9911796707
TMI Blog2017 (10) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... M.: This is an Appeal by the Assessee is directed against the Order by the Commissioner of Income Tax (Appeals)-42, Mumbai ('CIT(A)' for short) dated 28.12.2016 and pertains to the assessment year (A.Y.) 2009-10. 2. The issue raised is that the ld. CIT(A) erred in sustaining disallowance of 100% of bogus purchase, amounting to ₹ 22,39,511/-. The assessee has also raised ground challenging the reopening of this case. 3. In this case, the assessee is a Partnership Firm engaged in the business of manufacturing of ready-made garments. The assessee had filed its return of income for AY 2009-10 on 27/09/2009 declaring a total income of ₹ 21,17,592/-. The same was assessed under section 143(3) of the Act on 31/10/2011 at an income of ₹ 23,11,990/-. Subsequently, the Assessing Officer received information from the office of the DGIT(Inv) to the effect that the assessee has made bogus purchases and had taken accommodation bills of entry. The Assessing Officer reopened the assessment of the assessee after recording reasons. The assessee was found to have taken bills of purchase from the following hawala dealers: SL No. Name of Hawala Dealer Amount 01. Universal T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s claim of making purchases from the alleged hawala_dealer is not borne out. The onus was on the assessee to substantiate his return of income. A similar issue has been considered and rejected by the ITAT in the case of Sukh Ram v. ACIT (2007) 99ITP 417(Pen and by the Delhi High Court in 285 ITR 256 (Del) in the same case. In the Sukh Ram case the appellant had claimed that the cash found at his residence during the course of the search belonged to a political party. The AO recorded a statement of the party treasurer of the political party who refuted this claim. Before the ITAT and the High Court the assessee claimed that no addition can be made in his case unless he gets to cross-examine the party treasurer. This argument of the appellant in this case was rejected and it was held that when the AO merely seeks to verify the claim of the assessee, it is not akin to taking evidence behind the back of the assessee. In the present case also, the assessee was allowed full opportunity in the re-assessment as well as the appeal proceedings to justify and prove its purchases but it has failed to do so. The assessee could not substantiate its own sellers. The onus never left the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m any of the party. Assessee has also not been able to produce any of the parties. Necessary evidence relating to transportation of the goods was also not on record. In this factual scenario, it is amply clear that assessee has obtained bogus purchase bills. Mere preparation of documents for purchases cannot controvert overwhelming evidence that the providers of these bills are bogus and non-existent. 9. The Sales Tax Department in its enquiry has found the parties to be providing bogus accommodation entries. Assessee has not been able to produce any of the parties. Neither the assessee has been able to produce any confirmation from these parties. In such circumstances, there is no doubt that these parties are non-existent. I find it further strange that assessee wants the Revenue to produce assessee's own vendors, whom the assessee could not produce. The purchase bills from these nonexistent /bogus parties cannot be taken as cogent evidence of purchases. In light of the overwhelming evidence, the Revenue authorities cannot put upon blinkers and accept these purchases as genuine. This proposition is duly supported by Hon'ble Apex Court decision in the case of Sumati Dayal 214 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was returned to beneficiaries of bogus bills after deduction of their agreed commission. The Assessee was stated to be one of the beneficiaries of these bogus entries of sale of material from hawala entry operators in favour of the assessee wherein the assessee made alleged bogus purchases through these bogus bills issued by hawala entry providers in favour of the assessee. These dealers were surveyed by the Sales Tax Investigation Department whereby the directors of these dealers have admitted in a deposition vide statements/affidavit made before the Sales Tax Department that they were involved in. issuing bogus purchase bills without delivery of any material. There is a list of such parties wherein the assesses is stated to be beneficiary of bogus purchase bills. 12. From the above, I find that tangible and cogent incriminating material were received by the AO which clearly showed that the assessee was beneficiary of bogus purchase entries from bogus entry providers which formed the reason to believe by the AO that income has escaped assessment. The information so received by the AO has live link with reason to believe that income has escaped assessment. On these incriminating ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
