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TMI Blog2018 (9) TMI 2035X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded the reasons as borrowed from the report of the Investigation Wing without specifying the nature of transaction whereas the assessee had only one transaction of purchase from the said party namely M/s Kothari Impex - we hold that the reopening is not valid and the same is liable to be quashed. Accordingly, the Assessing Officer has framed reassessment without jurisdiction and therefore, the reassessment order is not valid and the same is set aside. - Decided in favour of assessee. - ITA No. 624, 800/JP/2018 - - - Dated:- 18-9-2018 - SHRI VIJAY PAL RAO AND SHRI VIKRAM SINGH YADAV, JJ. Appellant by : Shri P.C. Parwal (CA) Respondent by : Shri J.C. Kulhari (JCIT) ORDER VIJAY PAL RAO, J. These two appeals by the assessee are directed against the two separate orders dated 23/02/2018 and 27/03/2018 of ld. CIT(A)-2, Jaipur for the A.Y. 2009-10 and 2010-11 respectively. For the assessment year 2009-10, the assessee has raised following grounds of appeal: 1. Under the facts and circumstances of the case, the notice issue U/s 148 and consequent order passed U/s 147 is illegal and bad in law. 2. The ld. CIT(A) has erred on facts and in law in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act then in absence of failure on the part of the assessee to disclose all material facts necessary for assessment, the reopening on the ground of bogus purchases is not permitted. The ld AR has referred to the reasons recorded by the Assessing Officer and submitted that even the Assessing Officer was not sure about the income assessable to tax has escaped assessment whether on account of bogus share application money or bogus unsecured loan or bogus sale and purchases. Thus, it is apparent from the reasons that the Assessing Officer has not applied his mind while forming the believe that it is a borrowed satisfaction based on the report of the DIT (Investigation) for reopening of the assessment, which is not permissible under the law. In support of his contention, he has relied upon the following decisions. (i) M/s Dwarka Gems Ltd. Vs DCIT ITA No. 71/JP/2017 order dated 27/03/2018 (Jaipur)(Trib). (ii) Nirmala Agarwal Vs ACIT ITA No. 995 996/JP/2016 order dated 11/04/2018 (2018) 58 Taxworld 280 (Jaipur)(Trib). (iii) M/s Karwasra Developers Pvt. Ltd. ITA No. 393/JP/2016 order dated 11/06/2018 (Jaipur)(Trib). (iv) Dynacraft Air Controls Vs. Sneha Joshi ors. (201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he year the assessee has taken accommodation entries in the nature of bogus share application money/bogus unsecured loan/ bogus sale and purchases. This statement of the Assessing Officer in the reasons recorded clearly shows that the Assessing Officer was not sure about the exact nature of transaction as accommodation entry availed by the assessee from M/s Kothari Impex. Whereas as per the record, the assessee has made purchases of the said amount from M/s Kothari Impex and no other transaction is either recorded in the books or is found as per search and seizure proceedings. It clearly reveals that the reasons recorded by the Assessing Officer are very vague in nature without specifying the transaction whether it is share application money or unsecured loan or sale or purchases. It is not the case of transaction first time came into light only after the report of the Investigation Wing, was received by the Assessing Officer but the original assessment was completed U/s 143(3) of the Act and the Assessing Officer has conducted an enquiry and taken a decision that some of the purchases made by the assessee were unverifiable and accordingly a trading addition of ₹ 2,50,000/- w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 143(3) on 27th December, 2010 after an addition on account of unverifiable/bogus purchases was made by the AO. Thus it is manifest from the record that the AO while completing the original assessment under section 143(3) has conducted an enquiry in respect of the purchases made by the assessee and finally concluded that the purchases made by the assessee from the 12 parties were not verifiable and accordingly an addition of 25% of such purchases were made by the AO. Therefore, the issue of genuineness of purchases was duly examined by the AO while completing the scrutiny assessment under section 143(3). The AO, thereafter, issued a notice under section 148 on 21.11.2014 which is after four years from the end of the assessment year under consideration. The reasons recorded for reopening of the assessment are as under :- As per information it had been established that bogus sales entries were made in favour of M/s Dwarka Gems on various dated during F.Y. 2007-08 i.e. A.Y. 2008-09 total amounting to ₹ 31,40,818/-. These entries were provided by M/s Meridian Gems M/s Millenium Stars which are some of the bogus concerns of Bhanwar Lal Jain Group. Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not permissible without satisfying the condition precedent as provided under the provisions of section 147 of the Act. The subsequent information received by the AO cannot remove or relax the said condition provided under the provisions of section 147 that the assessee failed to disclose fully and truly all the material necessary for assessment. In the case in hand, when the AO has already conducted an enquiry on the issue and the assessee is not expected to furnish more than what was already furnished during the assessment proceedings, then the reopening based on the information from the Investigation Wing on the same issue is nothing but change of opinion and to review the order passed by the AO under section 143(3) which is not permissible under law. Accordingly, in the facts and circumstances of the case, we hold that the reopening is not valid and, therefore, the reassessment framed by the AO is without jurisdiction and consequently the reassessment order passed is quashed. Thus, the reopening in the said case was also based on the report of the Investigation Wing, Mumbai and the Assessing Officer proposed to reopen the assessment to assess the income on account of accomm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of AO in treating the purchases of ₹ 1,71,03,970/- made from Kothari Impex as bogus by not considering the various evidences filed by the assessee. 2.1 The Ld. CIT(A) has erred on facts and in law in making addition of ₹ 70,45,465/- (1,74,32,920- 1,03,87,455) by applying g.p. rate of 9% on turnover of ₹ 19,36,99,119/- as against addition of ₹ 42,75,990/- made by AO by disallowing 25% of the purchases of ₹ 1,71,03,970/- made from Kothari Impex, thereby enhancing the addition by ₹ 27,69,475/-. She has further erred in making the addition by applying g.p. rate of 9% of the turnover. She has further erred in making the addition by application of g.p. rate ignoring that Hon ble ITAT in ITA No.429/JP/15 dated 13.05.2016 in the assessee s own case for the same AY has disapproved the application of g.p. rate applied by the AO and restricted the addition at 15% of the alleged unverifiable purchases. 3. The assessee craves to amend, alter and modify any of the grounds of appeal. 4. Necessary cost be allowed to the assessee. 7. Ground No.1 of the appeal is regarding the validity of initiation of proceedings U/s 147/148 of the Act an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The above concerns of Gautam Jain Others Group Surat is indulged in providing accommodation entries in lieu of cash obtained from the beneficiary and not doing any genuine business activities as divulged during the course of search and seizure proceeding in Gautam Jain Others Group Surat. The assessee has failed to disclose fully and truly all material facts necessary for its assessment. Therefore, I have the reason to believe that, the income of ₹ 1,71,03,970/- which is chargeable to tax, has escaped assessment within the meaning of section 147 of the IT Act 1961 Thus, the Assessing Officer has recorded an identical reasons except the fact that for this year the Assessing Officer has specified the transaction as bogus purchases made from Kothari Impex. Further the information received by the Assessing Officer includes the statement of a different person namely Shri Gautam Jain instead of Shri Vijay Narendra Kothari. Thus the Assessing Officer while recording the reasons for two years considered two different statements in respect of transactions of purchases made from the same party. All other facts are identical to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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