{"id":59599,"date":"2026-04-17T12:22:28","date_gmt":"2026-04-17T06:52:28","guid":{"rendered":"https:\/\/itatonline.org\/digest\/pcit-v-purple-suppliers-p-ltd-2025-306-taxman-145-cal-hc\/"},"modified":"2026-04-17T12:22:28","modified_gmt":"2026-04-17T06:52:28","slug":"pcit-v-purple-suppliers-p-ltd-2025-306-taxman-145-cal-hc","status":"publish","type":"post","link":"https:\/\/itatonline.org\/digest\/pcit-v-purple-suppliers-p-ltd-2025-306-taxman-145-cal-hc\/","title":{"rendered":"PCIT v. Purple Suppliers (P.) Ltd. (2025) 306 Taxman 145 (Cal.)(HC)"},"content":{"rendered":"<p>The AO initiated reassessment proceedings based on information received from the investigation wing. The AO initiated the proceedings on the ground that the\u00a0<strong>genuineness of purchases<\/strong> was doubtful. However, while doing so, the AO\u00a0<strong>accepted the corresponding sales transactions<\/strong>\u00a0entered into with the same parties as well as with other parties, thereby acknowledging that the assessee was carrying on genuine business activities.<\/p>\n<p>The Court held that the reopening was sought on the basis of a\u00a0<strong>mere suspicion<\/strong><strong>. <\/strong>The Court held that<strong>\u00a0<\/strong><strong>reassessment can be initiated only on the basis of \u201creason to believe\u201d and not \u201creason to suspect\u201d<\/strong><strong>,<\/strong> and that mere suspicion of possible escapement of income does not justify reopening of a completed assessment. The High Court further noted that there was\u00a0<strong>no failure on the part of the assessee to fully and truly disclose all material facts<\/strong><strong>\u00a0<\/strong>necessary for the assessment. The transactions relating to purchases and sales had already been\u00a0<strong>scrutinised in the original assessment under section 143(3)<\/strong>\u00a0and were not disputed by the Revenue.<\/p>\n<p>The High Court also observed that the Tribunal failed to appreciate that the Assessing Officer had concluded escapement of income\u00a0<strong>without properly considering the material already available on record<\/strong><strong>.<\/strong> Additionally, the statements recorded during the search were\u00a0<strong>retracted within one month<\/strong><strong>, <\/strong>and neither the Assessing Officer nor the CIT (A) dealt with the issue of such retraction. Accordingly, the reopening of the assessment was held to be\u00a0<strong>i<\/strong><strong>nvalid<\/strong>, and the reassessment proceedings were quashed. (AY.2011-12,2012-13,\u00a0 2013-14)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>S. 147: Reassessment-After the expiry of four years-Alleged bogus purchases-Unexplained expenditure-Full disclosure-Reason to suspect-Order of Tribunal quashing the reassessment order was affirmed. [S.69C, 148, 260A] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-59599","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-fvh","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/59599","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=59599"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/59599\/revisions"}],"predecessor-version":[{"id":59600,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/59599\/revisions\/59600"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=59599"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=59599"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=59599"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}