Case Law Details
Raman Sood Vs ITO (ITAT Delhi)
On being seen ledger account of the seller of the goods in the relevant Financial year it is noted that there are no credits appearing in the said ledger as being no purchases from the said seller. No purchases made from the seller during the AYr. Under consideration. Evidentiary value of VAT returns can not simply be brushed aside.
The assessee duly filed audited accounts at the time of filing of the return of income which certainly puts confirmation that the assessee has maintained the books of accounts. Even the ledger account of the seller of the goods in the books of the purchaser shows payments made and no purchases made during the year.
Information or material received from Investigation Wing can constitute relevant material but simultaneously AO has to first apply his mind on the facts and assessment records of the assessee to prima facie reach a conclusion for reopening u/s 147. The AO has noted in his assessment order that the assessee has not filed the return of income but as per records the return was filed on 30.09.2009. Reasons to believe for reopening must be based on the correct facts as held by Hon’ble Bombay High Court 411 ITR 207.
Hon’ble Apex Court dismissed the Revenue’s SLP as assessment must be based on correct facts. Assessment based on wrong appreciation of facts are quashed by the ITAT New Delhi. Even there were no purchases by the assessee from seller during the year under consideration but the AO has made a disallowance of those purchases which were not even debited to the P & L Account during the year under consideration. On merits the addition could not be sustained.
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