TaxTMI 
TaxTMI 
2017 (12) TMI 858
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....pellant failed to produced the parties before the AC), the question of cross examination does not arise, and the ground for re opening. 2 On the facts and in the circumstances of the case, and in law, the Learned Commissioner of Income tax (Appeals), erred inter alia a) in sustaining the addition to (he extent of 12.5% of the alleged bogus purchases by holding in para 3.5 of his order "Looking into the entirety of the facts, therefore in my considered opinion only the profit derived out of such transactions should be assessed to lax and relying on the decision in the case of Bholenath Poly Fab Pvt. ltd , addition to the extent of 12.5% of such tainted purchases is considered reasonable and sustained as suppressed profit element embedded in such purchase. This estimation is in addition to the grow pro/it shown by the appellant " b) by consciously overlooking that the purchases were made by account payee cheques to these suppliers whose identity was established by the fact of payment to them being confirmed by Bankers and no evidence has been produced by him for receipt of cash by the assessee as alleged by him . c) by holding in his order that the....
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....3 Sarailgi syndicate 17,24,625 4 Sunrise Enterprises 19,55,344 5 Amar Enterprise 19,52,440 6 Navkar Traders 38,45,250 7 MaJwvir Traders 9,99,900 8 Kkidee Sales 15,34,781 Total 1,43,98,830/- 4.1 The assessee was asked to explain its claim in light of the information received from the Sales Tax Department, Maharashtra. That during the course of assessment proceedings, the assessee was also asked to produce the above parties for verification. However, the assessee has failed to produce them. 4.2 The Assessing Officer further noted that section 101 of the Indian Evidence Act"1872 states that whoever desires any Court to give judgment as to any legal right or liability dependent on the existence of facts which he asserts, must prove that those facts exits. That when a person is bound to prove the existence of any fact, it is said that the burden of proof lies on that person. According to Section 103 of the Indian Evidence Act 1872, the burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence. Section 106 of Indian Evidence Act, 1872 says that when any fact is es....
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....n made on the basis of admission by assessee is justified." (Hira Singh and Co. * Vs. CJT (HP) 230 ITR 791) - "An admission is the best evidence that an opposing party can rely upon and though not conclusive, is decisive of the matter, unless successfully withdrawn or proved erroneous." (Narayan Bhagwantrao Gosavi Batajiwale Vs. Gopal AIR 1960 SC 100 and Pranav Construction Co. Vs. ACIT (ITAT Mum) 61 TTJ145) - "In a case where party relied on self serving recitals in documents it was for die party to establish the truth of these recitals. - The taxing authorities were entitled to look into the surrounding circumstances and find out the reality of such rentals." (CIT vs. Durga Prasad More (SC) 82 ITR 540) 5. During the course of assessment proceedings vide noting dated 31.07,2014, the assessee was asked to produce all the supporting documents to ascertain the genuineness of the transactions along with their filed ITRs and copy of bank account statement showing the transactions. Further, vide noting dated 07.08.2014 the assessee was show caused why these bogus purchases should not be added to your total income. In response to this, despite repeated opportun....
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....ies. Looking into the entirety of the facts, these grounds of appeal are dismissed. 3.3 The appellant has in ground No. 4 contested the additions on merits also. The detailed submissions of the appellant are reproduced above. The appellant has also submitted copies of correspondences made with the AO during the course of assessment proceedings. It is noted therefrom that vide letter dated 18/8/2014, addressed to the AO, the appellant has enclosed the copies of bills, ledger extracts, copies of bank statements etc and further vide letter dated 18/8/2014, the appellant contended that the materials purchased from the above parties has been sold to various parties as per disposal statements in respect of purchases made from each of these parties and also enclosed copies of sales bills in respect of such materials. The same was duly verified from the assessment records in presence of the Ld. A.O. Therefore looking into the entirety of the facts, it is noted that the materials shown to have been purchased and considered bogus by the A.O are also shown to have been resold to other parties. Therefore, in my considered opinion, under such circumstances, only the gross profit elemen....
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....e reopening is not at all justified. In this regard, the ld. Counsel of the assessee placed reliance upon Hon"ble Delhi High Court decision in the case of Principal CIT vs. Meenakshi Overseas (P.) Ltd. [2017] 395 ITR 677 (Delhi), CIT vs. Jyoti Prakash Dutta [2014] 367 ITR 568 (Bom); CIT vs. Vardhman Industries [2014] 363 ITR 625 (Raj); CIT vs. Eastern Commercial Enterprises [1994] 210 ITR 103 (Cal.). The ld. Counsel of the assessee further submitted that findings of the Sales Tax Department have not been given to the assessee and the assessee has not been provided any opportunity to cross examine the said hawala dealers. The ld. Counsel of the assessee further submitted that the books have not been rejected in this case, sales have been accepted, profits have been declared have not found to be unreasonable. Hence, the ld. Counsel of the assessee submitted that no addition is liable to be made in this case. 8. Per contra, the ld. Departmental Representative submitted that the reopening has been made upon cogent materials received by the Assessing Officer. The ld. Departmental Representative submitted that the information from the Sales Tax Department is not akin to newspaper repo....
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.... 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. 10. From the above, we find that tangible and cogent incriminating material were received by the AO which clearly showed that the assessee was beneficiary of bogus purchase entries from bogus entry providers which formed the reason to believe by the AO that income has escaped assessment. The information so received by the AO has live link with reason to believe that income has escaped assessment. On these incriminating tangible material information, assessment was reopened. At this stage there has to be prima facie belief based on some tangible and material information about escapement of income and the same is not required to be proved to the guilt. In this regard, I refer to the decision of the Hon"ble Apex ....
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....ider/bogus suppliers were being used by certain parties to obtained bogus bills. The 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 credibility of information relating to reopening remains un-assailed. In such factual scenario, the assessing officer has made the necessary enquiry. The so called suppliers have been found to be non existing. Assessee has not been able to provide any confirmation from any of the party. Assessee has also not been able to produce any of the parties. Necessary evidence relating to transportation of the goods was also not on record. In this factual scenario, it is amply clear that the assessee has obtained bogus purchase bills. Mere preparation of documents for purchases cannot controvert overwhelming evidence that the provider of these bills is bogus and non-existent. 13. The Sales Tax Department in its enquiry has found the parties to be providing bogus accommodation entries. Assessee has not been able to produce any of the parties. Neither the assessee has been able to produce any confirmation from these pa....