Brief of the case:
Hon’ble ITAT decided in this matter that reopening without application of mind is liable to quash and also elaborate that examination of facts and information received is necessary before reopening. In addition to this legal ground ITAT also heard the appeal on merits and decided various issues after considering the facts of the case.
Facts of the case:
- Original assessment of the assessee was accepted u/s 143 (1).
- Later on, on the basis of certain information received the case was reopened and notice was served accordingly.
- Assessment was completed u/s 147 which was challenged in appeal before CIT (A) who upheld the reopening.
- Besides the above AO also made addition of 20% of total amount after rejecting books of account. CIT (A) approved this action of AO by holding that since the sales have been accepted as genuine, for determining the net profit it will not be appropriate to tax the entire sales as income.
Contention of the revenue:
- In the information received it is clearly mentioned that these person received accommodation entries and name of the assessee appears in the list. Hence, AO was well in power to reopen the case of the assessee.
- At the time of reopening only prima facie material has to be looked into and there is no need of conclusive evidences.
- CIT (A) has confirmed the action of the AO while passing order.
- The CIT (A) has been most fare in restricting the addition to 20% despite holding that the purchases are bogus.
- In the statement all three persons accepted that they provide accommodation bills.
- The persons did not appear in response to the summons hence cross examination could not be provided.
Contention of the assessee:
Paid content
Become a Premium Member, or log in if you are already a Premium member.
