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TMI Blog2017 (12) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the present case, the assessee wants that the unassailable fact that the suppliers are non-existent and, thus, bogus should be ignored and only the documents being produced should be considered. This proposition is totally unsustainable in light of Hon’ble Apex Court decisions. - Decided against assessee. For A.Y. 2011-12 we direct that 6.5% disallowance for bogus purchase by the ld. Commissioner of Income Tax (Appeals) serves the interest of justice. The Hon'ble jurisdictional High Court in the case of Nikunj Eximp Enterprises (2013 (1) TMI 88 - BOMBAY HIGH COURT ) has also expounded that when sales are not doubted, 100% disallowance of purchase is not feasible. Although fact of the case were a little different as referred above. As regards the ground raised by the assessee that only 2% disallowance should be done following the Tribunal’s decision we are of the considered opinion that in our order we have followed Hon’ble High Court decision. In the hierarchy of judicial precedence, the decision of the higher court prevail over the tribunal decision. Hence, we dismiss these grounds raised by the assessee. - I.T.A. Nos. 2920 & 2921/Mum/2017, C.O. No.223/Mum/2017 And I.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ormation, the Assessing Officer issued notice u/s. 148 and reopened the case. 4. During the course of assessment proceedings, the Assessing Officer asked the assessee to furnish the supporting documents for purchases made from the above non genuine parties and also the supporting documents for corresponding sales affected. The assessee could only furnish the addresses of the above mentioned parties. The Assessing Officer in order to verify the genuineness of the purchases issued notices u/s. 133(6) to the purchase parties but the same were returned unserved by the postal authorities with the remarks not known or left. The Assessing Officer held that the onus is on the assessee to substantiate and prove the genuineness of the claim which the assessee failed to do. The assessee could not file the vital documents such as delivery challans, transport receipt, octroi receipts, goods inward register, etc. In view of this, the Assessing Officer felt that the purchases shown by the assessee were not genuine and after rejecting the books of accounts u/s. 145(3), he made an addition of 12.5% of the total alleged bogus purchases, i.e., ₹ 46,85,809/-. 5. Against the above order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 365 ITR 233(All.) wherein the Hon'ble High Court held AO should have relevant and credible material with him to form requisite reason to believe that income of assessee has escaped assessment. Material available on record has rational connection and relevant bearing on such formation of belief for issuing valid notices for re-assessment- sufficiency or correctness of material was not to be considered at this stage. 2) Sun Pharmaceuticals Industries Ltd. Vs. DCIT 353 ITR 474 (Guj.) where the Hon'ble High Court held formation by belief by AO is essentially within his subjective satisfaction - at the stage of issue of notice, only question is whether there was relevant material on which reasonable person could have formed requisite belief. 3) Industries Ltd. vs. ITO 362 ITR 542 (Guj.) where the Hon'ble HC held if a particular issue is brought to the notice of the AO. by audit party and AO of his/her application of mind finds this ground as valid, reopening of assessment cannot be quashed merely because such ground was brought to the notice of AO by the audit party. 4.3.1. The Ld. counsel for the appellant also relied on the judgment in the case of CIT vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch factual scenario, the assessing officer has made the necessary enquiry. The issue of notice to all the parties have returned unserved. Assessee has not been able to provide any confirmation from 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 the assessee has obtained bogus purchase bills. Mere preparation of documents for purchases cannot controvert overwhelming evidence that the provider of these bills is bogus and non-existent. 9. The Sales Tax Department in its enquiry has found the parties to be providing bogus accommodation entries. The assessing officer also issued notices 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. 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. We find it further strange that assessee wants the Revenue to produce assessee s own vendors, whom the assessee could no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 06.04.2015 whereby the Supreme Court has dismissed the SLP confirmed the order dated 09.12.2014 passed by the Gujarat High Court and other decisions of the High Court of Gujarat in the case of Sanjay Oilcake Industries Vs. Commissioner of Income Tax (2009) 316 ITR 274 (Guj) and N.K. Industries Ltd. Vs. Dy. C.I.T., Tax Appeal No.240/2003 decided on 20.06.2016, the parties are bound by the principle of law pronounced in the aforesaid three judgments. 13. However, we note that this is not an appeal by the Revenue. Hence, it will not be appropriate to take away the relief already granted by the Revenue to the assessee. Hence, we confirm the order of ld. Commissioner of Income Tax (Appeals). 14. In the result this appeal filed by the assessee stands dismissed. ITA No. 2921 3325/Mum/2017 and CO No. 223/Mum/2017 (A.Y. 2011-12) 15. These are cross appeals by the assessee and the Revenue and Cross objection by the assessee directed against the order of the ld. Commissioner of Income Tax (Appeals), pertaining to the assessment year 2011-12. 16. The issue raised in the assessee s appeal is that the ld. Commissioner of Income Tax (Appeals) erred in sustaining 6.5% ..... X X X X Extracts X X X X X X X X Extracts X X X X
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