TaxTMI 
TaxTMI 
2018 (6) TMI 1183
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....arned Assessing Office are invalid. Therefore, the entire reassessment proceedings be quashed. II. On the facts and circumstances of the case, the addition made by the AO of Rs. 44,94,655 on account of purchases from alleged non genuine supplier is bad in equity and totally unwarranted. III. On the facts and circumstances of the case and in law, the learned AO erred in levying interest under Section 234B, 234C, 234D of the Act." 2. The brief facts of the case are that the assessee, proprietor of M/s Khushi Technologies engaged in the business of resale of chemicals, surgical, filter paper and general items, filed her return of income for AY 2007-08 on 20-10-2007 declaring total income of Rs. 6,14,290. Subsequently, the case has been re....
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....fit of 15% on the transaction effected through the above two firms. However, later on, on 09-02-2015, the assessee has filed another letter objecting to the reopening of the assessment. 3. The AO, after considering relevant submissions of the assessee and also taking into account information received from sales-tax department, opined that purchases made from above two firms is non genuine as the assessee failed to furnish any evidence to support purchases made from above two concerns. The AO further observed that though the assessee has filed certain evidences including purchase bills and payment proof to prove purchases, failed to file further evidences in the backdrop of clear findings of the DGIT (Inv) that the said parties are hawala o....
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....missions of the assessee and also relying upon certain judicial precedents rejected ground raised by the assessee challenging reopening of the assessment by holding that the AO has received information from DGIT(Inv) which constitutes a tangible material for formation of reasonable belief of escapement of income, therefore, there is no merit in the arguments of the assessee that the AO has formed reasonable belief without there being any tangible materials. Insofar as addition made towards disallowance of purchases, the CIT(A) observed that it is evident from the fact that during the course of assessment proceedings she had admitted estimation of net profit of 15% on the transaction effected through above said two firms. Therefore, opined t....
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....rchase bills and payment proof. The AO has brought out clear fact to the effect that the parties are involved in providing accommodation entries without any actual business which has been confirmed during the course of investigation proceedings in statement recorded. Therefore, there is no merit in the argument of the assessee that the purchases from above parties are supported by valid evidence. 8. We have heard both the parties and perused the material available on record. There is no dispute with regard to the fact that the assessee has effected purchases from M/s Om Navkar Enterprises and M/s N.P. Chemie which appeared in the list of hawala dealers prepared by sales-tax department. The information received from Investigation Wing clear....
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....n facts of each case, has directed to estimate net profit at 12.5% to 15%. The Hon'ble Gujarat High Court in the case of Vijay Proteins Ltd vs CIT 2017-TIOL-23-SG-IT has held that addition cannot be made to total purchases made from bogus suppliers, but what needs to be taxed is only the profit element embedded in such purchases. In yet another case, the Hon'ble Gujarat High Court in the case of CIT vs Simit P Sheth 2013 (10) TMI 1028 observed that no uniform yardstick could be adopted for estimation of profit on bogus purchases. Therefore, we are of the considered view that in case of bogus purchases, only profit element embedded in such purchases needs to be taxed but not total purchases that too, when assessee has filed certain evidence ....