Income Tax Act, 1961 – Sections 143(3) and 147 – Reopening of assessment – Validity – Appellant/assessee firm which is engaged in business of a builder and developer had filed its return of income for AY 2008-09 – AO completed assessment under Section 143(3) of the Act – On basis of information that assessee received on-money on sale of property, AO reopened case of assessee under Section 147 of the Act – AO completed reassessment under Section 143(3) read with Section 147 of the Act by making addition of undisclosed income – CIT(A) dismissed appeal filed by assessee – Whether CIT(A) has erred in confirming validity of reassessment proceedings initiated by AO under Section 147 of the Act – HELD – Assessee has assailed validity of reassessment proceedings on ground that AO had initiated reassessment proceedings in absence of sufficient material which would have led him to arrive at a bonafide belief that income of assessee chargeable to tax had escaped assessment – AO was informed that sale transaction was executed by assessee firm – AO had sufficient reasons to believe that assessee which had accounted for aforesaid sale transaction had suppressed sale consideration to some extent – Material before AO was sufficient enough for him to arrive at a bonafide belief that income of assessee chargeable to tax had escaped assessment within meaning of provisions of Section 147 of the Act for year under consideration – After considering reasons to believe, CIT had granted sanction for reopening of concluded assessment – Findings rendered by CIT(A) on this issue uphold – Appeal dismissed. Issue 2: Addition of undisclosed income – Whether CIT(A) has erred in confirming action of AO of taxing alleged undisclosed income in hands of Appellant – HELD – As per Agreement to Transfer and Assign, assessee firm was vested with rights, interest and benefits in respect of Plot from a Co-operative Housing Society for a consideration – On basis of an Agreement of Assignment-Cum-Sale, assessee had transferred all its rights, interest and benefits in respect of aforesaid Plot to buyer for an ostensible consideration – Assessee was the de facto owner of Plot in question on date of sale of same to buyer – Notings in document seized from premises of buyer clearly points out undisclosed consideration – In course of search proceedings, buyer had categorically admitted payment of on-money for purchase of property in question – When assessee had accounted for part sale consideration received from buyer in its books of accounts, there is no justification on its part to distance itself from unaccounted sale consideration, i.e, on-money received from said buyer – There is no infirmity in view taken by CIT(A) that cash component of sale consideration on account of sale of Plot had to be taxed in hands of assessee – Impugned order passed by CIT(A) affirmed.
Income Tax – Bogus purchases – Upward adjustment – Appellant/assessee is engaged in trading of edible oils, guar seed and other products – Assessee has claimed to have made purchases with its associates enterprises – After detailed examination, Transfer Pricing Officer (TPO) found transaction to be bogus and proposed upward adjustment – AO completed assessment by incorporating adjustment proposed by TPO – Dispute Resolution Panel (DRP) affirmed action of AO – Whether DRP has erred in confirming addition made by AO on account of bogus purchases – HELD – During year under consideration, assessee has claimed to have made transaction of high seas purchase and sale of commodities – Date of purchase as per invoice copy submitted by assessee was different from date of purchases as per invoice copy of third party – Since dates as mentioned by assessee in invoice did not match with date of purchase of original buyer, same could not be treated as high seas purchase, as same was bogus purchase shown by assessee – AO, TPO as well as DRP have dealt with issue in detail and thereafter, they have given a clear cut finding that transactions are bogus – Upon carefully considering orders of lower authorities, it is evident that all issues raised by assessee have been answered elaborately and these orders do not need any interference – Appeal dismissed.