PCIT Vs Purple Suppliers Pvt. Ltd. (Supreme Court of India)
The Supreme Court of India dismissed the Revenue’s Special Leave Petition filed against the judgment of the Calcutta High Court in the matter concerning reassessment proceedings under Sections 147 and 148 of the Income Tax Act, 1961. The Supreme Court condoned the delay, heard the Revenue, and held that there was no ground to interfere with the order passed by the High Court. Consequently, the Special Leave Petition and pending applications were dismissed.
Read Calcutta HC judgment in this case: Calcutta HC Quashes Reassessment Due to Mere Suspicion Without Independent Inquiry
The Calcutta High Court judgment arose from three appeals filed by the Revenue challenging a common order of the Income Tax Appellate Tribunal relating to assessment years 2011-12, 2012-13, and 2013-14. The assessee, engaged in wholesale business of jewellery and diamonds, had filed returns for all three years. For AY 2011-12, the return was processed under Section 143(1), while AYs 2012-13 and 2013-14 were completed under scrutiny assessments under Section 143(3).
The reassessment proceedings were initiated after the Assessing Officer received information from the Investigation Wing, Mumbai, regarding suspicious business activities of Sancheti Diamonds Pvt. Ltd. The Investigation Wing alleged that Sancheti had huge turnover, meagre profits, inadequate business premises, and that its key person had admitted to providing bogus purchase entries. Based on this information, notices under Section 148 were issued alleging bogus purchases by the assessee from Sancheti, and additions under Section 69C were made during reassessment proceedings.
