AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 596
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.... cases of non-genuine bills emanating out of VAT Department, Mumbai was received through the DIT (Inv)-I, Delhi's letter F. No. DIT [Inv.]- I/MVAT/Del/2012-13/71 dated 26.02.2013. The DGIT (Inv) Mumbai communicated the details of non-genuine / bogus bills availed by the above assessee as per the information obtained from the Maharashtra VAT Department as a result of enquiries conducted by them. The information regarding M/s. Sanvik Engineers (India) Beneficiary Tin Hawala Tin Hawala Name Hawala PAN FY Amount 27650394720V 27090707756V Mahavir Sales Corporation AMMPM3778R 2009-10 1212598 27650394720V 27440688212V Tulsiani Rading Private Limited AADCT0405G 2009-10 4076273 27650394720V 27560694451V Samarth Enterprises APBPS3000G 2009-10 1628294 27650394720V 27600648257V Niddhish Impex Pvt AACCN6984H 2009-10 4630071 27650394720V 27750595164V Deep Enterprises AMTPS9884P 2009-10 4630071 Total 15847973 It is alleged that M/s. Sanvik Engineers India Pvt. Ltd. has availed bogus bills from the aforesaid five parties mentioned under the column of Hawala Name' amounting to Rs. 1,58,47,973/- ....
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....parties and to produce evidence of supply of material i.e. transport bills/ bilty etc and also to produce the parties in person to verify the authenticity of the of the transactions. It was submitted that it is not possible for the assesee to produce the suppliers since they are not the regular suppliers of the assessee company and furthermore project at Mumbai has already been completed in the year 2011. It was requested to call all the suppliers for their cross examination, since the assessee is not able to produce the same. The assessee also requested the Assessing Officer to provide the relevant material and opportunity to cross examine the said parties. It was submitted that information received from VAT department and the basis of their conclusion of the impugned suppliers to be bogus etc is unfounded and suspicious in nature. Since all these parties were registered as far as 2007and thus the silence of the VAT department on their conduct prior to these dates prior to the year in question convey unambiguously about the existence and genuiness of these parties. 6. However, the Assessing Officer was not satisfied and again asked the assessee to furnish evidence of supply and....
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....ssing on merit also. 9. Aggrieved with such order of the CIT(A), the revenue is in appeal before the Tribunal by raising the following grounds of appeal :- "1. The Ld. CIT(A) has erred in law and on facts in treating the reopening of the assessment proceedings u/s. 147 of the Income Tax Act 1961 as ab initio void. 2. The Ld. CIT(A) has erred in law and on facts in deleting the addition of Rs. 1,58,47,973/- made by the AO on account of bogus purchases based on information received from Maharashtra VAT department, an external evidence. 3. The appellant craves to amend, modify, alter, add or forego any grounds (s) of appeal at any time before or during the hearing of this appeal." 10. The Ld. DR strongly challenged the order of the CIT(A) in holding the reassessment proceedings as void. She submitted that when the information was received from a Government Department that the parties from whom the assesssee had purchased the material are only entry providers without doing any genuine business and the assessee was unable to produce the parties, then the action of the CIT(A) in annulling the reassessment proceedings is not proper. She submitted that when the purchases are bogus ....
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....hing the reassessment proceedings are concerned, we find the same is not proper under the facts and circumstances of the case. The Assessing Officer has acted on the basis of information supplied by the investigation wing of the department who in turn have received information from MVAT department that the assessee M/s. Sanvik Engineers Pvt. Ltd. has availed bogus bills from aforesaid five parties who are hawala dealers. The Assessing officer after obtaining the information has perused the assessment record and also has also gone through the various details filed by the Assessee during the course of original assessment proceedings. When the investigation wing has received specific information from another government department that assessee has indulged in hawala transaction by availing bogus purchases bills to inflate its purchases, therefore, it cannot be said that the Assessing Officer had no information or that there was no fresh material before the Assessing Officer for reopening of the assessment. So far as the observation of the CIT(A) that the Assessing Officer in the original assessment has considered these parties as genuine is concerned, the same is incorrect, in view of....
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...., we have proceeded on such basis. Despite this, the question arise whether the Revenue is correct in contending that the entire purchase amount should be added by way of assessee's additional income or the assessee is correct in contending that such logic cannot be applied. The finding of the CIT(A) and the Tribunal would suggest that the department had not disputed the assessee's sales. There was no discrepancy between the purchases shown by the assessee and the sales declared. That being the position, the Tribunal was correct in coming to the conclusion that the purchases cannot be rejected without disturbing the sales in case of a trader. The Tribunal, therefore, correctly restricted the additions limited to the extent of bringing the G. P. rate on purchases at the same rate of other genuine purchases. The decision of the Gujarat High court in the case of N. K. Industries Ltd. (surpa) cannot be applied without reference to the facts. In fact in paragraph 8 of the same Judgment the Court held and observed as under - "So far as the question regarding addition of Rs. 3,70,78,125/- as gross profit on sales of Rs. 37.08 crores made by the Assessing Officer despite the fact that ....