INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Tangible material came to possession of AO subsequently revealing escapement of income on account of non-genuine purchases -

Assessee-HUF was engaged in business of trading in TMT Bars, Steel, etc. AO received information from Sales Tax Department that the assessee was a beneficiary of accommodation bills provided by certain entities identified as hawala operators. Accordingly, the AO re-opened assessment under section 147. Assessee contended that the AO re-opened the assessment simply relying upon the information received from the Sales Tax Department, without independently applying his mind. Further, it contended that no tangible material come to the possession of the AO to form belief that income had escaped assessment, and hence, the re-opening was invalid.Held:AO received specific information from the Sales Tax Department revealing that certain purchases claimed to have been made by the assessee were non-genuine. On the basis of such information, the AO re-opened the assessment under section 147. Thus, it was clear that the purchases were never examined or verified at the time of processing of return of income under section 143(1). On the contrary, tangible material came to possession of the AO subsequently revealing escapement of income on account of non-genuine purchases and there was no dispute that on the basis of such material, the AO re-opened the assessment under section 147 and hence, such reopening was valid.

REFERRED :

FAVOUR : Against the assessee

A.Y. : 2010-11 to 2011-12

INCOME TAX ACT, 1961

Section 69C

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