) in respect of bogus purchase at the rate of 8%. The other grounds taken by the assessee are only subsidiary ground in respect of this addition. Shri Tushar Hemani, Ld. Sr. Advocate appearing for the assessee, submitted that the Assessing Officer had reopened the case alleging bogus purchase of Rs. 2,00,000/- from M/s. A.M. Enterprise. However, the Assessing Officer did not make any addition in respect of purchase from M/s. A.M. Enterprise. The Ld. Sr. Counsel submitted that it is a settled law that no addition can be made on other issues in absence of addition for the issues based on which the case was reopened. In this regard, he placed reliance on the following decisions:- a) CIT vs. Mohmed Juned Dadani - [2014] 355 ITR 172 (Guj) b) CIT vs Jet Airways - [2011] 331 ITR 236 (Bombay) c) Ranbaxy Laboratories Ltd. - [2011] 336 ITR 136 (Delhi) 8. The Ld. Sr. Counsel submitted that no addition was made in respect of bogus purchase of Rs. 2,00,000/- from M/s. A.M. Enterprise as recorded in the reason a....
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....does not establish the genuineness of the purchases. He submitted that no supporting documents for transportation of goods, delivery challan, vehicle nos., weighing slips, bilty for transportation etc. were brought on record to establish that the purchases were genuine. The Ld. Sr. DR, therefore, strongly supported the order of the lower authorities on the issue of bogus purchase. As regarding estimation of income out of bogus purchase, the Ld. Sr. DR submitted that no addition for entire bogus purchase was made, rather the Assessing Officer had made addition for only profit element embedded in such bogus purchase at the rate of 15% which was reduced to 8% by the Ld. CIT(A). He further submitted that, considering the gross profit of 2.57% disclosed by the assessee, the estimation of profit @ 8% as upheld by the Ld. CIT(A) was reasonable. 10. We have considered the rival submissions. The contention of the assessee is that the Assessing Officer had recorded escapement of income of Rs. 2,00,000/- only pertaining to M/s. A.M. Enterprise, in respect of which no addition was made in the assessment order. Under the circumstances, no addition could have been made in respect of transacti....
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....er entity and the assessee company could not justify the transaction made with the M/s AM Enterprises during the F.Y. 2014-15 relevant to A.Y. 2015-16 to the tune of Rs. 2,00,000/-. In view of the above, I have reason to believe that there is escapement of income from tax to the tune of Rs. 2,00,000/- by reason of failure on part of the assessee to disclose fully and truly all material facts necessary for its assessment for that assessment year. Therefore, this is a fit case for initiating proceedings u/s. 147 of the Act for Α. Υ. 2015-16. 4 In this case, return of income was filed for the year under consideration but no scrutiny assessment u/s. 143(3) of the Act was made. Accordingly, in this case the only requirement to initiate proceedings u/s. 147 is reason to believe which has been recorded above. 5. It is pertinent to mention here that in this case the assessee has filed return of income for the year under consideration but no assessment as stipulated u/s. 2(40) of the Act was made and the return was processed only u/s. 143(1) of the Act. In view of the above, the provisions of clause (b) of Explanation 2 to section 147 are applicable to facts ....
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....Officer even without mentioning the quantum of escapement in the reason. Since the case of the assessee was reopened in order to examine the transactions of the assessee with M/s. A.M. Enterprise as well as with M/s. Vandana Raj Corporation, the Assessing Officer had rightly made the addition in respect of the transactions with M/s. Vandana Raj Corporation. From the reasons as recorded by the Assessing Officer, it cannot be held that the case was not reopened to examine the transactions of the assessee with M/s. Vandana Raj Corporation. Therefore, the contention of the assessee that no addition could have been made in respect of the transactions with M/s. Vandana Raj Corporation, is rejected. 12. As regarding genuineness of purchases from M/s. Vandana Raj Corporation, the assessee has submitted that the evidences in the form of bills and vouchers as well as payment through banking channels were duly brought on record. The authenticity of the purchases cannot be confirmed only on the basis of purchase bills and payment details. Such evidences are also kept on record even in respect of bogus purchases. The assessee was unable to bring on record any evidence for transportation of t....