AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 1449
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....er of Income Tax (Appeal)-30, Mumbai erred in confirming addition of Rs. 47,91,826/- on estimated profit element on treating the genuine purchases of Rs. 3,83,34,602/- as non-genuine purchases considering the purchases as bogus from the 11 parties of which information has been received from Sales Tax Department and the said information has been, forwarded by the DCIT (Inv.),Wing, Mumbai to the Assessing Officer. Provisions of the Act ought to have been properly construed and regard being had to facts of the case no such additions to be made. Reasons assigned by him are wrong and insufficient to justify the additions. 2. The order made under section u/s 143(3) r.w.s. 147 of the Act by the learned Assessing Officer is bad-in-law, ultra virus and without appreciating the facts and law in their proper perspective and is liable to be annulled. 3. The appellant crave leave to add, amend, alter and / or vary any of the grounds of appeal before or at the time of hearing. The appellant disputes all the additions and variations made to the total income of the appellant. The appellant pray that additions made to the total income may kindly be deleted." 3. The brief facts of the case ....
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....as processed u/s 143(1) and no assessment u/s 143(3) was framed by Revenue . It is also undisputed that notice u/s 148 was issued within 4 years from the end of the assessment year. The assessee was called upon by the AO to explain the same . The assessee could not link the purchases with the corresponding sales . The assessee could not produce books of accounts before the AO . The assessee also could not produce these parties before the AO. The assessee vide order sheet entry dated 05.03.2015 requested the AO during the course of re-assessment proceedings to make reasonable additions with respect to the alleged bogus purchases. The AO , thus , quantified the profit element in these alleged bogus purchases by bringing 12.5% of the alleged bogus purchases of Rs. 3,83,34,602/- as profit element embedded in these alleged bogus purchases to be a reasonable etimation by adding the same to business income of the assessee which led to the additions to the tune of Rs. 47,91,826/- to the returned income in the hands of the assessee, vide assessment order dated 10-03-2015 passed u/s 143(3) r.w.s. 147 of the 1961 Act. 4. Aggrieved by the assessment order dated 10-03-2015 passed by the AO u/s....
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....their attendance. It was for the appellant to produce them as per Civil Procedure Code, which applies on all fours to the income-tax proceedings. It is trite that once a transaction is shown to be of the nature of income, the onus shifts to the assessee to show that the same is not taxable. It can thus be safely assumed that the appellant has grossly failed in its duty to mitigate the burden cast upon, it in so far as proving the genuineness of the transaction from the said party is concerned. 5.6 AR in the written submissions also stated that the AO not obtained the details of KYC from the bank, not summoned the parties etc., to verify the genuineness of the purchases. In this regard it is pertinent to mention that while dealing with the concept of burden of proof, onus of proving is always on the person who makes the .claim and not on the Revenue. While dealing with the issue of deciding the burden of proof, Hon'ble Supreme Court in the cases of CIT Vs. Durgaprasad More 82 TTR 540 and Sumati Dayal Vs. CIT 214 ITR 801 has held that the apparent must be considered real until it is shown that there are reasons to believe that the apparent is not real and that Taxing Authoritie....
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....ed, without reference to the onus and without relying on the circumstances that onus lies on a particular party, the issue is determined on facts and the onus cannot be said to have influenced the decisions. However, in the instant case, the appellant has miserably failed ta lead evidence. 5.8 With regard to the claim of the appellant that the parties are not offered for cross-examination by the appellant, it is to be noted that the right of cross-examination is not automatic, but it would be incumbent only in a situation where the appellant is able to prlma facie demonstrate that the onus cast on him to establish his version of affairs is based on primary evidence. In this case, the appellant had failed to lead any primary evidence, viz. GRNs, octroi receipts, delivery challans, etc. which would show that the supplies were indeed made. In such a situation, the AO is justified in drawing the inference that the purchases aggregating to Rs. 3,83,34,602/- are not genuine. As regards the issue of the denial of the cross examination, in the case of GTC Industries Ltd. vs. Assistant Commissioner of Income-tax [1998] 65 ITD 380 (BOM), it was held as under: "105. In our opinion right t....
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....ed by the above decision of Hon'bie Gujarat High Court in the case of CIT vs. Simit Sheth 356 UR 451 {Guj).The facts of the present case are exactly similar to the cited case. The appellant made purchases from eleven parties who are said to be hawala operators, who are indulged in providing bogus bills without supply of any material. Independent inquiries conducted revealed that no parties existed In the given addresses. When asked to produce the parties during the assessment proceedings by the AO as well as in the present proceedings by the undersigned, appellant expressed his inability to do so. Moreover, AR, vide order sheet noting dated 05-03-2015 requested the AO to complete the assessment after making a reasonable addition. Under these circumstances, as the appellant could not prove the genuineness of the claim of purchases debited to the profit & loss account, there is no other way to the AO, but to estimate the profit element embedded on such purchases. As stated earlier, the facts of the case are exactly similar to the cited case, therefore respectfully following the above cited decision in the case of Simlth P. Sheth, the action of the AO in estimating the addition @1....
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....ore the learned CIT(A) in this regard which led to dismissal of the aforesaid legal ground also. Thus, in nut-shell learned CIT(A) dismissed the appeal of the assessee. 5. Aggrieved by the dismissal of appeal by learned CIT(A), the assessee has come in an appeal before the tribunal. None appeared on behalf of the assessee when the appeal was called for hearing before the Bench on 19-09-2018. It is observed from order sheet entries in the file that even on earlier occasions when the appeal was fixed for hearing before the Bench, the assessee chose not to appear before the Bench. As per record available on file , it could be seen that notice sent by RPAD was duly served on assessee but despite service of notice for hearing , none attended on 19-09-2018 on behalf of the assessee before the Bench when the appeal was called for hearing before the Bench. The Ld. DR on the other hand relied upon orders of the authorities below and prayed that the order of learned CIT(A) is well reasoned detailed order which should be confirmed and appeal of the assessee be dismissed. 6. We have heard contentions of learned DR as well as perused the material on record including orders of the authorities ....
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....any business. This aforesaid material and tangible incriminating information which was received by the AO from DGIT(Inv.), Mumbai which incriminating information in turn was based on information furnished by Maharashtra VAT authorities to Investigation wing led to formation of belief by the AO that income of the assessee has escaped assessment which led to the reopening of the assessment u/s. 147 of the Act by the AO wherein notice u/s. 148 was issued by the AO to the assessee on 25.02.2014 which was stated by the AO to have been duly served on the assessee . Thus, it was a fresh material and tangible incriminating material which was the basis of having reasons to belief by the AO to reopen the concluded assessment within provisions of Section 147 of the 1961 Act. It is undisputed that originally the return of income was processed u/s 143(1) and no assessment u/s 143(3) was framed as well notices u/s 148 was issued within 4 years from the end of the assessment year. The first proviso to Section 147 is , thus, not applicable. The assessee was confronted with this incriminating information by the AO wherein assessee was called upon by the AO to explain the same . The assessee could n....