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TMI Blog2018 (2) TMI 970X X X X Extracts X X X X X X X X Extracts X X X X ..... and notice u/s 143(2) dated 21-04-2014. The AO on examination of purchase details noted that the assessee had shown purchases from M/s. JPK Trading Pvt. Ltd amounting to ₹ 20,96,965/-. As per the statement of Shri Praveen Kumar Jain, it was found that M/s. JPK Trading Pvt. Ltd had never sold any goods and were only issuing bogus sales invoices and charged commission. Thus AO was justified in reopening the case of the appellant for the year under consideration u/s 147 of the Act - Decided against assessee - ITA No. 879/JP/2016 - - - Dated:- 9-2-2018 - SHRI VIJAY PAL RAO, JM AND SHRI BHAGCHAND, AM For The Assessee : Shri G.M. Mehta, CA For The Revenue : Shri P.P. Meena, JCIT - DR ORDER PER BHAGCHAND, AM The assessee has filed an appeal against the order of the ld. CIT(A) -1, Jaipur dated 01-07-2016 for the Assessment Year 2007-08 raising therein following grounds of appeal. 1. That the ld. CIT(A) has erred in law and on facts in sustaining the legality of initiation of the action u/s 147 of the I.T. Act on the basis of borrowed satisfaction for which objections were raised by the assessee before AO but were disposed of through a non-speak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee to prove that the assumption of facts made in the notice was erroneous. The assessee may also prove that no new facts came to the knowledge of the Income tax Officer after completion of the assessment proceeding. We are not expressing any opinion on the merits of the case. The questions of fact and law are left open to be investigated and decided by the assessing authority. The appellant will be entitled to take all the points before the assessing authority. The appeals are dismissed. ( iii) Further, in the case of ACIT vs Rajesh Jhaveri Stock Brokers Pvt. Ltd. [2007] 291 ITR 500 (SC), it was held by the Apex Court that if the AO, for whatsoever reason, has reason to believe that income has escaped assessment, it confers jurisdiction to reopen the assessment. It is a fact that no assessment was made earlier u/s 143(3)144 of the Act in the case of the appellant, therefore, the ratio in the case of ACIT vs Rajesh Jhaveri Stock Brokers Pvt. Ltd (supra) applies squarely to the facts of the instant case under consideration. ( iv) Further, the objections raised by the appellant with respect to initiation of proceedings u/s 147 of the Act was also dealt by the AO v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 5,24,240/- (being 25% of ₹ 20,96,965/-) to the income of the appellant. ( iii) It was the contention of the appellant that its purchases were genuine as the payments were made through cheques and the AO has not doubted the sales and thus without purchases, the sales cannot be effected. The claim of the appellant that the payments have been made through cheque has no weight as it has been held in a number of cases that the payment claimed to be made through cheques is not sacrosanct. Further the AO has made addition of only 25% of amount of bogus purchases only after taking into account the fact that no sales could be effected without making the purchases. ( iv) It was the contention of the appellant that the AO relied only on the statement of concerned persons of said party taken behind the back of assessee by authorities made the said addition, without giving any opportunity to cross-examine these parties. In this regard, suffice it to say that the proceedings under the I.T. Act are not strictly covered by the provisions of the Indian Evidence Act. The fact in the present case is that the seller had accepted that he had not sold any goods to the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the materials available on record. On perusal of the available records, it is noted that the assessee filed the return on 31-10-2007 declaring income of ₹ 13,76,920/- which was processed u/s 143(1) of the Act. It is noted that the Investigation Wing, Mumbai had conducted search and seizure operation over the group concern of Shri Praveen Kumar Jain and it was established by the Investigation Wing that Shri Praveen Kumar Jain was indulged in providing bogus bills to the needy person without actual delivery of goods. This fact was established on the basis of evidences recorded by the Investigation Wing. It is also noted that the Investigation Wing of the department recorded the statement of Shri Praveen Kumar Jain who is running bogus concern in the name and style of M/s. JPK Trading (I) Pvt. Ltd., who stated that his business concerns are indulged in providing the accommodation bills to needy parties on commission basis. He further deposed that he used to issue bogus sales invoices as per the requirement of parties on prefixed commission on the bill amount. He used to prepare bogus tax invoices on the basis of information provided by the bill seekers and then bogus invoices w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this case to provide reasonable opportunity a letter was again sent to the address of M/s. JPK Trading (I) Pvt. Ltd but it got returned unserved which showed that the entity is not genuine. According to the AO, the assessee was not able to provide any satisfactory explanation for the show cause notice issued to him. It is noted that the AO taking the resort of the various case laws as mentioned in the assessment order has made the trading addition of ₹ 5,24,240/-by disallowing 25% of unverifiable purchases of ₹ 20,96,965/- observing as under:- In the present case, assessee had claimed purchases of ₹ 20,96,965/- from M/s. JPK Trading (I) Pvt. Ltd. and this party is only issuing bogus sales invoices for the reasons given in detail in above para. Therefore, in the facts and circumstances of the case and in view of the decision of Hon'ble Gujarat High Court (supra), I disallow 25% of the unverifiable purchases of ₹ 20,96,965/- and made trading addition of ₹ 5,24,240/- to the declared gross profit of the assessee . This will result in addition of ₹ 5,24,240/- in the declared gross profit of the assessee. In first appeal, it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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