TaxTMI 
TaxTMI 
2020 (3) TMI 1337
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....tial questions of law for consideration of this Court : "(i) Whether the Income-tax Appellate Tribunal was right in law in confirming the addition of Rs. 46,25,927/- being 25% of the alleged bogus purchases of Rs. 1,85,03,709/- without any reason or basis? (ii) Whether the Income-tax Appellate Tribunal was right in law in deciding the appeal ex parte without providing the appellant a sufficient opportunity of being heard, which is in violation of the principles of natural justice, and may be directed to do so now?" 4. This Court on 10.02.2020 passed the following order: "Draft amendment is allowed. The same shall be allowed at the earliest. Let Notice for final disposal be issued to the respondent, returnable on 17th February, 2020. Direct service is permitted." 5. At the outset, the learned senior counsel Mr. Tushar Hemani assisted by Ms. V.K. Parikh submitted that the Tribunal has passed an ex parte order without giving an opportunity of hearing to the appellant-assessee. 5.1 It was submitted that the appellant-assessee would not remain present before the Tribunal because the appellant-assessee did not receive any notice issued for hearing as the premises of the appe....
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....d all records connected with the business during the course of assessment proceedings. The Assessing Officer made an addition amounting to Rs. 5,67,49,767/- on account of bogus purchases and Rs. 1,13,84,071/- on account of undisclosed income. It was found that M/s Vishal Traders, Veerpur, District : Kheda and one Gayatri Cotton has issued bogus adjustment bills to various parties including the assessee. Shri Dharmendra Pandya, Proprietor of M/s Vishal Trades in his statement, admitted that M/s Vishal Traders was not in existence and that they used to issue adjustment/bogus bills to various parties including the assessee without delivery of the goods mentioned in the bills. The statement of Shri Dharmendra Pandya was also corroborated by the continuous pattern of deposit by cheques and immediate cash withdrawals in the various bank accounts of M/s Vishal Traders. The statement of Shri Dharmendra Pandya was also confirmed in the statement of Shri Madanlal Chandak (Shah) who introduced various parties to Shri Dharmendra Pandya. The submission of the partners of the assessee firm, Shri Bhagwan Bhai Patel also came to be recorded during the course of survey, wherein he admitted that onl....
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....hase from agriculturists / farmers / cultivators." But in the assessment order purchases in the name of Gayatri Cotton Co were also added back and during the appellate proceedings, it is established that only bills were obtained also from sister concern - Gayatri Cotton Co. Most importantly the details submitted show that the appellant has purchased cotton seeds of the same amount i.e. Rs. 1,14,91,977 from Gayatri Cotton Co and Gayatri Cotton Co too, which is the partner's propriety concern has purchased cotton seeds of the same amount i.e. Rs. 1,14,90,977 from the appellant. Secondly, payments of purchases of Rs. 1,13,73,994 could not be proved through the bank account of the appellant. Thirdly, Gayatri Cotton Co had claimed heavy purchases which could not be substantiated from farmers / unregistered dealers, therefore bills issued by it to the appellant firm are nothing but accommodation entries obtained by the appellant firm. But this is also true that the entire purchases from Vishal and Gayatri cannot be treated bogus because sales and stock position have not been punctured by the AO therefore, purchases shown from Gayatri Cotton Co. are a case of inflated purchases on whi....
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....he assessee and AO had made addition amounting to Rs. 5,67,49,767/- on account of bogus purchases and Rs. 1,13,84,071/- on account of undisclosed income treated as admitted by assessee in the statement dated 01.09.2008. Thus, AO had made total additions of Rs. 6,81,33,838/- and total income was derived at Rs. 6,81,67,060/- raising the demand amounting to Rs. 3,08,05,816/-. In appeal, the CIT(A) confirmed the addition to the extent of Rs. 1,41,87,441/- i.e. @25% of alleged bogus purchases. Before the CIT(A), Shri Bhagwanbhai P. Patel appeared who is managing the business of the assessee company and made statement that bills were actually obtained from M/s. Visahl Traders, purchases actually made from directly agriculturist/farmers/cultivators to regularize billings and stated that bills are adjusted but purchases are not bogus because from the purchases subsequently, assessee has also made sale as sales have not been disputed by the revenue authorities. But CIT(A) has accepted the part plea of the assessee and gave relief to the assessee of 75% of the total addition and just restricted 25% of Rs. 5,67,49,767/- which comes to Rs. 1,41,87,441/- and balance amount was direc....
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....lls from Vishal Traders; whereas the goods were purchased from farmers/cultivators. The Commissioner (Appeals) found that the Assessing Officer had neither disputed the sales nor the stock position and, therefore, accepted the contention of the assessee that it had made purchases from farmers who did not issue the bills and to regularise those purchases had obtained bills from Vishal Traders. The Commissioner (Appeals) thereafter placed reliance upon the decision of the jurisdictional High Court in the case of Sanjay Oil Cake Industries v. Commissioner of Income-tax, 316 ITR 274, and directed the Assessing Officer to restrict the addition made on account of bogus purchases from Vishal Traders to 25% of Rs. 5,67,49,767/- which comes to Rs. 1,41,87,441/- and further directed the balance to be deleted. 9. The Tribunal in the impugned order has concurred with the findings of fact recorded by the Commissioner (Appeals) and has upheld the order passed by him. 10. From the facts noted hereinabove, it is evident that while the purchases shown to be made from Vishal Traders were bogus, the respondent - assessee had in fact made purchases, which were duly reflected in the stock and there....
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....firmed the restriction of the addition made by the assessing Officer to 5% of the total bogus purchases made from M/s Vishal Traders in case of Gujarat Ambuja Export Ltd. It was therefore, alternatively submitted that following the decision in case of Commissioner of Income Tax vs. Gujarat Ambuja Export Ltd. in Tax Appeal Nos.840 and 844 of 2013, the addition may be restricted to 5% of the bogus purchases made from M/s Vishal Traders instead of 25%,of the total bogus purchases made by the CIT(A) and Tribunal. 14. On perusal of the of the order passed by this Court in Tax Appeal No. 840 and 844 of 2013, it appears that the facts of the case of Gujarat Ambuja Export Ltd. stand on different footing, as it was found by the CIT(A) as well as the Tribunal that the GP rate and net profit rate of the year under consideration were better than previous year. The stock register was properly maintained and the purchase in question was reflected in such stock register. 15. In such circumstances, the Court confirmed the order passed by the Tribunal by observing as under ; "Here also, we do not find that the Tribunal has committed any error so as to give rise to any question of law. The Tribu....