TaxTMI 
TaxTMI 
2018 (12) TMI 183
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....sessing Officer (A.O. for short) had received information from the Investigation Wing of the department that the assessee had taken accommodation bills for purchases from the parties declared as hawala operators by Maharashtra Sales Tax Department. During the course of re-assessment proceedings, it was seen by the AO that during the year under consideration, the assessee had claimed to have made total purchases of Rs. 5,10,93,918/- and out of which, purchases amounting to Rs. 2,02,79,106/- had been effected from the following party: Sr. No. Party who have issued bogus bills to the assessee Amount of such bogus bill (Rs.) 1 Parshva & Co. 36,40,816/- 2 Nikhil Enterprise 11,04,168/- 3 Jigan Enterprises 23,01,559/- 4 Amar Enterpri....
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....nt proceedings and the assessee was asked to produce the party, broker or transporter and also show cause as to why the purchases made from the aforesaid parties should not be disallowed. In response to the AO's above query, the AR of the assessee made written submissions wherein n was submitted that the purchases shown by the assessee from the said parties are genuine purchases and payments to these parties were also made through account payee cheque. Further, the assessee also expressed his inability to produce the parties. Further, the assessee also failed to furnish evidences, such as, delivery challans, transportation details etc, to substantiate his claim of purchases from the aforesaid party. The assessee could only furnish copie....
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....resentative and perusing the records. 11. We find that credible and 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 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 remained un-assailed before the ld. CIT(A). 12. As regards the reopening of the assessee, on a careful consideration, we note that in this case information was received by the Assessing Officer from DGIT Investigation (Mumbai) there are some part....
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....f any material. There is a list of such parties wherein the assessee is stated to be beneficiary of bogus purchase bills. 13. 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 requ....
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....rove 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. ITO (1999) 236 ITR 34 (Supreme Court)." 14. The above discussion and precedent from Apex Court fully justify the validity of reopening in this case. Since, the issue has been decided on the basis of the Hon'ble Apex Court decision, the other case laws referred by assessee are not supporting the assessee's case. 15. In such factual scenario, the assessing officer has made the necessary enquiry. The issue of notice to all the parties have returned unserved. Assessee has not been ....
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....s that the unassailable fact that the suppliers are non-existent and, thus, bogus should be ignored and only the documents being produced should be considered. This proposition is totally unsustainable in light of Hon'ble Apex Court decisions. 17. We further find that Hon'ble jurisdictional High Court in the case of Nikunj Eximp Enterprises (in Writ petition no 2860, order dt. 18.6.2014) has upheld 100% allowance for the purchases said to be bogus when the sales have not been doubted. However, the facts of that case were different. Furthermore, the sales in that case were basically to government departments. Hence, the ratio from this decision is not fully applicable on the facts of the case. 18. In these circumstances, the learned D....