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2019 (6) TMI 839 - AT - Income TaxBogus purchases - hawala Purchases - HELD THAT - The assessee nowhere adduced any kind evidence on record to justify the claim. Nothing was adduced before the AO and the assessee did not maintain the stock details i.e. the details of opening stock, purchases, consumption, sales and closing stock nor has he produced any evidence of the goods being received by him except entry of self-made inward register. Considering all CIT(A) confirmed the addition to the whole bogus purchase of ₹ 6,04,182/-. The facts are not distinguishable at this stage also. Even before us, the assessee nowhere appeared and produced any evidence of any kind in support of his claim. We confirm the finding of the CIT(A) on this issue and decide this issue in favour of the revenue and against the assessee.
Issues Involved:
1. Confirmation of addition on account of alleged hawala purchases. 2. Justification of the addition based on evidence and legal precedents. Issue 1: Confirmation of Addition on Account of Alleged Hawala Purchases The assessee filed returns for the assessment year 2009-10 declaring an income of ?9,56,900/-. The case was reopened under Section 148 based on information from the Sales Tax Department of Maharashtra, which indicated that the assessee was a beneficiary of bogus purchase bills amounting to ?6,04,182/- from three parties: Modern Traders, Kludee Sales, and Millenium Enterprises. Despite notices under Sections 143(2) and 142(1), the assessee failed to respond or appear before the Assessing Officer (AO), leading to the addition of ?6,04,182/- to the assessee's income. The CIT(A) upheld this addition, prompting the assessee to appeal to the ITAT. Issue 2: Justification of the Addition Based on Evidence and Legal Precedents The ITAT reviewed the arguments and evidence presented. The CIT(A) had noted that the Sales Tax Department recorded statements from the alleged suppliers, who admitted to issuing bogus bills without actual supply of goods. The assessee failed to provide credible evidence to counter these findings, such as confirmation from suppliers, transportation details, or stock registers. The CIT(A) referenced several legal precedents, including the Bombay High Court's decision in CIT vs. Nikunj Eximp Enterprises Pvt. Ltd., which required substantial evidence to prove genuine transactions. However, the assessee's case lacked such evidence. The CIT(A) also cited the Gujarat High Court's decision in N.K. Proteins Ltd vs. DCIT, which emphasized that once purchases are proven bogus, the entire amount should be disallowed under Section 69C. The ITAT concurred with the CIT(A)'s findings, noting the absence of stock details and other corroborative evidence from the assessee. Consequently, the ITAT confirmed the addition of ?6,04,182/- as bogus purchases, dismissing the assessee's appeal. Conclusion In summary, the ITAT upheld the CIT(A)'s decision to confirm the addition of ?6,04,182/- on account of bogus purchases, citing the lack of evidence from the assessee and supporting legal precedents. The appeal for the assessment year 2010-11 was similarly dismissed based on identical facts and reasoning.
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