TaxTMI 
TaxTMI 
2017 (9) TMI 381
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.... 2011-12 and 2012-13 respectively, appellate proceedings before learned CIT(A) arising from separate assessment orders dated 05-03-2015 and 24-03- 201 passed by learned Assessing Officer (hereinafter called "the AO") u/s 144 r.w.s. 147 of the Income-tax Act, 1961 (hereinafter called "the Act"). 2. These two appeals involve common issue of disallowance of purchases on the allegation of the assessee having made alleged purchases from accommodation entry providers i.e. hawala dealers who have issued bogus bills without supplying any material physically to the assessee. First we shall take up appeal for assessment year 2011-12. 3. The brief facts of the case are that assessee company is manufacturer of heat exchangers. The assessee filed ....
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....he AO. There is no adverse comments about the same by the AO so far as proving the utilization and consumption of material so purchased for manufacturing finished goods. It was explained by the assessee that the goods have been entered into stock and the bin card summary of purchases and sale of the party was enclosed. However, the assessee despite being asked to produce the said party did not produce the said party before the AO nor said party 'Nutan Metals' replied to notice u/s 133(6) issued by the AO. The AO observed that the said party ' Nutan Metals' has admitted before the Sales Tax Department that they have not made any sale or purchase transaction but rather only bogus invoices were issued, which proves that purchases shown to b....
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....see has shown sales of Rs. 5.26 crores and gross profits of Rs. 1.68 crores which work out to GP of 31.91%. The AO received information from Sales Tax Department that the assessee has made purchases from Nutan Metals to the tune of Rs. 56,55,569/- who is engaged in providing accommodation hawala entries wherein only bogus bills are issued by Nutan Metals without supplying any material and the assessee is one of the beneficiary of such accommodation entry. The case was reopened u/s 147 of the 1961 Act by the AO by issuance of notice dated 23- 04-2013 u/s 148 of the 1961 Act, which was issued within four years from the end of the assessment year. The reasons for reopening was supplied by the AO to the assessee and in response to notice u/s 14....
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....clear that the assessee made purchases from grey market to tally stock as the assessee was in possession of stock while bogus bills were obtained from Nutan Metals. Thus, the assessee benefited by way of margin of grey market. The books of accounts were rejected u/s 145(3) and the AO estimated GP of 31.91% on these alleged bogus purchases from Nutan Metal to the tune of Rs. 56,55,569/- and income of Rs. 18,04,692/- was brought to tax by the AO vide assessment order dated 05-03-2015 passed by the AO u/s 144 r.w.s. 147 of the 1961 Act which was confirmed by learned CIT(A). Reference is drawn to decision of Hon'ble Supreme Court in the case of Kachwala Gems v. Jt. CIT [2007] 288 ITR 10/158 Taxman 71 (SC), wherein Hon'ble Lordships h....
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.... by the Assessing Officer and he resorted to best judgment assessment under section 144 of the Income-tax Act. The view that the case of the assessee is more or less having similar facts as that of M/s. Gem Plaza where the Gross Profit has been taken as 35.48 per cent. The Assessing Officer estimated the Gross Profit of the assessee as 40 per cent. 6. The Assessing Officer further held that the assessee has shown bogus purchases in order to reduce the Gross Profits. 7. In appeal, the Commissioner of Income-tax (Appeals) upheld most of the findings of the Assessing Officer, but reduced the Gross Profit from 40 per cent to 35 per cent. 8. In further appeal, the Tribunal had given further relief to the assessee and r....
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....eived by Revenue from Sales Tax Department wherein the assessee is stated to be beneficiary of the accommodation entry provided by Nutan Metals. Notices u/s 133(6) by the AO to the said party remained uncomplied with by Nutan Metals and the assessee could not produce the said party before the authorities below. The assessee is not able to discharge the onus lay on it under provisions of the 1961 Act in this case. The conclusion of the cumulative factual matrix of the case is that the assessee has obtained actual material from grey market at lower price and to save on VAT, grey market profits etc. has obtained bogus invoices from the said party namely Nutan Metals. The consumption/utilization of the material reflected by the said bogus invoi....