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TMI Blog2017 (10) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... otice u/s 148 by the AO for the AY 2009-10 and 2011-12 are dismissed. For estimation of NP on bogus purchases it is the duty of the AO to enforce attendance of a witness if his evidence is material. At the same time the assessee must furnish the complete address of such person.A proper hearing must always include a fair opportunity to those who are parties in the controversy for correcting or contradicting anything prejudicial to their view. Cross-examination is allowed by procedural rules and evidently also by the rules of natural justice. Any witness who has been sworn on behalf of any party is liable to be cross-examined on behalf of the other party to the proceedings. In view of the above, we set aside the order of the Ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 1,95,17,832/- to ₹ 11,71,069/- in A.Y 2011-12 without appreciating the decision of the Hon ble Gujarat High Court and approved by the Hon ble Supreme Court in the case of N.K. Proteins Ltd. vs. DCIT in SLP (CC No.769 of 2017) wherein it has been held that when the entire purchases have been found to be bogus then confirming disallowance on percentage basis goes against the principle of section 68 and 69C. 4. Let it be stated that the facts for both the assessment years are similar. We begin with the AY 2009-10. Briefly stated, the facts of the case are that the Assessing Officer (AO) received information from the Sales Tax Department, Government of Maharashtra that the assessee had obtained bogus purchase bills from the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. Amount in Rs. 1 2 3 4 5 27910623885V DONEAR TRADING PVT. LTD. AACCD4946K 2011-12 3,393,447 27050634058V LINUS SALES AGENCY PVT. LTD. AABCL2934N 2011-12 3,409,568 27190653866V UNIVERSAL TRADING COMPANY AJIPJ7859H 2011-12 307,652 27530620893V VRUKSHA ENTERPRISES BGMPS2816M 2011-12 4,160,944 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings, the AO asked the assessee to file copies of purchase bills, lorry receipts, octroi payment receipts in respect of the said transactions with the above parties during the year under consideration. Then the AO issued notice u/s 133(6) to the above parties to verify the genuineness of the transactions. Most of the notices issued by him were returned back by the postal authorities as unserved. The AO also observed that the assessee was not able to produce the copies of confirmation from the above parties regarding goods purchased and also the ledger extract of the assessee in the books of the above parties. In view of the above facts, the AO made an addition of ₹ 71,25,181/- u/s 69C to the total income shown by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our decisions are given below. Regarding the objection raised by the assessee to the reopening u/s 147/148 we may mention here that the return of income filed by the assessee for the AY 2009-10 and 2011-12 were processed u/s 143(1) only. In the case of ACIT vs. Rajesh Jhaveri Stock Brokers P. Ltd. 291 ITR 500 (SC), the Hon ble Supreme Court has held that information u/s 143(1)(a) is not an assessment and the notice u/s 148 issued by the AO was valid. Therefore, in the instant case after receipt of information from the Sales Tax Department, Government of Maharashtra, the AO has rightly issued the notice u/s 148. Thus the ground raised by the assessee against the issuance of notice u/s 148 by the AO for the AY 2009-10 and 2011-12 are dismi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is allowed by procedural rules and evidently also by the rules of natural justice. Any witness who has been sworn on behalf of any party is liable to be cross-examined on behalf of the other party to the proceedings. The Hon'ble Supreme Court in State of Kerala vs. K.T. Shaduli Grocery Dealer AIR 1977 SC 1627, recognised the importance of oral evidence by holding that the opportunity to prove the correctness or completeness of the return necessarily carry with it the right to examine witnesses and that includes equally the right to cross-examine witnesses. In ITO vs. M. Pirai Choodi (2012) 20 taxmann.com 733 (SC), the Hon'ble Supreme Court has held that Order of assessment passed without granting an opportunity to assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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