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TMI Blog2022 (2) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... RT ]. In view of the aforesaid factual and legal discussion, we are of the view that the reopening under section 147 and issuance of notice under section 148 is not in accordance with law and the same is set aside, resultantly the assessment order dated 25.02.2015 is quashed. Considering the facts that we have accepted two primary submissions of the Ld. AR for the assessee, therefore discussions on other submissions has become academic. In the result, ground No. 1of the appeal is allowed. Unexplained expenditure u/s 69 - We find that the AO has not rejected the books of the assessee, no comment was made by the AO on various documentary evidence, which were available before him. The ld AR for the assessee further submits that the assessee has declared better gross profit (GP) for the year under consideration @ 5.19%, which is more than the earlier years. Therefore, we find that the assessee has good case on merit as well - Appeal of the assessee is allowed - ITA No. 980/AHD/2016 - - - Dated:- 2-12-2021 - Shri Pawan Singh, Judicial Member And Dr. Arjun Lal Saini, Accountant Member For the Assessee : Shri P.M.Jagasheth, C.A For the Revenue : Shri Deependra Kum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... genuine. It is failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment. Total income of the assessee company which has escaped assessment is to the extent of ₹ 1,68,69,977/- . 3. Notice under section 148 dated 29.03.2014 was served upon the assessee. The assessee filed acknowledgment of return of income in response to notice under section 148 of the Act on 01.01.2015. The AO furnished reasons recorded vide his letter dated 07.01.2015, which was served on the assessee on 13.01.2015 and proceeded for reassessment. During reassessment the assessee was asked to furnish the details of parties i.e. addresses of parties, PAN No., amount of purchases payment, details and outstanding payment. The Assessing Officer recorded that in response to show cause notice no information was furnished by the assessee. The assessee was given one more opportunity to furnish such details. The Assessing Officer recorded that no details were furnished therefore, the assessee was proceeded ex parte and the Assessing Officer made disallowance of entire purchases of ₹ 1.68 crores in his order dated 25.02.2015 passed under section 144 r.w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in question for the year under consideration is also not justified. To support his submissions the ld AR for the assessee relied on the decision of Delhi High Court in CIT Vs International Tractors Ltd. [2017] 84 taxmann.com 132(Delhi). 7. In alternative submissions the ld. AR for the assessee submits that the AO made reopening on the basis of borrowed satisfaction. No independent investigation was made or carried out by the AO, before making reopening. The assessee while filing return under section 139(1) furnished all the details fully and truly. There is no failure on the part of the assessee. The ld AR for the assessee by referring the reasons of reopening submits that the details of the reasons recorded clearly shows that all information with regards to expenses of purchases from four parties with all details were already available on record. Hence, there was no failure on the part of the assessee to disclose all material facts truly and fully necessary for assessment. As the notice under section 148 was issued after the expiry of four year from the end of relevant assessment year, hence, no action can be taken when there was no failure on the part of assessee. All ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see cannot be doubted as the parties may have shifted from their business place. There is no allegation of A.O. that the parties from whom the assessee has made purchases were indulging for providing accommodation entry. The ld AR for the assessee further submits that the assessee has declared better gross profit (GP) for the year under consideration. In A.Y. 2005-06 the assessee declared GP @ 4.78%, in A.Y. 2006-07 @ 4.77% and in the year under consideration @ 5.19%.The assessee has filed following documents on record; Copy of order under section 263 dated 30.03.2014 for AY 2005-06, Copy of reasons recorded for reopening under section 147 for AY 2007-08, Copy of notice under section 148 dated 29.03.2014, Confirmation of accounts with bills of the impugned parties for AY 2007-08, Copy of assessment order under section 153C rws 143(3) dated 30.122011 for AY 2007-08 and Order of Tribunal for AY 2005-06 in ITA No. 236/AHD/2014 dated 08.03.2021. 10. On the other hand the ld. Sr DR for the revenue supported the order of lower authorities. The Ld. DR for the revenue on the objection of borrowed satisfaction submits that the A.O. while recording the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y notice under section 148 was issued after expiry of four year from the end of relevant assessment year, therefore the Proviso to section 147 will come into effect. And as per said Proviso, no action can be taken after expiry of four year unless any income chargeable to tax has escape assessment by the reasons on the failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. As the assessee has already disclosed all the facts fully and truly all necessary for assessment in the form of expenses of purchases shown purchases. Hence, we are of the view that notice under section 148 is issued on the basis of material available on record on the file of AO, thus, it is also a case of change of opinion, which is not permissible under law and has been held by Hon ble Apex Court in CIT Vs Kelvinator of India Ltd (supra). In view of the aforesaid factual and legal discussion, we are of the view that the reopening under section 147 and issuance of notice under section 148 is not in accordance with law and the same is set aside, resultantly the assessment order dated 25.02.2015 is quashed. Considering the facts that we have accepted two primary ..... X X X X Extracts X X X X X X X X Extracts X X X X
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