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TMI Blog2019 (6) TMI 1050X X X X Extracts X X X X X X X X Extracts X X X X ..... gned (disputed) purchases. See SHRI HARIRAM BHAMBHANI [ 2015 (2) TMI 907 - BOMBAY HIGH COURT] - Decided partly in favour of assessee. - ITA No. 3117/Mum/2017 - - - Dated:- 11-6-2019 - Shri Pawan Singh, Judicial Member And Shri M. Balaganesh, Accountant Member For the Appellant : Ms. Dinkle hariya (C.A) For the Respondent : Shri Satish Rajore (Sr. DR) ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of ld. Commissioner of Income Tax (Appeals)-30 [the ld. CIT(A)], Mumbai dated 08.02.2017 for Assessment Year 2009-10. The assessee has raised the following grounds of appeal: 1. REASSESSMENT 1.1 The Ld. Commissioner of Income - tax (Appeals) - 30, Mumbai [ Ld. CIT (A) ]' erred in confirming the action of the A.O. in initiating reassessment proceedings and framing the assessment of the Appellant by invoking the provisions of section 147 r.w.s. 148 of the Income tax Act, 1961 [the Act ]. 1.2 While doing so, the Ld. CIT (A) failed to appreciate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 143(3) on 17.10.2011 assessing the total income at ₹ 2,79,690/- by making various additions/disallowances. The assessment was re-opened under section 147 by issuing notice under section 148 on 06.03.2014. The assessment was re-opened on the basis of information received from DGIT (Investigation), Mumbai about the information received from Sales Tax Department, Government of Maharashtra that certain dealers are indulging in providing accommodation entries in the form of issuing bogus bills/purchase bills without actual delivery of goods. The assessee was shown as one of the beneficiary from such hawala dealers. On the basis of such information, the assessment was re-opened. The assessee filed reply dated 20.03.2014, in response to the notice under section 148. In the reply, the assessee stated that the return of income filed originally may be treated as return in response to the notice under section 148. The Assessing Officer issued notice under section 143(2) and 142(1) and proceeded for reassessment. During the re-assessment proceeding, the Assessing Officer noted that the assessee has shown purchases from five. The names of all the parties appeared ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the parties were engaged in providing accommodation entries. The parties were issuing bills without delivery of any goods. Investigation Wing of Income Tax Department also conducted the enquiries against such hawala parties. The assessee has adopted modus operandi to reduce the true profits by inflating his expenses by taking accommodation entries from such parties. The Assessing Officer failed to produce the bills for their examination, so the books of account of assessee to the extent that purchase made from these parties remained unverifiable. The assessee not discharges his onus to substantiate the genuineness of parties. The Assessing Officer disallowed the entire/aggregate purchases of five parties of ₹ 2,29,21,394/- while passing the assessment order under section 143(3) r.w.s. 147. On appeal before the ld. CIT(A), the action of Assessing Officer in re-opening as well as in making 100% addition was sustained. Thus, further aggrieved by the order of ld. CIT(A), the assessee has filed the present appeal before us. 4. We have heard the submission of ld. Authorized Representative (AR) of the assessee and ld. Departmental Representativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchases may be disallowed to avoid the possibility of revenue leakage, though the purchases made by assessee were genuine one. The Assessing Officer made the addition on the basis of third party information and without giving any opportunity to cross-examine the alleged hawala dealers. The statement of dealer recorded by Sales Tax Department, Government of Maharashtra was not provided. 5. On the other hand, the ld. DR for the Revenue supported the orders of authorities below. The ld. DR for the Revenue argued that the Investigation Wing of the Income-tax Department made full-fledged enquiry. The parties from whom the assessee has shown the purchases are bogus Hawala dealers. The hawala dealers are indulged in issuing bogus bills without delivery of any material or goods. The assessee obtained accommodation bills only in order to inflate the expenses and to bring down the profitability in order to avoid the tax. The ld. DR for the Revenue prayed for dismissal of the appeal. 6. We have considered the rival submissions of the parties and have gone through the orders of authorities below. Ground No. 1 2 relates to reopening and deni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee has adopted modus operandi to reduce the true profits by inflating his expenses by taking accommodation entries from such parties. The Assessing Officer failed to produce the bills for their examination, so the books of account of assessee to the extent that purchase made from these parties remained unverifiable. The assessee not discharges his onus to substantiate the genuineness of parties and disallowed the entire purchases. 8. Before the ld. CIT(A), the assessee stated that his documents were damaged/spoiled in rainy water and that he has made an FIR with Police Station on 12.01.2011. It was further stated that the addition was made only on the basis of statement of third party before Sales Tax Department/VAT Authorities. The Sales Tax authority has not received the tax from those suspicious dealers. The assessee further stated that mere return of notice under section 133(6) does not mean that the parties are bogus. The assessee maintained the stock register and that sale of the assessed are not disputed. The assessee also specifically stated that only profit element embedded in such type of dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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