M/S. SHAKAMBHARI ISPAT & POWER LTD., ,KOLKATA vs. DCIT, CENTRAL CIRCLE 3(3), , KOLKATA

Without prejudice to Grounds No. 6 to 9 above, AO didn't even issue notices to alleged transactions of such coal and Ld. CIT(A) erred in not appreciating the same and hence it may be held accordingly.

Without prejudice to Grounds No. 6 to 10 above, the entire addition made by AO in such respect is without allowing cross examination of the third party so involved and such action of AO & CIT(A) is bad in law and it may be held accordingly.

Without prejudice to Grounds No. 6 to 11 above, the rate of gross profit so considered by CIT(A) has no legal basis and such action of CIT(A) is bad in law and it may be held accordingly.

For that in view of the facts and in the circumstances, the Ld. CIT(A) erred in not appreciating that alleged sum of Rs. 8,52,00,000/- was not at all related to / pertain to appellant and such addition was wrongly made by AO without any independent. examination of material or such 3rd party and Ld. CIT(A) was unjustified in treating such sum as part of alleged undisclosed purchase although there was no such purchases as contended in Grounds No. 6 to 11 above and it may be held accordingly.

For that in view of the facts and in the circumstances, the Ld. AO was wholly unjustified in making addition of Rs., 1,20,95,958/- [treating the purchases made from Reeja Trading Private Ltd. as bogus purchase) merely based on the report of CGST Department without conducting any enquiry. /Verification of his own and in view of the facts and in the circumstances the addition so made is liable to be deleted and it may be held accordingly.

Without prejudice to Ground No. 14 above, the Ld/ CIT(A) erred in affirming the action of AO in not appreciating that the said vendor (i.e. Reeja Trading Private Ltd.) had duly filed its income tax return and ROC return nd had made other statutory compliances and merely based on the CGST Department the existence of the said vendor and the consequent purchases cannot be held as bogus and such action is bad in law and in view of the facts and in the circumstances the addition so made is liable to be deleted and it may be held accordingly.

Without prejudice to Grounds No. 14 & 15 above, the payment made to the said vendor (i.e. Reeja Trading Private Ltd.) were through banking channel and the CGST/SGST has been duly paid on such purchases and as such the existence of said party cannot be doubted and the necessary evidence in such respect were duly placed before the AO when AO failed to consider and in view of the facts and in the circumstances the addition affirmed by Ld. CIT(A) is liable to be deleted and it may be held accordingly.

For that your petitioner craves the right to put additional grounds and/or to alter/ amend/modify the present grounds at the time of hearing. Ground Nos.1 to 5 are against the order of the Id. CIT(A) in confirming the re-opening of reassessment u/s.147 of the Act based on invalid notice issued by the AO u/s.148 of the Act dated 06.09.2022

Facts in brief are that the assessee company filed its return of income u/s 139(1) of the Act for the assessment year under consideration on 31.10.2019 declaring total income of Rs.17,25,39,330/- under normal provision and Rs. 51,82,85,619/- as per section 115JB of Income Tax Act, 1961. The return was processed u/s 143(1) of the Act on 03/06/2020. The assessee company was engaged in manufacturing of TMT Bar, Billets, Ingots, Sponge Iron, Ferro Alloy and generation of Captive Power Plant etc, and also engaged in trading activities of Iron Steel Products. A search & seizure operation u/s 132 of the Act, 1961 was conducted on Agarwal Group and its associates by the Directorate of Investigation, Kolkata on 17.09.2021 and on subsequent dates. Being one of the associate members of the above group, the assessee was also covered in search by executing a warrant. Pursuant to the search & seizure operation, the case of the assessee was re-opened u/s 147of the Act after taking approval from the competent authority and notice u/s 148 of the Act was issued and served upon the assessee on 06.09.2022 asking the assessee to file return of income within 30 days from the receipt of the notice. On 13.10.2022 the assessee has filed return u/s 148 of the Act declaring total income same as originally filed u/s 139(1) of the Act dated 31.10.2019. Thereafter, statutory notices u/s 143(2) of the Act dated 11.11.2022 and notice u/s 142(1) of the Act dated 12/01/2023alongwith a set of questionnaire were issued and duly served upon the assessee. Finally, the assessment was completed vide order dated 28.07.2023 u/s.143(3)/147 of the Act by making various additions.

In first appeal, the Id. CIT(A) upheld the notice issued u/s.148 of the Act and the consequent proceedings and the assessment framed by the AO on the ground that notice was validly issued and there is no infirmity in the same.

Aggrieved with both the orders of the authorities below, the assessee is in further appeal before the Tribunal.

Ld. AR vehemently submitted that the re-opening of assessment was made invalidly without satisfying the conditions precedent to issue of notice u/s 148 of the Act. The Id AR submitted that during the course of search operation no incriminating materials/documents were found and seized. Therefore the re-opening of assessment is bvad in law and so is assessment framed. The Id AR made very elaborate and lengthy submissions which are extracted as under :-