TaxTMI 
TaxTMI 
2022 (3) TMI 1196
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....us purchase made by the AO for the A. Y. 2009-10?" B. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in not considering that the addition was made on the basis of information received from DIT(Inv.) and Sales Tex Department, Maharashtra with regard to bogus purchase made by the assessee from dealers without supply of actual goods?" C. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in not considering that the hawala operators have admitted on oath before the Sales Tax Authorities that they have not sold any material to anybody?" D. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in not considering that the assessee could not prove the genuineness and creditworthiness of purchase transactions during the course of assessment proceedings?" E. Whether on the facts and circumstances of the case and in Law, the Ld. CIT (A) has erred in law by not appreciating the fact that the onus to justify the claim of expenses is on the assessee and the same has failed to discharge it in relation to the purchases made from....
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....e was received. Therefore, assessee was asked to produce the above party. Same were not produced and therefore, the Assessing Officer found that these parties are bogus. Accordingly, the learned Assessing Officer after recording several judicial precedents held that assessee obtained bogus bills from following further two parties namely Aakar Engineering and Mfg. Co. Ltd. of Rs. 18,55,500/- and Mr. Krishana Trading Co. of Rs. 28,11,952/-. Thus, the total bogus purchases made by the assessee is Rs. 86,75,913/-. He made the addition of the above amount and passed an order on 19th March 2014 under section 143(3) read with section 147 of the Act determining the total income of the assessee at Rs. 1,16,84,280/-. The only addition was of Rs. 86,75,913/- on account of bogus purchases under section 69C of the Act. 06. Assessee preferred appeal before learned CIT (A) who accepted argument of the assessee that only profit embedded in non-genuine purchases should have been added. Therefore, he directed Ld Assessing Officer to adopt 12.5% as profit [ income] out of the bogus purchases of Rs. 86,75,913/- Accordingly, he upheld the addition of Rs. 10,84,489/-. 07. Therefore, the Assessing ....
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.... quantitative details have also not been produced therefore the case of the assessee was reopened and subsequently during the course of assessment proceedings the assessee could not produce the parties as well as the notice is sent to the parties u/s 133 (6) also returned and therefore the addition of Rs. 8,675,913 was made by the learned assessing officer which is hundred percent of the purchases from alleged bogus parties. The assessee preferred an appeal before the learned CIT - A who decided the matter as Under:- '4. Based on the information received that the assessee is one of the beneficiaries of accommodation bills in the form of purchases, the AO reopened the assessment proceedings u/s 147 of the IT act. The AO got information from the office of DGIT (investigation) Mumbai that the appellant got purchases from the following parties as under:- 1. Nisha Enterprises Rs. 2295 2. Sai Leela trading private limited Rs. 4,006,166 total Rs. 4,008,461 Based on since tax survey reports, the assessee has indulged in bogus purchases by getting accommodation bills to the tune of Rs. 4,008,461/- from the above 2 parties who have not resp....
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....ement was also not provided to the appellant for confrontation and for cross examination to the appellant, the statement of third parties given before the sense tax department cannot be used in the income tax proceedings. Even the third-party statements do not state the name of the appellant. The AR of the appellant has alternatively requested that the disallowance of entire purchases made in assessment is erroneous, as it would lead to a case of taxing the entire sales without considering the corresponding purchases. Since the appellant made sales out of the corresponding purchases, hence the same cannot be treated as bogus and only profit embedded in the corresponding sales could be brought to tax and requested that a reasonable 5% on Rs. 8,675,913/- which works out to Rs. 4,33,795/- may be calculated as estimated suppressed income as GP to the income of the appellant. The appellant relied on various case laws as mentioned below- 1 CIT versus Simit P Seth 38 taxman 385 (Gujarat) 2 CIT versus Bholanath private limited 355 ITR 290 (Gujarat) 3. CIT versus president industries 258 ITR 654 (Gujarat) 4. free India assurance services Ltd vers....
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.... purchases are not bogus. Here there is no issue on that aspect but about determination of profit only. Further in case of N K proteins Limited [2016] 72 taxmann.com 289 (Gujarat)/[2017] 292 CTR 354] during the course of search proceedings at the office premises of NKPL, blank signed cheque books and vouchers of number of concerns were found. Endorsed blank cheques of NKPL by these concerns were also found from the office premises of NKPL wherein the endorsement was on the back of the cheques. Blank bill books, letter heads and vouchers of these concerns were found and seized from the factory premises of NKPL. Purchases made from these concerns have been treated by the Assessing Officer as bogus purchases in view of elaborate reasons recorded in the assessment order. The entire deposits in the bank accounts of these parties were treated as assessee's income on protective basis. In present case there is no such evidences found. 013. The claim of the assessee that assessee has discharged its complete onus as well as the entire addition has been made purely on the basis of the assumptions and surmises is purely devoid of any merit. The assessee failed to produce the parties fro....