Majestic Handicraft Private Limited Vs DCIT (Delhi High Court)
Delhi High Court held that reassessment under section 148 based on material indicating that entities from whom material was procured by the petitioner were non-existing i.e. non-genuine. Accordingly, petition dismissed.
Facts- The petitioner has filed the present petition, inter alia, impugning a notice dated 22.03.2024 issued u/s. 148A(b) of the Income Tax Act, 1961 as well as the order dated 31.03.2024 issued u/s. 148A(d) of the Act.
Notably, AO had certain information to suggest that the petitioner’s income for the FY 2017-18 relevant to AY 2018-19 escaped assessment. Accordingly, the AO issued a notice dated 21.03.2022 under Section 148A(b) of the Act. One of the principal information as set out in the said notice indicated that the Investigation Wing had found that one of the entities (Balaji Enterprises) had purportedly supplied the goods to the petitioner, was found to be non-existing at the principal place of business.
Conclusion- Held that the material indicates that there is evidence that two of the entities from whom the petitioner had procured materials are not genuine. The bank accounts indicate matching of inflows and outflows coupled with the high turnover in a short span of time. This provides the reasons for the AO to question the purchases that are declared by the petitioner. Thus, , there are no grounds to interfere with the impugned order, the impugned notice and the notice issued under Section 148 of the Act. The petition is, accordingly, dismissed. Pending applications also stand disposed of.
