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TMI Blog2017 (11) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation the assessment was reopened u/s. 147 of the Act and in the course of re-assessment proceedings the assessee was required to prove the genuineness of the purchases made from various parties referred to in Page No. 2 of the Assessment Order. The assessee submitted various details like copies of invoices, delivery challans, goods received notes, certificate from bank and confirmations from the suppliers along with ledger account copies and submitted that the purchases made by the assessee are genuine. However, the Assessing Officer rejected the submissions of the assessee holding that no lorry receipts, proof of transport of material, octroi receipt etc has been furnished. He also observed that one Mr. Naresh M. Budela and Propritor Rupesh J. Sanghvi deposed before the Sales Tax Department that they were actually not doing activity of sales and purchases of goods and were indulged only in providing Paper Book bills and it was stated by the Assessing Officer that the said parties from whom the Assessee made the purchases are running the above concerns. Therefore, he concluded they are only dubious persons and there were no real transactions carried on by them and hence the purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Paper Book submits that the Sales Tax Department had in fact allowed set off of taxes and the party wise details were given to show that the purchases are genuine and they did not avoid payment of Sales Tax. Further, Learned Counsel for the assessee submits that it is the observation of the Assessing Officer that there were no lorry receipts furnished by the assessee to which he submits that since assessee made some local purchases there were no lorry receipts. 7. We have heard the rival submissions, perused the orders of the authorities below. This aspect of the matter has been elaborately considered with references to the evidences furnished by the assessee by the Ld.CIT(A) and concluded that the purchases are genuine observing as under: "3.3 Decision - I have carefully considered the AO's order as well as the AR's submissions. The AO has made the addition in question on account of two principal reasons. Firstly, the DCST had raised a demand of 29.17 lakhs in the appellant's case while finalizing the Sales Tax assessment. Secondly, according to the AO, information had been received from Sales Tax Department that six parties (which have been listed earlier in parag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... second principal reason for the AO to have made the impugned addition of 43.67 lakhs, it can be seen that this matter also needs some elucidation. According to the AO, certain information had been received from the Sales Tax Department that the appellant had made bogus purchases to the extent that there was no actual movement of goods and only accommodation entries had been taken. As seen from the order of the AC at paragraph no. 6.3(111), the statements of S/Shri N. M. Budela and R. K. Sanghvi had been recorded by the Sales Tax authorities. These statements had revealed that they were not actually engaged in either sales or purchases of goods but were engaged in the business of providing accommodation bills. It is however nowhere clear in the assessment order as to how the statements of S/Shri N. M. Budela and R. S. Sanghvi have any connection with the appellant, since no proof has been brought on record that the appellant had any dealings with either them of them. Moreover, copies of these statements have never been provided to the appellant which has also not been given any chance of cross-examination of these two persons. Coming to the six parties from whom bogus purchases had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court had observed that merely because the supplier had not appeared before the AO, it cannot be concluded that purchases had not been made by the assessee. Such disallowance made merely on the basis of assumptions - which were made because of non-production of sellers - was held to be untenable. In the case under consideration I have noted that matters have not even progressed to that level. Rather the appellant has not been confronted with any statements of the allegedly bogus parties. It has not even been asked to produce these parties. On the other hand, there is no evidence to suggest that the AO had either made independent inquiries through his Inspector or had sought to summon the alleged hawala parties to record their statements under the Act. The appellant has naturally not been allowed any opportunity to cross-examine them either. The presumption was that the information received from the Sales Tax Department was absolutely correct and reliable and that it needed no further verification or corroboration. So much so that that information has not even been reproduced in the order. Rather it has been simply mentioned that certain information had been received. Here it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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