Chander Bhan Yogesh Kumar Vs. Principal Commissioner of Income Tax, Delhi-10

Parties Involved

Facts Summary

The assessment for AY 2018-19 in the case of assessee was reopened on the basis of information received that the assessee was one of the beneficiaries of fake claim of input tax credit in lieu of commission. The case of Revenue is that the assessee has obtained bogus purchase entries to the tune of Rs.42,50,404/- from M/s. Jai Bhagwati Sales during FY 2017-18 i.e. relevant to AY 2018-19. During the course of reassessment proceedings, the assessee furnished various documents to prove genuineness of the transaction of purchases. The Assessing Officer (AO) held that the assessee has made claim of Rs.42,50,404/- bogus purchases and made addition by applying GP rate of 12.5%. The PCIT invoked the provisions of section 263 of the Act and held that the AO should have taxed entire bogus purchases amounting to Rs.42,50,404/- u/s.69C r.w.s. 115BBE of the Act.…

Legal Issues

• 1. Validity of revisional powers u/s. 263 of the Act exercised by the PCIT
• 2. Whether the entire bogus purchases should be added or only the profit element

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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