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10-01-2020, Charak Pharma, Section 79, 147, 2(22)(e), Tribunal Mumbai

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6 days 3 hours ago #12050 by amit
Section - 79, 147, 2(22)(e)
Order Date - 10-01-2020
Favouring - Assessee
Court - Tribunal Mumbai
Appellant - DCIT
Respondent - Charak Pharma Pvt. Ltd.
Citation - 120Taxpundit114
Appeal No. - ITA No. 7117/MUM/2016
Asstt. Year - 2009-10



1. This appeal is filed by the revenue against the order of the Learned Commissioner of Income-tax (Appeals)–12, Mumbai [hereinafter for short “Ld. CIT(A)”] dated 01.09.2016 for the A.Y. 2009-10.

2. Revenue has raised the following grounds in its appeal: -

“1. "On the facts and circumstances of case and in law, the Ld.CIT(A) erred in deleting the addition made by the assessing Officer on account of Bogus purchase of Rs.31,200/-ignoring the fact that the party, M/s Ritesh Corporation had indulged in providing accommodation entries only.".

2. "On the facts and circumstances of case and in law, the Ld.CIT(A) erred in quashing the reopening proceedings without appreciating the fact that the several courts have accepted that mere calling for of information and keeping the same on the record does not tantamount to application of mind".

3. "On the facts and in the circumstances of the case and in law, the appellate order passed by the CIT(A) is prima facie wrong because after having allowed the appeal of the assessee on technical ground that re-opening of the assessment was bad in law, CIT(A) was not right in directing the AO to verify from the records and make necessary rectification, as per law in so far as assessee's ground of appeal no.4 before the CIT(A) was concerned.

4. The Appellant prays that the order of the CIT (Appeals) on the above grounds be set aside and that of the AO be restored.

5. The Appellant craves leave to amend or alter any ground or to submit additional new ground, which may be necessary.”

3. Briefly stated the facts are that, assessee is engaged in the business of Manufacturing and Marketing of Ayurvedic Pharmaceutical Products e-filed its return on 24.09.2009 declaring income of ₹.2,90,15,018/- which was later revised on 21 07.2010 declaring NIL income. Return was processed u/s. 143(1) of the Act and an assessment was made u/s. 143(3) of the Act on 08.12.2011. Subsequently, the assessment was reopened by issue of a notice u/s.148 of the Act, for the reason that assessee has entered into transaction of bogus purchases for ₹.31,200/- and further assessee had excess setoff of carry forward and accumulated loss and unabsorbed depreciation relating to amalgamating company u/s. 72A of the Act.

4. The re-assessment was completed by the Assessing Officer u/s.143(3) r.w.s. 147 of the Act on 31.03.2015 making addition of ₹.31,200/- towards bogus purchases and further denying the adjustment of carry forward and setoff of accumulated loss and unabsorbed depreciation relating to amalgamating company. The assessee challenged the assessment order before the Ld. CIT(A) in reopening the assessment u/s.147 of the Act and also on merits. The Ld. CIT(A) held that the reopening of assessment is bad in law as it is only a mere change of opinion without there being any tangible materials on record to reopen the assessment.

5. The Ld. DR strongly supported the orders of the Assessing Officer. Ld. DR further submitted that Assessing Officer has recorded proper reasons for reopening the assessment and therefore Ld. CIT(A) is not justified in holding that reopening is bad in law. On the other hand, the Ld. Counsel for the assessee supported the order of the Ld.CIT(A) and also filed submissions.

6. We have heard the rival submissions and perused the orders of the authorities below. On a perusal of the assessment order, we find that assessment was reopened for the reason that the assessee made bogus purchases to the extent of ₹.31,200/- and also set off of its carry forward

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