TaxTMI 
TaxTMI 
2021 (1) TMI 729
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....ed that assessee is indulged in bogus purchases. Accordingly, assessment was reopened by issuing notice u/s 148 of the Act on 24.03.2014 on account of escapement of income. In response, assessee filed an objection against re-assessment proceedings vide letter dated 07.05.2014. Further, notice u/s 142(1) was issued on 21.08.2014. Consequent upon restructuring, the case was transferred to DCIT and accordingly, fresh notices were issued and served upon the assessee and also intimated about the change of incumbent. In response, AR of the assessee filed the relevant information as called for. 4. After considering the submission of assessee, AO observed that assessee was unable to bring on record the relevant documentary evidence in the form of goods receipt, details of transportation of goods, etc. he observed that the circumstantial evidence itself proves the bogus nature of the transaction, the assessee took only bills from the parties as accommodation to explain the purchases, therefore the entire purchase cannot be added as bogus and needs to be taxed is the profit element embedded in such transaction. Accordingly, AO made assessment order u/s 143(3) r..w.s 147 of the Act by maki....
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....ad submitted the ledger accounts of the above parties and bank statement extracts evidencing the payment through bank cheque. In this case, the onus lies on the assessee to prove the genuineness of the purchases and the assessee had to prove that the suppliers were genuinely existing. The assessee has not made any efforts to discharge the onus and failed to produce any of the parties. In spite of the opportunities given by the Ld. AO, the assessee could not satisfactorily substantiate and establish the fact that there were genuine purchases from these parties. There was a report from DIT (lnv) stating that all the seller parties as per the list supplied by them are bogus including the parties appearing in the books of the appellant company and as stated above, the assessee has not made counter submission to show that those parties are really existing. The AO has no other alternative but to bring to tax the bogus purchases by adopting G.P. ratio method @ 15% of such purchases keeping in view the gain made by the appellant due to purchases of material in grey market without bills and adjusting the purchases with the invoices taken from the hawala traders under discussion. While doing....
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....he ratio of Jurisdictional High Court and erred in relying on case laws which are not applicable to the facts of the appellant hence , order of CIT( A) affirming the order of reassessment order passed by the Assessing Officer may be quashed . II. Addition of Rs. 13,94,243/- @ 15% of alleged accommodations bills of Rs. 92,94,953/- 3. Without prejudice to the above, the learned CIT (A) erred in confirming the addition of Rs. 13,94,243/- without appreciating that all the purchases were genuine and supported by documentary evidence and quantitative details were furnished and books of account is not rejected hence addition confirmed by the CIT(A) may be deleted. 4. Without prejudice to above the Learned CIT(A) erred in confirming the order of the AO without providing a copy of the documents relied on by AO and opportunity of cross examination was not provided hence the addition confirmed by the CIT(A) may be deleted. 5. Without prejudice to above the appellant has shown GP percentage ranging from 59 to 77% hence further addition of 15% GP is without any basis and may be directed to be deleted . 6. The Appellant craves leave to add, amend, del....
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....he party name Cape Town Mercantile Private Limited. And also brought to our notice difference in the value of transactions with the party. With reference to point No. 3 of the above said letter, he submitted that in the case of Cape Town Mercantile company private limited case, the honourable ITAT Mumbai held that the activities of the above said company is held to be genuine. He brought to notice the respective case which is placed on record. 10. Further he brought to notice page 80 of the paper book, it is a order passed by the AO in response to the objections raised by the assessee in its letter dated 7 May 2014. As per the clarification letter issued by the AO, it is stated that the assessment was reopened on the basis of information received from Sales Tax Department, he submitted that at the time of issue of notice under section 148, it was stated that the assessment was reopened based on the information received from DGIT investigation and based on the statement of Shri Praveen Kumar Jain. He submitted that in the clarification order it is stated that it is based on the information received from Sales Tax Department. He submitted that it is contradictory to each other.....
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....ain. When the assessee was sought for the reason of reopening of the assessment and based on the reasons supplied to them, assessee raised various objections for initiation of reassessment. Only in the order passed against the objections raised by the assessee, it was disclosed that the reassessment was initiated based on information from Sales Tax Department. Even though the reassessment was initiated based on the 3rd party information/agency, it is the duty of the assessing officer to verify the information supplied by the outside agency and also it is duty on the assessing officer to bring on record the failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment under consideration i.e., AY 2007 - 08 in relation to the information received from external agencies, considering the fact that the assessment was reopened beyond 4 years. We notice from the record that the assessee has filed its return of income and the same was taken up for scrutiny and assessment under section 143 (3) was completed and nowhere in the notice issued under section 148 of the Act discloses the fact of any failure on the part of the assessee, Even in the....
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....t his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. Reasons are the manifestations of mind of the Assessing Officer. The reasons recorded should be self-explanatory and should not keep the assessee guessing for the reasons. Reasons provide link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Officer, in the event of challenge to the reasons, must be able to justify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing affidavit or making oral submission, otherwise the reasons which were lacking in material particulars would get supplemented, by the time the matter reaches the Court, on the strength of affidavit or or....