TaxTMI 
TaxTMI 
2017 (9) TMI 1748
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....GP by the Ld. A.O. Reasons assigned by him for doing the same are wrong and insufficient. 3) On the facts and circumstances of the case as well as in the law the Learned AO has erred in rejecting books of account of the appellant that to without providing opportunity of being heard and without issuing show cause. Reason assigned by him for doing the same was wrong and insufficient. 4) The order passed by the Learned A.O. is devoid of any merit, arbitrary, uncalled for and bad in law, the appellant be given such relief or reliefs as prayed for. 5) Appellant craves leave to add, alter and/or modify the grounds of appeal on or before the date of hearing of the appeal." 3. Brief facts of the case are as under:- 3.1 The appellant firm which is in the business of trading in ferrous and non ferrous metals filed the original return of income for A.Y. 2010-11 on 7.8.2010 declaring total income of Rs. 4,25,660/- and filed a revised return of income on 16.09.2010 declaring a total income of Rs. 4,75,660/-. The AO received information from the DGIT(Inv.), Mumbai who in turn received information from the sales tax department about some accommodation entry provider for purchases. The inf....
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....he has blocked Department from further probing into the issue and therefore this issue is non-verifiable on account of assessee's clandestine activities and therefore it has to be accepted against the assessee and in favor of the Department. Had the assessee produced the alleged suppliers for examination, the issues would have been easily probed into and the real game plan of the assessee would have exposed to the advantage of the Department. Thus, there is no onus on the Department to whatsoever to prove beyond this what has been done in this case. In other words, by not filing the confirmations and producing some of the alleged suppliers for examination on oath, the assessee failed to discharge the primary onus to prove the genuineness of the alleged purchases and therefore Department is at liberty to take a position in the interest of the Revenue made the section 40A(3) redundant in his case. 3.3. The issues considered for disallowance is the core expenditure incurred on the bogus purchases and some element of benefit assessee got on the excise and sales tax component on the purchases. In--view of the above facts and circumstances of the case and considering the assessee&#....
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....er this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned ( hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year." 4.2.1. The section merely says that the AO has to have reason to believe that any income chargeable to tax has escaped assessment. Reason to believe be on the basis of any information which comes to his possession or This information is more than enough for any reasonable person to reason to believe that income has escaped assessment. Further, the information is not anonymous information but authenticated information received from a government department. The AO or any reasonable person in his place would not ignore or over look this kind of information. If the AO is not satisfied with the reason, he would not have issued notice u/s.148. The very fact that reasons are recorded and notice u/s.148 is issued goes to show that the AO has applied his mind and satisfied himself about the reopening of the case. The reasons recorded are not vague and scanty but precise and concrete. In this case, the information has come from the Investigation....
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....ases with verifiable and contemporaneous evidences, the AO inferred that the appellant has not purchased the goods from the alleged suppliers but must have got them from other parties in the grey market at comparatively lesser prices. Therefore, he made the GP addition of 12.5% of the alleged bogus purchases which worked out to Rs. 22,70,666/-. 5.2. The appellant chose not to represent the case inspite of giving three opportunities and therefore no submissions are filed. 5.3. The Hon'ble ITAT, Ahmedabad `C' Bench in the case of Vijay Proteins Ltd. vs. ACIT 58 ITD 0428 held that in similar circumstances, 25% of the purchase price accounted through fictitious invoices has to be disallowed. The Hon'ble High Court of Gujarat in the case of Sanjay Oil cakes v/s CIT 316 ITR 0274 dealt with similar case where some of the alleged suppliers who had issued bills to the assessee were not genuine as they were not traceable. The goods must have been received from other parties. The likelihood of the purchase price of these alleged purchases being inflated could not be ruled out and therefore the Hon'ble High Court has upheld the decision of CIT(A) and the ITAT disallowing 25....
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....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. 11. From the above, I 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 guil....
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....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 obtain 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 credibility of information relating to reopening remains unassailed. Furthermore, it is noted that in such factual scenario Assessing Officer has made the necessary enquiry. The issue of notice to all the parties have returned unserved. 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. 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. As held by Hon'ble Apex Court in the case of Durga Prasad More (82 ITR 540) and Sumati Dayal (214 ITR 801), Revenue authorities are not supposed to put on blinkers. In the present case, the assessee want....