INCOME TAX ACT, 1961

Section 147

Reassessment - Bogus purchases - Non-application of mind by AO -

Assessee-firm was engaged in business of trading in Bearing. The assessment was reopened under section 147 and assessment was completed under section 143(1) read with section 147 by adding an amount as bogus purchases made from hawala dealers. On appeal, the first appellate authority confirmed the same. Assessee contended that reopening was bad in law as it suffered from non-application of mind by AO and was based only on certain information received from DGIT(Investigation). The so-called information was not verified or cross-examined. Held: No material/information was gathered by AO from the authority which alleged that dealers in question were Hawala Dealers. Assessee has discharged the burden of proof that lay on him. All possible evidences have been produced to prove the genuineness of the purchases by assessee. AO had made this disallowance based on surmises and conjectures, that to, by giving contradictory findings on the factum of purchase. Thus, there was no application of mind by AO and reopening of assessment is bad in law.

Relied:The Pr. CIT-7 v. M/s. Paramount Communication (P) Ltd. (2017) 392 ITR 444 (Del-HC) : 2017 TaxPub(DT) 794 (Del-HC) CIT--IV v. M/s. Insecticides (India) Ltd. (2013) 357 ITR 330 (Del-Trib) : 2013 TaxPub(DT) 2465 (Del-Trib) M/s. Controlla Electrotech (P) Ltd. v. DCIT, Circle-51, Kolkata in (I.T.A. No. 1443 & 1444/Kol/2014, dt. 9-9-2014) D.C.I.T., Circle-6, Kolkata v. Great Wall Marketing (P) Ltd. in (ITA No. 660/Kol/2011, dt. 3-2-2016)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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