2012 (9) TMI 984 - AT - Income Tax

Summary

Issues Involved:
1. Reopening of assessment u/s 148.
2. Validity of assessment framed u/s 147 without providing reasons recorded.
3. Reopening based on third-party documents without providing copies.
4. Addition to income without providing documents.
5. Addition without proper opportunity of being heard.
6. Disallowance of purchases as bogus.
7. Charging interest u/s 234B.
8. Initiation of penalty proceedings u/s 271(1)(c).

Summary:

Issue 1-4: Reopening of Assessment u/s 148
The assessee's grounds relating to the reopening of assessment u/s 148 of the I.T. Act were not seriously pressed during the hearing and were therefore dismissed.

Issue 5: Addition to Income Without Proper Opportunity
The assessee contended that the addition to income was made without providing proper opportunity of being heard. However, this ground was not separately adjudicated as it was intertwined with the issue of bogus purchases.

Issue 6: Disallowance of Purchases as Bogus
The primary issue was the disallowance of Rs. 4,10,165/- on the grounds of bogus purchases. The Assessing Officer (AO) disallowed the purchases from M/s. Shiv Metal Corporation based on the proprietor's admission that he issued bogus accommodation bills. The assessee failed to prove the genuineness of the purchases by not providing confirmation from the seller or producing the seller for verification. The Tribunal, referencing similar cases, concluded that the disallowance should be restricted to 12.5% of the bogus purchases to meet the ends of justice.

Issue 7: Charging Interest u/s 234B
This ground was general in nature and did not require separate adjudication.

Issue 8: Initiation of Penalty Proceedings u/s 271(1)(c)
This ground was also general in nature and did not require separate adjudication.

Conclusion:
The Tribunal partly allowed the assessee's appeals by restricting the disallowance to 12.5% of the bogus purchases. The other grounds were either dismissed or deemed general and did not require further adjudication. The order was pronounced in open Court on 21.09.2012.