TaxTMI 
TaxTMI 
2017 (11) TMI 318
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.... Rs. 28,94,528/- on estimated profit element on treating the genuine purchases of Rs. 2,31,56,224/- as non-genuine purchases as the said purchases made considered as bogus from the impugned 10 parties of which information has been received from Sales Tax Department and the said information has been forwarded by the DGIT (Inv.),Wing, Mumbai to the Assessing Officer. Provisions of the Act ought to have been properly construed and regard being had to facts of the case no such additions to be made. Reasons assigned by him are wrong and insufficient to justify the additions. 2. The order made under section u/s 143(3) r.w.s. 147 of the Act by the learned Assessing Officer is bad-in-law, ultra virus and without appreciating the facts, submis....
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....erification for which it has expressed its inability to produce them before the Assessing Officer. Therefore, the Assessing Officer concluded that the assessee has obtained bogus purchase bills to reduce profits by inflating purchases. By following the decision of Hon'ble High Court of Gujrat in the case of Simit P Seth, 2013 (356 ITR 451), the Assessing Officer has disallowed 12.5% of bogus purchase of Rs. 2,31,56,224/-which works out to Rs. 28,94,5287- as unexplained income. 4. Against the above order, the assessee appealed before the ld. CIT(A) who restricted the addition to 6.5% of the bogus purchase. 5. Against the above order of ld. CIT(A), the assessee is in appeal before the ITAT. 6. I have heard the ld. Departmental Represen....
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....f bogus bills after deduction of their agreed commission. The Assessee was stated to be one of the beneficiaries of these bogus entries of sale of material from hawala entry operators in favour of the assessee wherein the assessee made alleged bogus purchases through these bogus bills issued by hawala entry providers in favour of the assessee. These dealers were surveyed by the Sales Tax Investigation Department whereby the directors of these dealers have admitted in a deposition vide statements/affidavit made before the Sales Tax Department that they were involved in. issuing bogus purchase bills without delivery of any material. There is a list of such parties wherein the assessee is stated to be beneficiary of bogus purchase bills. 8. F....
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....ces Managnese Ore Co, ltd. v. ITO(1991) 191 ITR 662, for initiation of action under section 147(a) (as the provision stood at the relevant time) fulfillment of the two requisite conditions in that regard is essential. At that stage, the final outcome of the proceeding is not relevant. In other words, at the initiation stage, what is required is "reason to believe", but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief by the AO is within the realm of ....
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....t overwhelming evidence that the provider of these bills are bogus and non-existent. 11. 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 returned unserved. Assessee has not been able to produce any of the parties. The assessing officer has noted that there is no cogent evidence of the provision of goods. Neither the assessee has been able to produce any confirmation from these parties. In such circumstances, there is no doubt that these parties are non-existent. I find it further strange that assessee wants the Revenue to produce assessee's own venders, who....
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....purchase bills have been found to be bogus 100% disallowance was required. The special leave petition against this order along with others has been dismissed by the Hon'ble Apex Court vide order dated 16.1.2017. 14. I further note that Hon'ble Rajasthan High Court in the case of CIT Jaipur v. M/s. Shruti Gems in ITA No.658/2009 vide order dated 23.05.2017 has inter alia referred to the decision of Hon'ble Rajasthan High Court in ITA No.234/2008 in case of CIT Jaipur v. Aditya Gems for the following decision:- "Considering the law declared by the Supreme Court in the case of Vijay Proteins Ltd. Vs. Commissioner of Income Tax, Special Leave to Appeal (C) No.8956/2015 decided on 06.04.2015 by the Supreme Court has dismissed the SLP confined....