TaxTMI 
TaxTMI 
2017 (2) TMI 217
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....e case, briefly, are as under: - 2.1 The assessee, engaged in the business of trading in hardware items used in sugar factories, filed the return of income for A.Y. 2010-11 on 13.10.2010 declaring total income of Rs. 18,90,380/-. The return was processed under section 143(1) of the Income Tax Act, 1961 (in short 'the Act') and the case was subsequently taken up for scrutiny. In the course of assessment proceedings, the Assessing Officer (AO) received information from Sales Tax Department, Government of Maharashtra that certain dealers were providing accommodation entries/bills for a small commission without doing any actual business of purchase or sale of commodities, which was admitted by them in statements before Sales Tax Depa....
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....e were made to various sugar factories, public refineries in Maharashtra and Gujarat; which sales can be identified with purchases made. In order to ascertain the genuineness of these purchases, the AO issued notices to these parties to which there was no response. AO also recorded statement of the late assessee's son and Legal Heir, Shri Sagar Sanjay Goel, under section 131 of the Act. The AO did not accept the explanation put forth by the assessee and brushed aside the evidence/details placed before him, as he was of the view that the assessee's explanation did not prove the purchases were genuine and also for the reason that the assessee failed to produce those parties from whom purchases were made for examination in this regard. In that....
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....was specific and verifiable information from the Sales Tax Department that the assessee had resorted to bogus purchases and on being confronted, failed to produce evidence in respect of the purchases. (2) The appellant prays that the order of the CIT(A) on the above ground be set side and that of the AO be restored. (3) The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 3.2 The learned D.R. was heard in support of the grounds raised. It was contended that since the 15 parties from whom purchases were made by the assessee, in the year under consideration, did not respond to notices issued under section 133(6) of the Act issued by the AO and documentary evidence to support the purchas....
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....ing sales with book profit thereon; evidence of moving out of the these goods, etc. It is a fact evident from the record that the AO has not doubted the sales affected by the assessee and therefore it is in order to conclude that without corresponding purchases being made, the assessee could not have effected sales. 3.3.2 In our considered view, the AO has not brought on record any material evidence to conclusively prove that the said purchases are bogus. Mere reliance by the AO on information obtained from the Sales Tax Department or the sworn statement of the parties before the Sales Tax Department, without affording the assessee any opportunity to cross examine those witnesses in this regard or the fact that these parties did not resp....