In a recent case, the Supreme Court dismissed the Special Leave Petition (SLP) which arose out of the impugned final judgment and order passed by the High Court of Gujarat wherein the Challenge against reopening of assessment on allegation of bogus purchase based on statement.
M/S Surya Impex, the petitioner challenged the high court order wherein the question was whether cross-examination is vital for making addition on the allegation of bogus purchase?
The Assessing Officer (AO) reopened the assessment under section 147 of the Income Tax Act, on the basis of investigation report alleging bogus purchase on the statement. The A.O made the addition of complete purchases of Rs. 8.10Cr on Unexplained expenditure etc. The Commisioner of Income Tax Appeal(CIT(A)) restricted the addition to 12.5%. The Income Tax Appellate Tribunal (ITAT) further restricted the addition to 6% and the Department moved to the High Court.
The High Court observed that assessee had neither been provided the copy of statement nor the opportunity of cross examination. In all cases , A.O & CIT (A) chosen to make additions at 3 to 5 % of bogus purchases & department could not show whether they have moved to HC or SC been provided the copy of statement nor the opportunity of cross examination.
A two judge bench of Justice B V Nagarathna and Justice Ujjal Bhuyan held that “In view of the dismissal of the SLP Diary No.29859/2023 following the said order, this special leave petition also stands dismissed.
Pending application(s), if any, shall stand disposed of.”
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