9911796707
TMI Blog2017 (10) TMI 1671X X X X Extracts X X X X X X X X Extracts X X X X ..... iew has been further supported by the decision of Vijay Protiens Ltd. [1996 (1) TMI 144 - ITAT AHMEDABAD-C] wherein it was held that only profit element embedded in bogus purchases needs to be taxed. As in the case of Bholanath Poly Fab Pvt. Ltd. [2013 (10) TMI 933 - GUJARAT HIGH COURT] observed that whether purchases themselves were to be taxed or whether parties from whom such purchases made were bogus is essentially a question of fact and the Tribunal having examined the evidence on record concluded that the assessee did purchase cloth and sold goods, the entire purchase would not be subjected to tax. In yet another case in the case of Simit P Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] has held that no uniform yardstick can be app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us purchase bills issued by hawala operators listed by the Sales-tax department. Based on the information, the AO reopened the assessment on the ground that income chargeable to tax had been escaped assessment within the meaning of section 147 of the Income-tax Act, 1961. In response to notices u/s 143(2) and 142(1), the authorised representative of the assessee appeared from time to time and filed the details, as called for. During the course of assessment proceedings, the AO noticed that the assessee has purchased from 3 parties, viz. Om Corporation, Raj Traders, and Sunrise Enterprises amounting to Rs.43,48,834. The AO, further observed that all the above three parties appeared in the list of hawala operators prepared by Salestax departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not made out any case of sales outside the books of account nor pointed out any discrepancy in stock registers. The AO has not disputed the sales declared by the assessee. In the absence of any finding as to the incorrectness of books of account and stock details, merely on the basis of information received from Sales-tax department, purchases cannot be doubted. The CIT(A), after considering relevant submissions of the assessee and also relying upon certain judicial precedents observed that no evidence of work done for BMC is furnished. The assessee also could not co-relate the purchase of any actual work done. In fact, the assessee has remained completely silent on the issue of actual work executed. The documents gathered during the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of information received from Maharashtra Sales-tax department which informed that the parties are involved in providing accommodation entries without any business activity. According to the AO, notices issued u/as 133(6) were returned unserved. Therefore, the AO opined that though the assessee has furnished certain evidences to justify purchases from above parties, but failed to prove the genuineness of purchases in the backdrop of clear findings of Maharashtra Sales-tax department that the parties are involved in providing accommodation entries. It is the contention of the assessee that purchases from above parties are genuine in nature as its purchases are supported by valid purchase bills, delivery challans and payment for such pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the AO. Under these facts and circumstances what needs to be taxed is only the profit element in such purchases but not the total purchases made from alleged bogus parties. This view has been further supported by the decision of Ahmedabad Tribunal in the case of Vijay Protiens Ltd (supra) wherein it was held that only profit element embedded in bogus purchases needs to be taxed. We further notice that the Hon'ble Gujarat High Court in the case of Bholanath Poly Fab Pvt Ltd 355 ITR 290 (Guj) observed that whether purchases themselves were to be taxed or whether parties from whom such purchases made were bogus is essentially a question of fact and the Tribunal having examined the evidence on record concluded that the assessee did purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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