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TMI Blog2017 (11) TMI 318X X X X Extracts X X X X X X X X Extracts X X X X ..... s to these parties at the addresses provided by the assessee. All these notices have returned unserved. Assessee has not been able to produce any of the parties. The assessing officer has noted that there is no cogent evidence of the provision of goods. 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 venders, whom the assessee could not produce. The purchase bills from these non-existent / 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. - Decided against assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties for verification for which it has expressed its inability to produce them before the Assessing Officer. Therefore, the Assessing Officer concluded that the assessee has obtained bogus purchase bills to reduce profits by inflating purchases. By following the decision of Hon'ble High Court of Gujrat in the case of Simit P Seth, 2013 (356 ITR 451), the Assessing Officer has disallowed 12.5% of bogus purchase of ₹ 2,31,56,224/-which works out to ₹ 28,94,5287- as unexplained income. 4. Against the above order, the assessee appealed before the ld. CIT(A) who restricted the addition to 6.5% of the bogus purchase. 5. Against the above order of ld. CIT(A), the assessee is in appeal before the ITAT. 6. I have heard the ld. Departmental Representative and perused the records. This case has been fixed for hearing earlier also and was adjourned at the request of the assessee. Today also despite notice none appeared on behalf of the assessee. Hence, the appeal is being disposed of by hearing the ld. Departmental Representative and perusing the records. 7. As regards the ground challenging the reopening of the assessment, the ld. CIT(A) has noted that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t escapement of income and the same is not required to be proved to the guilt. In this regard, I refer to the decision of the Hon'ble Apex Court in the case of CIT(A) Vs. Rajesh Jhaveri Stock Brokers P. Ltd, 291 ITR 500:- "Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to lax if he has reason to believe that income for any assessment year has escaped assessment. The word "reason" in the phrase "reason to believe" would mean cause or justification. If the AO has cause or justification to know or suppose (hat income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the AO should have finally ascertained the fact by legal statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. As observed by the Supreme Court in Central Provinces Managnese Ore Co, ltd. v. ITO(1991) 191 ITR 662, for initiation of action under section 147(a) (as the provision stood at the relevant time) fulfillment of the two requisite conditions in that regard is essential. At that stage, the final outcome of the proceeding is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as noted that there is no cogent evidence of the provision of goods. 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 venders, whom the assessee could not produce. The purchase bills from these non-existent / 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 ITR 801 and Durga Prasad More 82 ITR 540. In the present case the assessee wants that the unassailable fact that the suppliers are nonexistent and thus bogus should be ignored and only the documents being produced should be considered. This proposition is totally unsustainable in light of above Apex Court decisions. 12. I further find that Hon'ble jurisdictional High Court in the case of Nikunj Enterprises has upheld 100% allowance for the purchases when the sales have not been doubted. However, the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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