×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
These are the appeals filed by the assessee against the separate orders of ld.CIT(A)-I, Jaipur dated 09/11/2018 for the A.Ys. 2012-13 and 2013-14 in the matter of order passed U/s 143(3) read with Section 147 of the Income Tax Act, 1961 (in short, the Act).
02. The grounds taken by the assessee in both the years are common. Grounds taken by the assessee in the A.Y. 2012-13 reads as under:
“1. That the ld. CIT(A) has erred in law and on facts in estimating GP of the appellant @ 8.5% resulting into an addition of Rs. 4,04,772/- as against an addition of Rs. 9,83,125/- made by the ld. A.O. on account of alleged unverifiable purchases of diamonds even after the facts that the appellant had declared sufficient GP and was comparable to average historical GP rate declared. Relief may please be allowed by deleting the addition so sustained by the ld. CIT(A).”
2.1 Following additional ground was raised by the assessee:
“1. On the facts and circumstances of the cas and in law the ld. CIT(A) erred in not holding the assumption of jurisdiction by the ld. A.O. as bad in law as the conditions laid down under the Act for initiating reassessment proceedings u/s 147 of the Act were not fulfilled.
2. On the facts and circumstances of the case and in law, the ld. CIT(A) has erred in not holding that the ld. A.O. erred in not providing an opportunity to cross examination to the appellant while relying on a third party statement as the same was also in violation of principles of natural justice ”
03. Rival contentions have been heard and record perused. The facts in brief are that the case of the assessee was reopened on the basis of the information received from the office of the DGIT (Inv.). Mumbai that certain firms are engaged in the business of providing accommodation entries and out of such parties the appellant had also purchased goods from certain firms totaling to Rs. 1,81,71,990. Based on this information A.O. formed an opinion that income to the tune of Rs. 1,81,71,990 related to concealed income. In the assessment the Id. AO has disallowed a sum of Rs. 45,42,998 being 25% of above referred sum and added the same to the income of the assessee.
04. By the impugned order, the ld. CIT(A) upheld the reopening of the assessment but given substantial relief by estimating profit rate at 8.5%, accordingly, against the addition of Rs. 45,42,998/-, the ld. CIT(A) has upheld addition of Rs. 15,41,042/-, against which the assessee is in further appeal before the ITAT.
05. At the outset, the ld AR challenged the reopening of assessment by contending that the reopening itself was not valid in so far as merely on the basis of information the A O has reopened the assessment and has not made any enquiry to reach to the satisfaction that there was a reason to believe that the income has escaped assessment. Our attention was also invited to the reasons recorded for reopening according to which the A.O. has reopened the assessment on the basis of information from DGIT(Inv.), Mumbai. As per the reasons so recorded by the A.O., there was no satisfaction of the A.O. with regard to any income having been escaped assessment and merely on the basis of information, he has reopened the assessment. The ld AR has further contended that the A.O. has neither supplied copy of information so received on the basis of which addition has been made nor any opportunity to cross examination was