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TMI Blog2018 (1) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... ed bogus purchases. The reasons given both by the ld. Dy. CIT and the learned CIT(appeals) in this regard are incorrect and unjustified. Specifically, the Learned CIT(Appeals) has grossly erred in stating that the appellant could not produce evidence of actual delivery of material purchased or evidence regarding allegedly bogus invoices. The appellant craves leave to add to, to alter or to amend the above Grounds of appeal." 2. Briefly stated, the facts of the case are that the assessee company which is engaged in the business of manufacturing and export of seamless aluminium bottles etc. had filed its return of income for A.Y. 2009-10 on 29.09.2009, declaring an income of Rs. 54,38,570/-. Original assessment under Sec. 143(3) was framed on 12.12.2001 at an income of Rs. 54,38,570/-. Thereafter, on the basis of information received by the A.O from the Investigation wing of the Income tax department that the assessee was one of the beneficiary of transactions routed through the hawala dealers as informed by the Sales Tax (VAT) Department, State of Maharashtra, the case of the assessee was reopened and a Notice under Sec. 148 was issued on 25.03.2013. The assessee vide its lette ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t proceedings, viz. (i). the information gathered from the Sales Tax Department revealed that the aforesaid parties were providing accommodation entries and not carrying on any genuine purchase and sale transactions; (ii). that as per the information received from the Sales tax department the assessee was one of the beneficiary who had taken accommodation entries of bogus purchases from the aforesaid parties; (iii). the assessee company despite specific directions failed to place on record documentary evidence to prove the veracity of the purchase transactions; (iv). the aforesaid parties in their statements recorded u/s 14 of MVAT, 2002 by the Sales Tax (VAT) department had accepted that they were not doing any genuine business and were merely issuing bogus bills; (v). the aforesaid parties were not available at the given addresses and the notices issued to them u/s 133(6) were returned unserved by the postal authorities; (vi). the assessee could not place on record documentary evidence which could prove the delivery and/or receipt of the goods from the aforesaid parties; (vii). that the assessee could not produce contemporaneous records to establish the receipt of goods purchased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... city of the purchase transactions, but however, the A.O had most arbitrarily brushed aside the same and wrongly concluded that no genuine purchases were made by the assessee from the aforementioned parties. It was submitted by the ld. A.R that the assessee in order to fortify the genuineness of the purchase transactions under consideration had also produced before him evidence as regards the delivery of the goods at the site of the assessee, however, an observation to the contrary was recorded by him while framing the assessment. The ld. A.R submitted that the fact that the purchases under consideration were consumed in the business could be gathered beyond doubt from the fact that in case if the purchases were deflated to the said extent, the gross profit rate would swell to an exorbitant figure. The ld. A.R further averred that as the GP rate of the assessee for the year under consideration was in conformity with that of the preceding year, therefore, no adverse inference as regards the genuineness of the purchases under consideration was liable to be drawn. Alternatively, it was submitted by the ld. A.R that now when the fact that the purchases under consideration were consumed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns on the basis of irrefutable and clinching evidence. We are of the considered view that the assessee in the backdrop of the information received from the Sales Tax department, which raised serious doubts as regards the genuineness of the purchases claimed to have been made from them, thus remained under a heavy onus to substantiate the veracity of the purchase transactions under consideration and dispel all the doubts as regards the same on the basis of clinching and irrefutable evidence. However, we would not hesitate to observe that the assessee could not substantiate the genuineness of the transactions to the hilt. We find that the fact that all the notices issued by the A.O under Sec. 133(6) were returned by the postal authorities with the remarks "Not Known" raises serious doubts as regards the genuineness of the purchase transactions under consideration, the authenticity of which as observed by us hereinabove, was already haunted by doubts in the backdrop of the information received from the Sales tax department. We are of the considered view that now when it was the claim of the assessee that it had made purchases from the aforesaid parties and had claimed the same as an e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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