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TMI Blog2023 (10) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... id reason to interfere with the findings arrived by the learned CIT(A) while confirming both the additions made by AO. Therefore, sole grievance of assessee being devoid of merits is dismissed. - Sh. G. S. Pannu, President And Shri Chandra Mohan Garg, Judicial Member For the Assessee : None For the Revenue : Ms. Anubhaa Tah, Sr. D.R. ORDER PER CHANDRA MOHAN GARG, JM : This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-I, New Delhi dated 14.10.2019 for Assessment Year 2011-12. 2. In this appeal, the assessee has raised as many as 13 grounds of appeal but sole grievance of assessee is that the AO has erred in making addition under section 69C of the Income-tax Act, 1961 (for short the Act ) and the learned CIT(A) was also not correct and justified in upholding the same. 3. When the appeal was called for hearing neither the assessee nor any authorised representative or Counsel appeared nor any adjournment application has been filed despite due service of notice. Therefore, we proceed to decide the appeal ex parte qua assessee after hearing the arguments of learned Sr. D.R. on behalf of the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f appellate order, submitted that the learned CIT(A) after considering the basis taken by the AO and material available on record, rightly upheld the findings of the AO that since Shri Himanshu Verma and Shri Anjani Kumar had admitted on oath that they were using said two companies for providing accommodation entries. The Ld. senior DR thus submitted that the AO had rightly held that the purchases made by the assessee during F.Y. 2010-11 from the said two companies controlled by Shri Verma were not genuine purchase. Learned Sr. D.R. submitted that in the present case, it is clearly established by the AO that the appellant has taken accommodation entry in the form of bogus purchases from two dummy companies, therefore, he rightly made addition of Rs. 21,89,190/- u/s 69C of the Act treating the impugned purchases as bogus and unexplained expenditure and also rightly upheld the addition of Rs. 21,890/- on account of commission for arranging accommodation entries or bogus purchases. The learned Sr. DR submitted that the orders of AO as well as learned CIT(A) may kindly be upheld dismissing the appeal of assessee. 6. On careful consideration of the submissions, we note that the Learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the reasons to believe. He has applied his mind by considering all the information before him and then has taken the approval of the higher authorities as required u/s 151 of the Act before issuing notice u/s 148 of the Act. He has not acted under the borrowed belief or under any direction. At the stage of forming belief, it was necessary for the A.O. to see the existence of the reasons and not the sufficiency of the reasons. The case laws relied upon by the appellant in his submission have been gone through and it is found that the facts of the present case are different from the case laws relied upon by the appellant. The reasons recorded by the A.O. are based upon specific information, based upon investigation conducted by the Department and, therefore, the reasons framed by the A.O. are based by the credible information. It is not important that the AO should have initially ascertained the facts by making further investigations and should have drawn conclusions as at this stage of proceedings it is not relevant. The important question is whether there was relevant material on which a reasonable person could have formed a belief is necessity which definitely there was in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that no such company of said name is functioning there and also have no knowledge of such company. Having no option left with, notices was served by affixture. 7.4 As regards the request of the appellant for cross examination of Mr. Himanshu Verna, the AO has relied on the decision of Honb'ble Allahabad High Court in the case of Prem Casting P. Ltd. wherein Hon'ble High Court had rejected the appellant's argument of denial of opportunity of cross examination of witness stating that when the assessee could not prove the identity of the investors which is the primary requirement to be fulfilled, granting opportunity of cross examination is largely inconsequential. In the assessment order, the AO has given categorical findings that the appellant was in touch with the parties till 2014 because of C form has been taken from the parties in the year 2014 and the appellant has entered into transaction with them till 2016. Then also appellant could not produce the party. The AO has also relied on the decision of Hon'ble Allahabad High Court in the case of Motilal Padampat Udyog Ltd. v. C.I.T. (160 Taxman 233) wherein it is held that right of cross-examination of per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Clothing Co. Pvt Ltd and (ii) the addition of Rs. 21,890 on account of commission for arranging accommodation entries for bogus purchases are confirmed Ground No. 1 to 9 are decided against the appellant. 7. On careful consideration of submissions placed by the assessee before authorities below, contentions of Learned Sr. DR, from careful perusal of the orders of the authorities below, first of all, we note that the assessee made purchase from the two companies viz., purchase of Rs. 14,93,750/- from M/s. Ridhi Sidhi Clothing Co. Pvt. Ltd. and purchases of Rs. 6,95,440/- from Shri Hari Clothing Co. Pvt. Ltd. totalling to Rs. 21,89,190/-. The AO made addition of said amount in the hands of the assessee u/s 69C of the Act by observing that Shri Himanshu Verma and his associates Shri Anjani Kumar have admitted in their statements that the said two companies were controlled by Shri Himanshu Verma and he was using these companies for providing bogus accommodation entries to various persons including the assessee. The AO after considering the explanation of the assessee and documentary evidences supported by the statement of Shri Himanshu Verma and his associate held that the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X
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