9911796707
TMI Blog2024 (8) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... shown purchase of bullion of Rs. 85,13,92,096/- from some vendors who have not filed return of income for the relevant assessment year. The details of the said vendors are as under: Sl. No. Name and PAN of the Vendor/ Service Provider Amount 1 Shravan Kumar (PAN: FSMPK 3057 G) 21,60,34,364/- 2 Ankit Kumar (PAN: ASTPA 3491 J) 19,75,32,981/- 3 Varun Kumar (PAN: EEGPK 4385 L) 13,31,73,882/- 4 Haripal (PAN: ASEPH 7437 G) 10,33,61,460/- 5 Pappu Paswan (PAN: ERYPP 9251 B) 20,12,89,409/- Total 85,13,92,096/- 3.1 The Assessing Officer asked the assessee to furnish the relevant details relating to the aforesaid purchases, whereupon, the assessee furnished the following reply: "1. Nature of Business- already mentioned in our reply dated 30.11.2021 2. Computation, Balance Sheet and Profit and Loss Account for the relevant assessment year already submitted with our reply dated 30.11.2021 3. Total income and TDS/TDS already explained in our reply dated 30.11.2021 4. Regarding non-filing of ITR by specific vendors- Under normal trading activities, the vendor in not obliged to share their ITR copies with us. The check we do is to ensure that our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation of the suppliers are also doubtful as they have not responded to the notice u/s 133(6) of the Act nor have accounted for the purchases made by the assessee and paid taxes thereon iv) All the five vendors are non-filers. v) The business of the vendors doesn't relate to the goods supplied to the assessee vi) The activity of all the five vendors/sellers on GST returns were during transaction period i.e. FY 2019-20." 3.3 He, therefore, again issued show-cause notice to the assessee as to why the aforesaid purchases be not treated as bogus purchases and the amount of expenditure shown by the assessee be not disallowed and added back to the income of the assessee, whereupon, the assessee furnished the following reply: "1. We would like to object to the proposed addition. 2. As proof of delivery of goods against the said purchases, we are attaching copy of a few railway tickets for some respective purchase bills, proving the fact that the goods were delivered to us by a person who travelled by train from Delhi and delivered the goods to us in our office. The e-way bill system under the GST rule is not applicable for Gold. 3. We are also attaching the stock register for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence regarding the authenticity of its purchases from above parties mentioned above. The explanation offered by the assessee is rejected as assessee had not provided any evidence w.r.t. the genuineness of the purchases. 2) The assessee has claimed that the stock register proves that the goods have been received by him; however, the stock register is a self-created document of the assessee and could not be taken as a proof of receipt of goods. 3) Further, as discussed above, the modus operandi used by the assessee is to accumulate accommodation entries in the form of bogus purchases from different vendors. It can be found from the GST portal that the said firms were in different line of business and no relations with the assessee's business and had purely found for the purpose of accommodation entries only. 4) Moreover, the assessee has not provided any substantive document w.r.t. the genuineness of the transaction. As in this case, the firms(parties) had only filed their GST returns for the period under considerations after which they have suo-moto cancelled their GST numbers in order to avoid further litigations. It can also be seen that the said firms incorporated just be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books of account of the assessee, confirmation of ledger accounts from the vendors, copies of bank statement reflecting the bank transactions with the said parties, sample copy of train tickets of persons who carried and delivered the bullion, copies of GSTR 2A evidencing the filing of GST return by the vendors reflecting therein the sales made by them to the assessee and duly paid GST thereupon, stock register duly showing the date-wise movement of goods with details of purchases and corresponding sales and stock-in-hand. The ld. counsel has further submitted that apart from the aforesaid documents, the assessee had also furnished duly executed affidavits of concerned vendors, wherein, they have confirmed the transactions entered into by them with the assessee. In the affidavits, the current addresses of the vendors were also mentioned. However, the Assessing Officer did not choose to communicate with them at their latest addresses. The ld. counsel has, therefore, submitted that the assessee had duly discharged his burden to prove the purchases, however, both the lower authorities failed to properly appreciate the same. The ld. counsel has further submitted that the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her hand, has relied upon the findings of the lower authorities. He, however, has fairly admitted that there were no discrepancies found in the accounts furnished by the assessee after getting the same duly verified by him. 7. We have considered the rival submissions and gone through the record. Admittedly, the assessee is dealing in bullion. The assessee is not in the business of manufacturing of other type of goods, wherein, there is a scope of showing bogus purchases of raw material, which is shown as consumed and thereby the profit is reduced out of sales in respect of such bogus purchases. In this case, the goods dealt with by the assessee are gold/bullion. This type of precious metal is not brought through transportation, rather, this is delivered personally by the vendor or his agent. The margin in purchase/sale of bullion, as commonly known, is very low. The assessee has given the data of last four years, wherein, the GP percentage of the assessee was ranging from 0.08% to 0.13% of the turnover. The assessee has categorically pleaded that even at its peak, the gross profit rate in case of the bullion cannot be more than 0.15%. We are convinced with the above submissions of ..... 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