The issue of notice u/s. 148 was held to be erroneous, illegal and impermissible under the law and deserved to be quashed because:

(a) the Assessing Officer without making any independent enquiry started proceedings merely on the basis of information received from the other ITO.

(b) in the reasons recorded, neither was there any discussion nor had anything been brought on record to show which particular transactions relating to purchases made by the assessee were not genuine or bogus.

(c) That the Assessing Officer did not make any comment on the contents of the reply of the assessee and had solely passed his order on the basis of the report of the ITO and proceeded to make the addition. All the purchases were fully vouched, payments had been made through account payee cheque and the details had been duly submitted and no fault or defect pointed by the Assessing Officer. The accounts of the assessee were duly audited. The closing stock as reflected in the balance-sheet had been duly accepted. The Assessing Officer had not pointed out any defect in the maintenance of the books of account. Therefore, on the merits also, the addition was not sustainable and was to be deleted. (AY.  2010-11)