TaxTMI 
TaxTMI 
TaxTMI 
2018 (4) TMI 187
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....ming the addition on account of bogus purchases amounting to Rs. 5,12,541/- for assessment year 2010-11 and Rs. 2,53,601/- for assessment year 2011-12. 3. Brief facts of the case are that the assessment in the cases were reopened on account of information from Sales Tax Department that the assessee was a beneficiary of an accommodation bills of purchase from certain bogus hawala dealers. In this background, the Assessing Officer examined the issue. 4. During the course of assessment proceeding, the Assessing Officer issued summons u/s.131 of the act to all the four Hawala Parties. However, he could serve only on M/s.Gururaj Enterprises. Rest of the three of such summons came back unserved. Even Mr.Jayesh M.Shah of M/s.Gururaj Enterprises,....
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....en help from the provisions of section 101 of Indian Evidence Act 1872 and concluded that burden of proof lies on the assessee company. The Assessing Officer also referred that as per section 106 of Indian Evidence Act 1872, when any fact is specifically within the knowledge of any person, then burden of proving that fact is upon him. In the background of facts of the case and provisions of Indian Evidence Act, it was concluded by the Assessing Officer that the assessee company has failed to establish the genuineness of the purchases. The Assessing Officer also specifically mentioned that books of accounts, maintained by the assessee did not reflect true and genuine picture of financial status of the company. Finally, the Assessing Officer ....
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.... 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. From the above, I find that tangible and cogent incriminating material were received by the AO which clearly showed that the assessee wa....
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....ant 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 subjective satisfaction ITO v. Selected Dalurband Coal Co, (P.) Ltd. (1996) 217 ITR 597 (Supreme Court): Raymond Woollen Mills Ltd. v. ....
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.... this factual scenario it is amply 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 and there is no cogent evidence of transportation of goods. The sales tax Department in its enquiry have found the 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 confirmati....
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....of the apex court on the issue of bogus purchases in the case of CIT Jaipur vs Shruti Gems in ITA No. 658 of 2009. The Hon'ble High Court has referred to the decision of CIT Jaipur vs. Aditya Gems, D. B. in ITA No. 234 of 2008 dated 02.11.2016, wherein the Hon'ble Court had inter alia held as under: "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 whereby the Supreme Court has dismissed the SLP confirmed the order dated 09.12.2014 passed by the Gujarat High Court and other decisions of the High Court of Gujarat in the case of Sanjay Oilcake Industries Vs. Commissioner of Income Tax (2009) 316 ITR 274 (Guj) an....