HARISH KUMAR ARORA,DELHI vs. ITO WARD-63(3), NEW DELHI

ORDER

PER SUCHITRA KAMBLE, JM

are as under:-

1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] is bad, both in the eyes of law and on facts.

2. On the facts and circumstances of the case, learned CIT(A) has erred, both on facts and in law in rejecting the contention of the assessee that the initiation of the reassessment proceedings and the reassessment order are bad, both on the facts and in law and liable to be quashed, as the statutory conditions and procedure prescribed under the statute have not been complied with.

3 (i) On the facts and circumstances of the case, learned CIT(A) has erred, both on facts and in law in rejecting the contention of the assessee that the reassessment proceedings initiated by the AO are bad in the eyes of law, as the reasons recorded for the issue of notice under section 148 are bad in the eyes of law and are contrary to the facts.

(ii) On the facts and circumstances of the case, learned CIT(A) has erred, both on facts and in law in rejecting the contention of the assessee that the reassessment order passed by the AO is bad and liable to be quashed as the same has been reopened on the basis of the reasons which are vague and have been recorded without application of mind on the part of the AO.

4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of an amount of Rs. 1,86,161/- on account of purchases made by the assessee treating the same as bogus invoking section 69C of the Income Tax Act.

(5) (i) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in confirming that the firm M/s Om Agencies,, is not engaged in actual business ignoring the fact that during the course of search on these firms substantial inventory in respect of the material being purchased by the assessee was found, which confirms the fact that these firms were doing actual business. (ii) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in rejecting that the inference drawn by the AO merely on the basis of a statement that these firms are not in actual business is baseless and contrary to the facts on record

6. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in rejecting the contention of the assessee in ignoring

the fact that the quantity purchased and sold being completely tallying, the allegation that the assessee has not made purchases cannot be sustained.

7. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in confirming the addition on account of bogus purchases, despite their being adequate material and evidences brought on record by the assessee before the AO to show that the purchases and sales were made in the regular course of business.

8. On the facts arid circumstances of the case, the learned CIT(A) has erred, both on facts and in law in rejecting the contention of the assessee that the addition so made on the basis of material collected at the back of the assessee, is bad in law and liable to be deleted.

The assessee filed return of income on 23.10.2007 at a total income of 3. Rs. 1,03,000/-. Assessment u/s 143(3) of the Act was completed on 24.11.2009 at a total income of Rs. 1,31,658/-. Subsequently, the Assessing Officer received an information from the Investigation Wing through CIT(Central)- New Delhi, as per which the appellant has obtained accommodation entries in the form of bogus purchases through various persons namely, Sh. Rakesh Gupta, Sh. Vishesh Gupta, Sh. Navneet Jain and Sh. Vaibhav Jain. Based on the information, the Assessing Officer reopened assessment u/s 147 of the Act and issued notice u/s 148 on 31.03.2014. During the course of assessment proceedings, the Assessing Officer issued a detailed show cause notice to the appellant on 20.02.2015 in which the details of the accommodation entries amounting to Rs. 7,44,644/- obtained by the appellant in the name of his proprietorship concern M/s Lakshmi Metal Traders from a concern namely, M/s Om Agencies, was furnished to the assessee and it was also stated that Sh. Rakesh Gupta and Sh. Vishesh Gupta have admitted to have provided accommodation entries in their statements recorded during the course of search proceedings u/s 132 and thereafter in the statements recorded by ACIT, Central Circle-10, New Delhi on 12.02.2013 and 04.02.2013 respectively. It was also stated that these persons have also filed affidavits in which they have confirmed that they were not making any actual sales but were issuing bogus purchase bills to provide accommodation entries. The appellant was asked to show cause why these purchases booked by the appellant amounting to Rs. 7,44,644/- be not treated as bogus purchases and be not added to the total income. The AO had also issued summons u/s 131 of the Act to Sh. Rakesh Gupta and Sh. Vishesh Gupta during the course of assessment proceedings in other cases pending before him and has recorded the statements in which they have reconfirmed the fact that they are providing accommodation entries and are not engaged in any actual sale. The appellant also failed to furnish the books of accounts before the AO. The AO was also not satisfied with the reply of the appellant and therefore, the AO has treated these purchases of Rs. 7,44,644/- as bogus purchases and has treated the same as income of the appellant u/s 69C of the Act.