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25-11-2019, Anand Govind Vyas, Section 147, 148, Tribunal Mumbai

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7 months 1 week ago #11615 by amit
Section - 147, 148, 133(6), 151
Order Date - 25-11-2019
Favouring - Assessee Partly
Court - Tribunal Mumbai
Appellant - Anand Govind Vyas
Respondent - ITO
Justice - Shamim Yahya (AM) & Pawan Singh (JM)
Citation - 1219Taxpundit4
Appeal No. - ITA No. 5072/Mum/2018
Asstt. Year - 2009-10


PER : Pawan Singh, JM

1. This appeal filed by the assessee is directed against the order of CIT(A)-53, Mumbai dated 24-07-2018 for the assessment year 2009- 10. The assessee has raised the following grounds of appeal

“1.) The Id. CIT (A) erred in confirming validity of reopening for various reasons.

2.) The Id. CIT(A) erred in confirming partial addition for so called unverifiable purchases despite submission of affidavit of suppliers, payment by account payee cheques to suppliers, proof of transportation of goods, corresponding sale, admission of factum of purchase by LAO in assessment etc reasons.

3.) Without prejudice to above, the Id. CIT (A) was not justified in confirming the quantum of addition for so called unverified purchases.

4.) Both the lower authorities were possibly willfully perverse in passing the order the LAO possibly backdated the order as the order was passed before the date of hearing. Hence cost be awarded to the innocent appellant.”

2. The brief facts of the case are that the assessee, an individual, filed his return of income on 22-09-2009 declaring income at Rs.8,05,640/-. The return was processed u/s 143(1) of the I.T. Act, 1961 accepting the returned income. Subsequently, the case was re-opened under section 147 on the basis of information received from Sale Tax Department, Government of Maharashtra informing that certain hawala operators were indulging in providing accommodation bills without actual delivery of goods. The Sale Tax Department, Government of Maharashtra referred the list of such hawala dealers and the beneficiary to the DGIT
(Investigation), Mumbai. The name of assessee appeared in the list of beneficiaries. The assessee allegedly made the purchases of Rs.1,31,09,897 /- from such hawala dealers. On the basis of information, the Assessing Officer made a belief that the income of the assessee escaped assessment, therefore, re-opened the assessment under section 147. Notice under section 148 dated 11-02-2014 was issued to the assessee. Subsequently, the assessing officer issued notice u/s 142(1) on 16-05-2015 and the assessee was also supplied with recorded reasons for re-opening. The Assessing Officer thereafter issued notices u/s 143(2) and u/s 142(1) were issued on 27-11-2014. During the assessment, the Assessing Officer noted that the assessee has shown purchases from the following party, who was declared as hawala dealers by the Sale Tax Department, Government of Maharashtra:

3. During the assessment the assessee was asked to furnish name of seller with address, bills and voucher, description of goods, quantity, rate and amount, mode of transportation with vehicle number and payment details. The details of corresponding sales were also required by assessing officer. The assessing officer recorded that the assessee couldnot produce any evidence. The assessing officer issued notice under section 133(6), which was return back with the remark ‘left’/ not traceable. After analysing the books of the assessee and the evidences furnished by assessee, the AO concluded that the purchases made by
assessee from that party were not genuine as claimed and debited in his P&L account The AO rejected the books of account of the assessee. The AOconcluded that by showing the purchases from hawala parties, the assessee suppressed the profit to reduce the tax liability. The AO accordingly disallowed 12.5% of the aggregate of non genuine purchases. On appeal, action of the assessing officer was confirmed. Further aggrieved, assessee has filed further appeal before us.

4. We have heard the submissions of the Ld.AR for the assessee and the Ld. DR of the revenue. The Ld.AR of the assessee submits that the purchases shown by the assessee are genuine. Ground 1 relates to validity of reopening. The Ld.AR of the assessee submits that there was no verification of the opinion by AO in the reasons recorded. The approval of Joint Commissioner was without application of mind. The AO not supplied this information despite making request. The AO not supplied copy of material on the basis of which reasons of reopening was recorded. The Ld.AR of the assessee submits that in absence of sufficient material for reopening, the reopening was invalid. The Ld.AR of the assessee relied upon the decision of Hon’ble Apex Court in CIT vs Odeon Builders Pvt Ltd in Review Petition in Civil Appeal No 9604-9605 of 2018 order dated 21-08-2019.

5. On the other hand, the Ld. DR for the revenue supported the order of lower authorities. The Ld. DR further submits that in the present case, no scrutiny assessment u/s 143(3) was passed. The assessment was reopened by issue of notice u/s 148 dated 11-02-2014 which was within four years from the end of relevant assessment year. No objection was filed by the AO against the reopening of the assessment. Therefore, no approval from the competent authority was required.

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