9911796707
TMI Blog2025 (1) TMI 695X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. Thus, it appears to be a case of bogus bills arranged from the aforesaid entities and materials purchased from somewhere else at a lower cost. Thus, we are of the considered view that a reasonable disallowance of the purchases would meet the possibility of revenue leakage. Quantification of the profit element embedded in making such bogus/unsubstantiated purchases - As respectfully following the aforesaid decision of M. Haji Adam Co. [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT] we set aside the impugned order passed by the learned CIT(A) and restore the matter to the file of the jurisdictional AO with the direction to restrict the addition as regard the afore-noted two bogus purchases by bringing the gross profit rate on such bogus purchases at the same rate as that of the other genuine purchase. We further direct that if the gross profit rate on bogus purchases is higher than the other genuine purchases and the same has already been offered to tax by the assessee then no further addition be made. Appeal by the assessee is allowed for statistical purposes. - Shri Narendra Kumar Billaiya, Accountant Member And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act conducted in the case of M/s Swastik Corporation, during which statement of the proprietor of the aforesaid concern was recorded, wherein he admitted that he had done cash transactions with some parties. As per the information received, the proprietor of the aforesaid concern, Mr. Bijal Ashok Shah, explained the modus operandi and stated that he raised the sale bill in the name of the customer, but he did not deliver the gold to the customer and retained it with him on behalf of the customer. Subsequently, upon the instruction of the customer, the gold was sold in cash to some other customer and cash was transferred to the original customer after retaining a certain margin commission on the amount. On going through the documents forwarded by the Investigation Wing, it was noticed that the above concern had shown bogus sales to the assessee in its books of account. Accordingly, on the basis that the assessee has obtained accommodation entry of bogus purchases from M/s Swastik Corporation, reassessment proceedings under section 147 of the Act were initiated and notice under section 148 of the Act was issued to the assessee. During the reassessment proceedings, the assessee submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010-11. However it may be noted that the ITAT has allowed the appeal because of the smallness of the revenue involved. Further it may be noted that the assessee has not provided any Such order for A.Y. 2016-17. 4.5(iii) It is argued that no addition has been made in the hands of vendor for bogus sales. The assessee also claims that no addition in his hand for bogus purchase may be made. However, it may be noted that the assessee is not able to prove its case beyond doubt. 4.5 (iv). The assessee has also stated that no copy of the statement of the vendor has been provide to him. However surprisingly the assessee has submitted an affidavit from the Vendor on this issue therefore, matter been contradictory on facts. No copy of statement of vendor is being provided to the assessee at this stage as the assessee is already aware of the facts of the case. 4.5(v). the assessee has also requested for cross examination of the vendor. However, this request cannot be accepted as assessee and the vendor are trying to play sale-purchase game with the department. Hence, cross examination is not considered at this stage. 4.5(vi). The assessee has relied upon several case laws which have been gon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecause it may have been rooted through a negotiable instrument in a bank. In this case, the substance proves that the transaction were bogus and the form given to them was a receipt. Reliance is placed on the judicial precedent of Karanpura Development Co. Ltd Vs CIT(SC) 44 ITR 362. During the assessment proceedings the AO made aware the assessee that the other party to transaction is paper concern only and no goods have exchanged actually. The transaction has been evidenced on paper trail only. Hence, the onus of proving the transaction to be a genuine one squarely lies on the assessee. The assessee was asked to file confirmations of the sadi transactions and to demonstrate and correlate that the said purchases resulted in genuine sales. 5.3.2 A statement of Sri Bijal Ashok Shah, proprietor of M/s Swatic corporation was recorded on oath, in which he admitted that he has done cash transaction with some parties. As per modus operandi explained, he stated that he raises sale bill in the name of a customer, but he does not deliver gold to the customer and retains it with him on behalf of customer. Such transactions are accommodation entries without any corresponding buying or selling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both sides and perused the material available on record. In the present case, on the basis of the information received from the Investigation Wing, Mumbai regarding the survey action conducted in the case of M/s Swastik Corporation, wherein the statement of the proprietor was recorded on oath, who admitted that he was engaged in providing accommodation entries of bogus purchases without supplying the gold, reassessment proceedings under section 147 of the Act were initiated in the case of the assessee as from the documents forwarded by Investigation Wing it was noticed that M/s Swastik Corporation has shown sales to the assessee in its books of accounts. 7. In the present case, it is undisputed that the original return of income filed by the assessee was not selected for scrutiny and the same was only processed vide intimation issued under section 143(1) of the Act. Therefore, we are of the considered view that the information received from the Investigation Wing, Mumbai constitutes new and tangible material for initiating the reassessment proceedings in the case of the assessee. In ACIT v/s Rajesh Jhaveri Stock Brokers (P.) Ltd, reported in [2007] 291 ITR 500 (SC), the Hon ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vendor. However, the assessee furnished the quantitative details of stock as furnished in the tax audit report during the assessment proceedings. 10. During the hearing, the learned AR by placing reliance upon the decision of the coordinate bench of the Tribunal in the case of Mr. Bijal Ashok Shah submitted that the addition made in the hands of Mr. Bijal Ashok Shah was deleted by the Tribunal. Thus, it was submitted that purchases in the hands of the assessee cannot be doubted and disallowed. From the perusal of the decisions of the Tribunal in the case of Mr. Bijal Ashok Shah, forming part of the paper book on pages 06-18, we find that the same pertains to the assessment year 2011-12, 2012-13, 2013-14 and 2017-18. Thus, at the outset, it is evident that the said decisions do not pertain to the year under consideration. As regards the assessment year under consideration, the learned AR submitted that the return of income filed by Mr. Bijal Ashok Shah was only processed vide intimation issued under section 143(1) of the Act. Thus, it is evident that the transaction between M/s Swastik Corporation and the assessee, during the year under consideration, was not examined and therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
