TaxTMI 
TaxTMI 
2020 (12) TMI 212
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Sanjiw Kumar Singh was recorded on oath u/s 133A of the Act on 10.05.2016 by the Directorate of Investigation, Kolkata who admitted that he was the operator of various entities to provide bogus bills to various beneficiaries in lieu of commission. As found by the Investigation Wing, the assessee was one of such beneficiaries and had received the bogus bills from the fake entities of Shri Sanjiw Kumar Singh as under: "A.Y. 2011-12 Rs. 2,80,75,372/- A.Y. 2012-13 Rs. 2,87,33,384/- A.Y. 2013-14 Rs. 48,00,838/- A.Y. 2014-15 Rs. 15,96,000/-" 3. On the basis of the above information received from the Investigation Wing, the Assessing Officer reopened the assessments for all the relevant four years that is A.Y. 2011-12, 2012-13, 2013-14, 2014-15 and notices u/s 148 were issued by him to the assessee after recording the reasons. In reply, letters were filed by the assessee requesting that the returns filed by it originally u/s 139(1) of the Act for all the four years under consideration may be treated as the returns filed in response to the notices issued u/s 148 of the Act. During the course of assessment proceedings, an attempt was made by the assessee to es....
X X X X Extracts X X X X
X X X X Extracts X X X X
....by the Ld. CIT(A) in this context as contained in paragraph no. 9 of the impugned order are extracted below: "I also find that the Ld. A.O has not disturbed the sales of the appellant firm, and there is adequate evidence that the items which were billed by the so called bogus parties were sold to actual parties. The alleged bogus party also had VAT Registration number, and it is seen that the VAT returns of the appellant have not been questioned by that Authority. This in my considered view suggest that there were actual purchases made, though given the backdrop they have been obtained in the gray market from persons who did not have VAT identities. I find that in the circumstances emanating from the case, the Ld. AO has treated the entire alleged purchases as bogus, but has not rejected the books of accounts, which in essence means that the sales have been found to be acceptable. In my considered view of the factual matrix, this would appear to be a case where purchases have been made from parties other than those mentioned in the books of accounts. These purchases were in all probability from the grey market, and accordingly bills obtained from the entry provide....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ur appellant's case the sales are supported by entries in corresponding Purchase Register and Stock Register, the addition in this score is not sustainable in law. iii. FOR THAT the appellant had raised point regarding opportunity of cross examination of the alleged supplier before the CIT(A) but no such opportunity was given to the appellant. iv. FOR THAT the appellant's case is squarely covered by the decision of Sliantivijay Jewels Ltd. vs. DCIT, Rg 8(3) in I. T.A./1045/Mum/2016 dated 13.04.2018. v. FOR THAT when the alleged disputed purchases have been accepted by the VAT Authorities in their respective Assessment Order / Audit Report, the Income Tax Authority cannot merely be relying upon statement recorded u/s 131 by one person namely 'Sanjiw Kumar Singh' whereas the suppliers are all corporate entities (who are different entities from the person whose statement was recorded) disallowed the bonafide purchases." 8. The department has also filed its appeal for A.Y. 2011-12 and 2012-13 raising the solitary common ground as under: "That on the facts and circumstances of the case, the Ld. CIT(A) erred in giving relief to the assessee by restr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lared by the assessee for all the four years under consideration. The average GP rate declared by the assessee for all the four years under consideration thus was less by about 3% than the average GP rate declared by the assessee for the immediately succeeding three years. Keeping in view this factual position, we are of the view that the additional GP rate of 3% adopted by the Ld. CIT(A) as the profit element embedded in the disputed purchases for all the four years under consideration was quite fair and reasonable and we do not find any justifiable reason to interfere with the same. All the four appeals of the assessee are accordingly dismissed. 10. As regards the solitary common issue involved in the appeals of the Revenue for A.Y. 2011-12 and 2012-13, the Ld. DR has submitted that the bills produced by the assessee in support of its claim for the purchases in question having been found to be bogus, the inevitable conclusion is that the said purchases would have been made by the assessee from grey market as agreed even by the Ld. CIT(A) in his impugned orders and since payments against the said purchases made from grey market must have been made in cash, the provisions of ....