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TaxTMI 
TaxTMI 
2017 (12) TMI 1667
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....on facts. 2. Reassessment is bad in law and void ab inito: 2.1 The Ld. CIT(A) erred in upholding the reassessment order passed by the Assessing Officer which is bad in law and void ab initio as it is based on conjectures and surmises without there being concrete reason that the income has escaped the assessment. 3. Disallowance of 12.5% of certain purchases alleged to be bogus in nature. 3.1 The Ld. CIT(A) grossly erred in making a disallowance of 12.5% made by the AO in respect of purchases alleged to be bogus in nature based on the information received the Sales Tax Department, without considering the strong evidence and details submissions given by the appellant. 3.2 The Ld. CIT(A) partly upheld the disallowance made by the Assessing Officer without appreciating that the non-payment of VAT by the seller should nor form the basis of disallowance of genuine purchases. 3.3 The Ld. CIT(A) grossly erred in disallowing 12.5% of the alleged purchases which is arbitrary and has no basis, even when the evidence s and records submitted by the appellant as well as the corresponding sales to the alleged purchases were not disputed and we....
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....his return of income for the A.Y. 2009-10 on 27.09.2009 declaring total income to the tune of Rs. 6,07,580/-. The return was processed u/s 143(1) of the I.T. Act. Thereafter, an information was received from DGIT(Inv.), Mumbai which was forwarded by virtue of letter no. CIT-21/H.Qrs/Sales Tax Infor/2012-13 26.02.2013 in which it was conveyed that the assessee has taken the accommodation entries from various parties without any actual dealing, the assessee received the accommodation entries from the following 20 parties.:- S no. Name of the bill provider Tin No. Amount 1 Dhruv Sales Corporation 27760622173V 14,07,177 2 Sachi Mercantile P. Ltd. 27770610285V 19,23,724 3 J B Interlink 27800298365V 24,70,753 4 P.K. Trading company 27830258239V 26,74,095 5 K.K. Trading Company 27960673085V 7,03,162 6 Vitarag Trading Company 27830385697V 23,74,939 7 Bhumi Enterprise 27860587392V 9,77,485 8 Prayan Trading Company 27740535951V 25,91,461 9 Surachi Multitrade P. Ltd. 27200610259V 15,03,623 10 Hariom Traders 27840642014V 11,47,141 11 Sampark Steels 271703....
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....ng the course of assessment proceeding the matter of controversy in connection with the reopening of the case has been decided and the assessee also contested the case on merits by providing the documents available with him but the Assessing Officer was not satisfied, therefore, the bogus purchase to the tune of Rs. 4,14,91,279/- was added to the income of the assessee. The assessee filed an appeal before the CIT(A) who restricted the claim of the assessee to the extent of 12.5% of the bogus purchase. The assessee was not satisfied, therefore, filed the present appeal before us. However, the revenue has also filed an appeal in which the contention of the revenue is that whole addition of bogus purchase is liable to be added to the income of the assessee. ISSUE NO.1:- 7. Issue no. 1 is generally in nature which nowhere required any adjudication. ISSUE NO.2:- 8. At the time of argument the assessee did not press this issue, therefore, this issue is being decided in favour of the revenue against the assessee. ISSUE NO.3:- 9. Under this issue the assessee has challenged the addition confirmed by CIT(A) @ 12.5% of the bogus purchase. The Ld. Representative of the assessee....
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....ddition. On appraisal of both the orders we noticed that the Assessing Officer as well as CIT(A) nowhere took into consideration the evidence adduced by the assessee. It is to be seen what was the evidence given by assessee during the proceeding in connection with above mentioned 20 parties. The evidence which has been given by the assessee is being discussed below party-wise. 1. Dhruv Sales Corporation:- The assessee given the ledger A/c. which lies at page no. 157 of the paper book. The assessee has also submitted the confirmation of account by the supplier which lies at page no. 158 of the paper book. The assessee has also submitted the MVAT Challan which lies at page no. 159 of the paper book. The assessee has also furnished the invoices of purchase and sales along with delivery challans which lies at page no. 160-165 of the paper book. 2. Sachi Merchantile P. Ltd.:- The assessee given the ledger A/c. which lies at page no. 340 of the paper book. The assessee has also submitted the confirmation of account by the supplier which lies at page no. 341 of the paper book. The assessee has also submitted the MVAT challan which lies at page no. 342-344 of the paper bo....
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....the confirmation of account by the supplier which lies at page no. 361 of the paper book. The assessee has also submitted the Purchase and Sales invoices along with delivery challans which lies at page no. 362-377 of the paper book. 9. Surachi Multitrade P. Ltd. :- The assessee has given the ledger A/c. which lies at page no. 449 of the paper book. The assessee has also submitted the confirmation of account by the supplier which lies at page no. 450 of the paper book. The assessee has also submitted the MVAT challan which lies at page no. 451 of the paper book. The assessee has also submitted the Purchase and Sales invoices along with delivery challans which lies at page no. 452-462 of the paper book. 10. Hari Om Traders. :-The assessee has given the ledger A/c. which lies at page no. 268 of the paper book. The assessee has also submitted the confirmation of account by the supplier which lies at page no. 269 of the paper book. The assessee has also submitted the acknowledgements of VAT return which lies at page no. 270 of the paper book. The assessee has also submitted the Purchase and Sales invoices along with delivery challans which lies at page no. 271-282 of t....
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....tted the confirmation of account by the supplier which lies at page no. 207 of the paper book. The assessee has also submitted the MVAT challan which lies at page no. 208-209 of the paper book. The assessee has also submitted the Purchase and Sales invoices along with delivery challans which lies at page no. 210-225 of the paper book. 17. Anshu Merchantile P. Ltd.:- The assessee has given the ledger A/c. which lies at page no. 413 of the paper book. The assessee has also submitted the confirmation of account by the supplier which lies at page no. 414 of the paper book. The assessee has also submitted the MVAT challan which lies at page no. 415 of the paper book. The assessee has also submitted the Purchase and Sales invoices along with delivery challans which lies at page no. 416-427 of the paper book. 18. Omkar Trading Co.:- The assessee has given the ledger A/c. which lies at page no. 395 of the paper book. The assessee has also submitted the confirmation of account by the supplier which lies at page no. 396 of the paper book. The assessee has also submitted the MVAT challan which lies at page no. 397 of the paper book. The assessee has also submitted the Purcha....
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.... given address. However, notices served upon the Sampart Steel, Revika Trade Impex P. Ltd., Jindal Corporation but these parties nowhere submitted the required information. Sufficient evidence has been submitted by the assessee before the AO. Non service of notice nowhere falsify the claim of the assessee. The assessee has adduced the sufficient evidence in support of the claim against 20 parties. No doubt if the bogus purchase established then in the said circumstances the profit embedded to the bogus purchase is liable to be considered to the income of the assessee in view of the law settled in Vijay Protein Vs. CIT 58 ITT 458 (Ahd) and CIT Vs. Simit P Sheth 356 ITR 451 (Gujrat High Court). In the present case sale has not been disputed and the books of account have not been rejected In the instant case, when the assessee has adduced the sufficient evidence on record which has been discussed about therefore, in the said circumstances, we are of the view that the no addition is required to be made on account of bogus purchase. Non service of noticed is not a ground to raise the addition of bogus purchase to the income of the assessee in view of the law settled in CIT Vs. M/s. Niku....
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.... the plea of the Appellant that the notice for initiating reassessment proceedings was issued by Assessing Officer on 15th February, 2013 where as the AO received information from the CIT-21 regarding the alleged purchases vide letter dated 26.02,2013 which goes to show that the AO did not have reasons to believe that income has escaped assessment and initiated proceedings merely on reason to suspect. 2.3. The Ld. CIT(A) erred in upholding the reassessment order without appreciating that the AO had passed a vague order for rejecting the objection raised by the Appellant and the said order was not even a speaking order as per the principles laid down by the Supreme Court in the case of GKN Driveshafts (India) Limited. Disallowance of 6^ amounting to Rs. 15,60,270/- in respect of certain purchases alleged to be bogus in nature. 3.1 The Ld. CIT(A) grossly erred in making a disallowance of 6^ in respect of purchases amounting to Rs. 15,60,270/- alleged to be bogus in nature based on the information received from the Sales Tax Department, without considering the strong evidence and details submissions given by the appellant. 3.2 The Ld. CIT(A) partly ....
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....eciate the finding of the Assessing Officer that the purchases have been made out of undisclosed income and the same remained unexplained which required to be added u/s 69C of the I.T. Act. 5. On the facts and circumstances of the case, the Ld. CIT(A) erred in sustaining the addition to the extent of Rs. 15,60,270/- by taking the GP @ 6% of the bogus purchases of Rs. 2,60,04,503/- not considering the facts that the entire purchases are bogus. 6. The appellant prays that the order of the CIT(A) on the above grounds be reversed and that of the Assessing Officer be restored. 7. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary." 15. The facts of the present case are the same as mentioned above in the appeal no 277/M/2017, therefore, there is no need to repeat the same. However, the figure is different. In the instant case, the assessee has raised the objection of validity of issuance of notice u/s 148 of the I.T. Act as well as also raised the question of merits. ISSUE NO.1:- 16. Issue no. 1 is generally in nature which nowhere required any adjudication. ISSUE NO.2:- 17. Under this issue the as....