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TMI Blog2017 (5) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... .N.PRASAD, JUDICIAL MEMBER AND SHRI N.K.PRADHAN, ACCOUNTANT MEMBER For The Appellant : Shri Satya Prakash Singh For The Respondent : Shri BS Bist ORDER Per Bench All these appeals are filed by the Assessee against the order of the Ld. CIT (Appeals)-13, Mumbai dated 21.10.2014 for the assessment years 2006-07 to 2009-10 arising out of the assessment orders passed u/s 143(3) r.w.s 147 of the Act. 2. The only issue in all these appeals of the Assessee is directed against the order of the Ld. CIT (Appeals) in confirming the addition made towards bogus purchases. 3. Briefly stated, the facts are that the Assessing Officer reopened all these assessments for the assessment years 2006-07 to 2009-10 by issue of notice u/s 148, on the basis of information received from the sales tax department where a survey was conducted by the Investigation Wing in respect of certain dealers who said to have been deposed that they have provided only accommodation entries. The Assessing Officer reopened assessments of the Assessee, believing that the Assessee was provided only accommodation entries from those parties where investigation was conducted by Sales Tax Department and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the information relating to the purchases, therefore not genuine. He submits that the findings of the Ld. CIT (Appeals) that the Assessee not produced any information relating to purchases before the Assessing Officer is contradictory when the Assessing Officer himself reproduced what has been submitted by the Assessee in the course of assessment proceedings. 5. The Ld. Counsel for the Assessee further submits that the additions/disallowances were made based solely on the information received from the Sales Tax Department that certain suppliers provided only accommodation entries and not supplied any goods. The Ld. Counsel submits that the Assessee was not confronted with the information said to have been received by the Assessing Officer from Sales Tax Authorities regarding M/s Manav Impex and the statement said to have been recorded from them. No opportunity for cross examination was given to the Assessee. Additions were made based only on the information received from Sales Tax Department without confronting such information received by the Assessing Officer from the Sales Tax Department nor providing any opportunity for cross examination of the party. The Ld. Counsel submits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow and the material available on record. It is very much apparent from the assessment order that the basis for treating the purchases made by the Assessee from M/s Manav Impex as mentioned in the assessment orders is only the information obtained by the Assessing Officer from Sales Tax department. We find that this information was not parted to the Assessee by the Assessing Officer. It is also not known as to what kind of information the Assessing Officer has got from the Sales Tax department relating to the present Assessee before us. Solely based on certain information said to have been obtained from Sales Tax department, Assessing Officer made addition. The Assessing Officer had made no efforts to issue even notices under section 133(6) of the Act to the supplier to make any further enquiries about supplies made by it to the Assessee. Thus, it is apparent that sole basis of addition is only the information obtained from the Sales Tax department by the Assessing Officer. 8. The Assessee for whatever reason might not have produced the parties for verification may be due to lapse of time or may be due to the dealers shifting from their business premises etc., but he has produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Assessing Officer has not doubted the sales effected by the assessee. Thus, it is logical to conclude that without corresponding purchases being effected the assessee could not have made the sales. Moreover, the Assessing Officer has not brought any material on record to conclusively establish the fact that purchases are bogus. Merely relying upon the information from the Sales Tax Department or the fact that parties were not produced the Assessing Officer could not have treated the purchases as bogus and made addition. If the Assessing Officer had any doubt with regard to purchases made, it was incumbent upon him to make further investigation to ascertain the genuineness of the transactions. Without making any enquiry or investigation the Assessing Officer cannot sit back and make the addition by simply relying upon the information obtained from the Sales Tax Department and issuing notices under section 133(6) of the Act. As the Assessing Officer has failed to make any enquiry or investigation to prove the fact that the purchase transactions are not genuine whereas the assessee has brought documentary evidences on record to prove genuineness of such transactions which are no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid more than 4% i.e., 12.5%. We wonder, how these bills becomes bogus where no set off was taken and sufficient proof has been given to their Dept. even for materials purchased under 12.5% VAT. We have given enough evidence that in matter of purchase of marble (Navodaya Trade) Stainless Steel pipe (Nutan Metals) wherein it was explained that the material was actually received at various sites, the material was consumed and the same was also certified by the architect appointed by the customers. We have also shown payment received from clients after certified by Architect as used in the respective work and tallies with the record. Regarding Brick suppliers Regal Bricks Sand Suppliers, we have not purchased any material from this party during the period. Thus, we presume that, perhaps sales tax dept. forwarded such unscrutinized matters to I.T. Dept. which again says the bills as bogus. I am submitting following documents in support of our claim. (i) Our statement of facts; (ii) Our different correspondence with sales tax dept. (a) Letter dated 10.09.2012, 22.09.2012, 05.10.2012, 17.10.2012, 21.12.2012. (b) Our Advocate letter dated 10.09.2012 17.09 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h such fact. Moreover, the allegation of the assessee that the Assessing Officer had not confronted him the adverse materials nor provided an opportunity to cross examine the dealers, who admitted of having provided accommodation bills is well founded. As we have noted earlier, in the course of assessment proceedings, the assessee had not only requested the Assessing Officer to allow him to verify the adverse material in his possession but has also requested for cross examination of the dealers whose affidavit / statements were relied upon to infer bogus purchase. However, it is apparent on record, the Assessing Officer has not confronted the adverse materials, if any, in his possession to the assessee nor has allowed him to cross examine the dealers who allegedly admitted of having provided accommodation bills without actual delivery of goods. That being the case, the inference drawn on the basis of adverse materials without confronting them to the assessee is in gross violation of rules of natural justice. Furthermore, not granting opportunity to the assessee to cross examine the dealers who allegedly admitted of having provided accommodation bills also vitiates the proceedings, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... genuineness of assessee s claim. Without making any enquiry / investigation and by merely relying upon the information supplied by the DGIT (Inv.), who in turn had obtained such information from sales tax authorities, in our view, is not enough to prove the purchases as bogus. Without bringing sufficient evidence on record to falsify assessee s claim of purchases from the concerned dealers, the conclusion drawn on the issue of bogus purchases, in our view, is more on conjecture and suspicion rather than on strong evidence. In the course of hearing, the learned Authorised Representative has produced a comparative chart showing the gross profit rate shown by the assessee in the assessment years under appeal and the percentage of disallowance. It is relevant to reproduce the said chart hereunder: Details of purchase and sales A.Y. Total Sales Total Exp. Gross profit Gross profit Rate Total Purchase Addition by A.O. % of Dis-allowance 2009 10 269,069,179 219,395,082 49,674,098 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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