TaxTMI 
TaxTMI 
2017 (10) TMI 584
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....learned CIT(A) is correct on facts and in law in deleting the addition made under section 69 of the Act of Rs. 1,67,26,325/- as all the purchases made from the alleged bogus purchases are in turn sold and all the evidences of both purchases and sales were filed before the Assessing Officer and the CIT(A)." 4. At the outset, learned Counsel of the assessee submitted that he shall not be pressing the ground No.1 raised in cross objection relating to validity of reopening. Accordingly this ground raised in the cross objection is dismissed as not pressed. 5. In this case the assessment was reopened. The Assessing Officer made his observations regarding the reopening as under:- "An information is received from the office of the DGIT (Inv) which was based on enquiries conducted by the Sales Tax Department of Maharashtra that M/s. Jostars Orgotech Pvt Ltd. has taken accommodation entries from the following parties by way of taking bogus bill of purchase:- Sr. Name of the purchase party PAN FY Amount (Rs.) 1) Universal Trading Co. AAOPS7358D 2008-09 5,57,440 2) Nisha Enterprises AWGPS3492N 2008-09 10,81,600 ....
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....n returned back by the postal authorities unserved. Hence, the assessee, vide order sheet noting dt. 24.2.2015, was given opportunity to produce the above parties along with copy of Form No.704, copy of 'J1 & J2' filed by the above parties and he was also asked to show cause why the above purchases should not be disallowed and added back to its total income. However, till date the assessee has neither not able to produce any of these parties nor furnished the details called for. 4.5 Perusal of the details filed and after discussion, following facts have emerged, which prove that the purchases made by the assessee from the said tainted dealers are not genuine- 1) The genuineness of above purchases cannot be verified as the assessee is unable to produce the said dealers/parties. 2) No quantity-wise stock details have been furnished, also no proof of transportation of the material purchased has been given. 3) The assessee company is not keeping day-to-day stock register for raw materials, finished goods, manufacturing a/c. Hence it is not possible to identify, match & co-relates the corresponding consumption/sales of the items purchased from....
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.... actual sale/purchase transaction. In certain cases, though the Hawala parties have collected VAT they were not deposited into the Govt. Treasury. These Hawala parties are floating countless firms / concerns under numerous names. All these Hawala dealers were declared by the Sales Tax Department as 'Suspicious', 'bogus', 'Hawala' dealers. 4.7 It is settled law that onus is on the assessee to prove the genuineness of any expenditure which is claimed as deduction in computing its taxable income. Therefore, the onus, in the instant case, squarely lay on the assessee to prove the genuineness of the purchases which is shown to have been made from the parties which have been held to be bogus by the government authorities. It was incumbent on the assessee to prove that the suppliers were genuine suppliers and they really supplied material to the assessee and the assessee really made payments by cheques, to these very parties and none else. Such a burden had to be discharged by the assessee with very strong and clinching evidence. No serious efforts were made by the assessee to discharge such burden of proving the genuineness of the transactions with these ....
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....ully refer to the order of learned CIT(A) as under:- "It is seen that A.O. has erred on the facts of the case in making addition of Rs. 1,67,26,325/- on account of bogus purchases. The case has been reopened on the basis of information received from DGIT (Inv) and Maharashtra Sales Tax Department. However, during the course of appellate hearing, it is seen that the appellant has submitted all ledger accounts of the concerned parties, sale and purchase bills, delivery challans, details of transportation, the supporting vouchers and copy of bank statements. Nothing has been brought out on record by the A.O. to prove that the purchases are bogus. The A.O. is also ignoring the fact that corresponding sales have been reflected in the books and A.O. has not negated this finding. Reliance is placed on the following judicial decisions of Hon. Apex Court, Hon. Gujarat High Court, Hon. Mumbai High Court and Hon. Mumbai IT AT wherein the Hon. High Courts, Hon. IT AT and Hon. Supreme Court has deleted the additions in other cases of bogus purchases : 1. Munjal Sales Corpn Vs CIT (2008) 168 Taxman 43 (SC) 2. CIT Vs Reliance Utilities & Power Ltd. (2009) 178 T....
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....sed the records. We find that credible and cogent information was received in this case by the assessing officer that certain accommodation entry provider/bogus suppliers were being used by certain parties to obtained bogus bills, assessee was found to have taken accommodation entry/bogus purchase bills during the concerned assessment year from different parties. Based upon this information assessment was reopened. The creditability of information relating to reopening remains un-assailed. In such factual scenario the Assessing Officer has made the necessary enquiry. The issue of notice to all the 11 parties have returned unserved. Assessee has not been able to provide any confirmation from any of the parties. In this factual scenario it is amply clear that assessee has obtained bogus purchase bills. Mere preparation of documents for purchases cannot controvert overwhelming evidence that the provider of these bills are bogus and non-existent. 12. The Sales Tax Department in its enquiry have found that parties to be providing bogus accommodation entries. The Assessing Officer also issued notices to these parties at the addresses provided by the assessee. All these notices have re....