Santosh Laujari Gupta Vs ITO – 33(3)(3)

Parties Involved

Facts Summary

The assessee, Santosh Laujari Gupta, is running a proprietorship concern named M/s. Meltstar Metals, trading in iron and steel. During the assessment year 2009-10, the Assessing Officer (AO) received information from the DGIT investigation wing Mumbai indicating that the assessee was involved in taking accommodation entries from Hawala dealers identified by the Maharashtra sales tax department. The AO found that the assessee had made bogus/non-genuine purchases from five parties totaling Rs. 1,36,10,689/-. The AO issued notices under section 133(6) of the Act, but these notices were unserved. Additionally, the TINs of these parties were cancelled, and the assessee failed to produce them. The sales tax department had listed these parties as 'bogus and non-genuine'. During the assessment, the assessee could not produce the required bills or substantiate genuine transactions. Consequently, the AO rejected the books of accounts and estimated the gross profit at 8% instead of the 4% shown by the assessee.…

Legal Issues

• 1. Whether the Commissioner of Income Tax (Appeals) erred in confirming the rejection of the books of accounts and estimating the rate of gross profit at 8%.
• 2. Whether the Commissioner of Income Tax (Appeals) erred in confirming the rejection of books of accounts by invoking provisions of section 145(3) of the Act.
• 3. Whether the proceeding initiated under section 147 of the Act and issuance of notice under section 148 of the Act is in conformity with the provisions of the Act.
• 4. Whether the notice issued under section 148 of the Act is without jurisdiction and not in conformity with provisions of the Act.
• 5. Whether the impugned assessment order is illegal and void ab-initio due to failure to issue notice under section 143(2) of the Act within the stipulated time limit.
• 6. Whether the order made under section 143(3) read with section 147 of the Act is illegal, bad-in-law, ultra vires, and liable to be annulled.

Judgment Outcome

Decided in favour of Assessee.

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