TaxTMI 
TaxTMI 
2022 (10) TMI 684
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....nsidered assessment year 2008-09 as the lead case. 4. The assessee filed its return of income on 26/09/2008 declaring total income of Rs.48,64,877/-. Subsequent to the search action conducted on 21/07/2011 under section 132 of the Income-tax Act in the case of Shri Rajesh Mehta, who is the director the assessee company and a survey action at the premises of the assessee company, assessment order under section 143(3) read with section 153C dated 26/03/2014 was passed determining total income at Rs.2,93,92,537/-. The assessee was asked to furnish the details of purchases and sales made in the relevant assessment years by the Assessing Officer wherein the assessee has submitted the details of purchases from the following hawala parties:- S.No Name of the party Amount (Rs.) 1. M/s KRC Trading Co. Pvt Ltd 1,14,79,550 2. M/s B.A. Trading Co. Pvt Ltd 28,04,49,628 3 M/s Expansion Trading Co. Pvt Ltd 32,39,61,332 TOTAL 61,58,90,510 5. It was observed by the Assessing Officer that the said purchases made by the assessee pertaining to the parties referred to above are bogus parties as per the enquiries conducted by the Sales-tax Department, Maharashtra. The same seller....
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....as also agreed to providing accommodation entries without any actual business transaction. It was also observed that the directors of the assessee company for assessment year 2008-09 have been changed and thereupon huge bogus purchases were shown in the books of the assessee company. The Assessing Officer inferred that out of the total purchases, the purchases from bogus / hawala parties amounted to 33% to 71% in all the impugned assessment years. 6. It is observed by the Assessing Officer that the sales made by the assessee to many reputed companies such as HDIL, Patel Engineering, M/s Unity Infra Projects Ltd, M/s K Amish Kumar and M/s Valecha Engineering Ltd, etc being searched by the Investigation Wing of the department, who has failed to establish the genuineness of the transaction with the assessee company and its associate concerns. As the assessee failed to furnish documentary evidence pertaining to the purchases and sale and due to lack of maintenance of proper records, the Assessing Officer rejected the assessee's books of account as per the provisions of section 145(3) of the I.T. Act. The Assessing Officer further estimated 2% on the accommodation entries provided by t....
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.... the assessment order on page 2. The Ld.AR further stated that the assessee company was receiving commission @1% on such accommodation entries and the estimation of 2% by the lower authorities is an exorbitant rate charged on the assessee company. 11. The Ld.DR, on the other hand, contended that the assessee before us nor before the lower authorities has filed any documentary evidence such as bank accounts, confirmation from the parties, etc. pertaining to the bogus transactions. The Ld.DR further stated that the assessee has not filed any details as to the percentage of commission charged by the assessee company and also the details from whom such commission was taken. The Ld.AR stated that there is no evidence of return of income filed by the alleged parties. It is also stated that in the statement of the director of the assessee company, he has admitted that they are only into providing accommodation entry, has not been retracted till date. 12. Having heard the rival submissions and perused the materials on record, we proceed to decide grounds 2 & 3 where ground 1 is of general nature and needs no adjudication. Grounds 2 & 3 raised by the assessee pertains to the rejection of ....
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....said confirmation letters did not have details of name, PAN, etc of the persons, who have signed them. We further observe that some signature in the said confirmation letters were found to be identical with that of others. On this note, we direct the Assessing Officer to make a thorough enquiry pertaining to the said additional evidences to be furnished by the assessee and also to examine the genuineness of the persons furnishing the confirmation letters. With these observations, we remand this issue to the file of the Assessing Officer for admitting additional evidences and for considering this issue on merits based on the submission of the assessee. We also direct the Assessing Officer to consider on merits as to how 2% commission on the estimated sales has been arrived at by the Assessing Officer, in case the submission of the assessee on additional evidence is not to the satisfaction of the Assessing Officer. This ground of appeal is allowed, for statistical purpose. 15. Ground 4 pertains to the disallowance of deduction claimed under Chapter VIA of Rs.7,04,737/- made by the Assessing Officer and thereafter confirmed by the Ld.CIT(A). 16. The Ld.AR contended that the donation....