TaxTMI 
TaxTMI 
2025 (6) TMI 145
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....eopening notice on 19/03/2015. 3. In the facts and circumstances of the case and in law, the learned A.O. erred adding Rs. 10,93,845 i.e. 25% of the total purchases of Rs. 43,75,381/- on account of bogus purchases from M/s Arun Paper & Iron Trader. 4. In the facts and circumstances of the case and in law, the learned A.O. erred in making above additions by overlooking the submissions made such as copies of purchase bills, inward and outward quantitative stock, ledger account of Arun Paper & Iron Traders. 5. In the facts and circumstances of the case and in law, the learned A.O. erred in making above additions by not considering the reply submitted by Arun paper & Iron Trader on 10/04/2018 against the summons issued u/s 131 of the Act issued on 02/04/2018 wherein Mr Arun. Agarwal, Proprietor of M/s Arun paper & Iron Trader has submitted all the documents as requested by the Ld AO and also the Income Tax Assessment Order for AY 2007-08 & AY 2008-09 and als has clearly mentioned that they are not declared Havala or Bogus by either Sales Tax Department or Income Tax Department. Further they have mentioned that Income Tax Department itself has considered the s....
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....ase of the assessee was reopened u/s. 147 of the Act on the grounds that assessee was engaged in the practice of implanting bogus purchases by taking accommodation entries. Based on information received by the Ld.AO, assessee had availed bogus purchase bills from M/s. Arun Paper and Iron Traders amounting to Rs. 43,75,381/-. Assessee was asked to furnish details regarding purchases made from M/s. Arun Paper and Iron Traders. In response, assessee had submitted copies of purchase bills, copies of ledger account, sales inward and outward quantitative stock details. In this respect, written submission made by the assessee vide letter dated 05.01.2016, is placed on record in the paper book at page no.50. Relevant supporting documents as stated above also froms part of the paper book along with this letter. Ld.AO also called for details of delivery challans to demonstrate actual delivery of the goods purchased. 4. According to the assessee, goods purchased by him are at landed price i.e. price at factory which include transportation cost and the said transport service was provided and arranged by way the vendor by of local tempo. Assessee also stated that the payments to the vendor h....
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....& 2008-09." 6. In para 6 of the remand report, Ld.AO noted that Shri. Arun Agarwal was requested to appear before his office vide order sheet entry dated 10.04.2018, for recording statement on oath, but he failed to do so. This observation made by the Ld.AO is contrary to the recoding of fact made by him in para 5 where it is noted that he had appeared and filed the above listed documents and details. Assessee was provided opportunity to file the rejoinder. Assessee strongly submitted that case of Shri. Arun Agarwal was also reopened for AY 2007-08 and AY 2008-09 for similar reason that he had entered into bogus purchase transactions with certain concerns. In the reassessment proceedings of Shri. Arun Agarwal, the order was passed, dated 11.03.2015, by the office of ITO 24(1)(2), Mumbai, whereby disallowance was made on account of bogus purchases in his assessment by taking 12.5% of the alleged total bogus purchase of Rs. 10,09,11,493/- from two parties viz. Foram Traders/Apple Industries and VSK Enterprises. There was nothing alleged on the sales made by Shri. Arun Agarwal to the assessee in his assessment. It was also submitted that the aforesaid two dealers of M/s. Arun Paper....
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....Ans: We used to trade in craft paper in my proprietary concern M/s Arun Paper and Iron traders. We used to procure order from various customers and brokers and further place the same to our respective suppliers and brokers. This business was running till January 2012. After that I am salaried employee. My PAN is ADKPA5263C. Q3. What is the Source of your income now in F.Y. 2014-15 and what was it in F.Y. 2006-07 to F.Y. 2009-10. Ans. In F.Y. 2014-15, I am a salaried person getting salary from M/s Sunshine Peptech Put. Ltd. Co. having address at 375, Abitgarh Village, Wada, Thane, Maharashtra. However, my source of income during F.Y. 2006-07 to F.Y. 2009-10 and upto December 2011 was my income from my proprietary concern M/s Arun Paper and Iron Traders and I was a director of M/s Bigwin Paper Distributors Pvt. Ltd. Q4. I am showing you copies of two statement recorded by ADIT (Inv.) dated 06/12/2012 & 07/12/2012. Please confirm that the statement was given by you on oath. Ans. Yes. I confirm that the statement was given by me on oath." 7.2. In the case of assessment of spouse of the assessee, addition of 25% of the alleged bogus purchases was m....
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....n the decision of Co-ordinate Bench in the case of spouse of the assessee i.e. Smt. Anuradha Dalmia which is on identical fact pattern wherein addition so made was deleted, Ld. CIT(A) observed that assessee has not furnished a copy of the order and therefore, could not take cognisance of the same. Ld.CIT(A) made certain observations to distinguish the order of Co-ordinate Bench in the case of Smt. Anuradha Dalmia by observing that Shri. Arun Agarwal had appeared before the Ld.AO and had confirmed the sale of goods to the assessee on statement under oath supported by ledger and bank statement. However, in the case of the assessee, Shri. Arun Agarwal has failed to furnish any statement under oath and supporting documents to verify the transactions. 8.1. We fail to understand when the vendor has appeared in person before the Ld.AO in the assessment proceeding and has also confirmed the transaction in the case of the spouse of the assessee as well as in the case of assessee, in the remand proceedings, Ld.AO himself has taken note of the fact of appearance of Shri. Arun Agarwal who has furnish the required documentary evidences then, how many times would department need the statement....
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.... matter reached up to the Tribunal stage wherein the Co-ordinate Bench had taken note of appearance of Shri. Arun Agarwal along with his confirmation of the transaction, supported by documentary evidence, based on which relief was granted to the assessee by upholding the order of the Ld. CIT(A). 9.2. We also note that case of the vendor i.e. Shri. Arun Agarwal was taken up for scrutiny assessment, again on the same premise of entering into accommodation entries by arranging bogus purchases by him as recorded in his books of accounts. In his assessment, allegation was on he making bogus purchase entry from two parties for which addition was made by the Ld.AO by adopting 12.5% of the total amount of alleged bogus purchase transaction. There is no whisper about the sales made by Shri. Arun Agarwal to the assessee in his assessment which implies that the same was accepted in his assessment. 9.3. Also, Ld. Counsel for the assessee had brought on record, decision of Co-ordinate Bench in the case of Bigwin Paper Distributors Pvt. Ltd. vs. ITO for AY 2010-11 and AY 2011-12 in ITA No.5296 & 5297/Mum/2016, order dated 07.03.2017. Shri. Arun Agarwal is a director in Bigwin Paper Distrib....
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.... did not appear before the Ld.AO during the course of assessment proceedings and failed to prove the genuineness of the purchase. The said assessment was completed ex-parte u/s. 144 r.w.s 147 of the Act. Hon'ble Court also observed in para 17 about the non-appearance of assessee before the Ld.AO for which there is no justification. Again, it noted in para 29 that the assessee chose not to attend the reassessment proceedings even though the notices were sent by post, email and affixture. Accordingly, in para 13, Hon'ble Court concluded that assessee having not joined the reassessment proceedings, the contention raised by the assessee are to be rejected. Observation of the Hon'ble Court while rejecting the contention of the assessee are: "30. We fail to understand that the respondent-assessee having consciously and intentionally decided not to join the investigation, cannot now contend that the appellant-revenue should have given them all the details before making the addition. In our view, such a conduct of the respondent-assessee cannot be accepted. It was incumbent upon the respondent-assessee to have joined the re-assessment proceedings, discharge the initial onus of pro....