TaxTMI 
TaxTMI 
2018 (9) TMI 2168
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....5,89,799/-. The return of income filed by the assessee was processed as such under Sec. 143(1) of the Act. Subsequently, on the basis of information received from the Sales tax department through the office of the DGIT (Inv.), Mumbai, that the assessee had during the year under consideration obtained accommodation entries from certain parties involved in the business of providing bogus bills without actual delivery of goods, the case of the assessee was reopened under Sec.147 of the Act. 3. During the course of the assessment proceedings, the assessee was called upon by the A.O to explain the genuineness and veracity of the tainted purchase transactions which were claimed by him to have been entered into with the following parties: Sr. No. Name of the party Amt. 1. Nageshwar Enterprises Rs. 76,050/- 2. Parshva & Co. Rs. 42,84,878/- 3. Daksha Enterprises Rs. 13,50,258/- 4. Mahavir Enterprises Rs. 3,12,520/- Total Rs. 60,23,706/- The assessee in his reply submitted that he had made purchases from the aforementioned parties who were small time suppliers engaged in the business of trading in crude drugs etc. In order to....
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....ent, vide his order passed under Sec.143(3) r.w.s. 147 of the Act, dated 12.03.2015, therein also initiated penalty proceedings under Sec. 271(1)(c). The assessee did not assail the order passed by the A.O and accepted the addition made by him. 4. The A.O after the culmination of the assessment proceedings issued a "Show cause" notice (for short "SCN") to the assessee, therein calling upon him to explain as to why penalty under Sec. 271(1)(c) of the Act may not be imposed on him in respect of the disallowance of Rs. 7,52,963/- made in his hands in context of the bogus purchases booked by him in his books of account. The assessee in his reply tried to persuade the A.O that no such penalty under Sec. 271(1)(c) was liable to be imposed in his hands on the ground viz. (i) that the addition on account of bogus purchases was made on the basis of a statement of a third party; (ii) that the aforesaid addition was in itself backed by a process of estimation; (iii) that mere addition to the income would not conclusively lead to concealment of income by the assessee; and (iv) that necessary documentary evidence substantiating the purchase and sale of the goods under consideration placed on....
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....chases from the aforementioned parties had remained unproved. It was submitted by the ld. A.R that though the assessee had been made to suffer an addition/disallowance for the reason that the purchase transactions under consideration could not be proved by him to the hilt to the satisfaction of the A.O, however, as the authenticity of the claim of the assessee and the evidence led by him to substantiate the veracity of the purchase transactions had not been disproved by the revenue, hence no penalty under Sec. 271(1)(c) could have validly been imposed on him. It was further averred by the ld. A.R that as disallowance of 12.5% of the aggregate value of the purchases under consideration made by the A.O was only backed by a process of estimation, thus on the said count also no penalty under Sec. 271(1)(c) was liable to be imposed on him. The ld. A.R in order to fortify his claim that no penalty was called for in the hands of the assessee, relied on the order of a coordinate bench of the Tribunal, viz. ITAT Mumbai "H" bench, Mumbai, in the case of Shri Deepak Gogari Vs. ITO, Mumbai, (ITA No. 1396/Mum/2017, dated 23.11.2017). It was submitted by the ld. A.R that in the aforesaid case in....
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....alone basis for imposing of penalty under Sec. 271(1)(c). We find that the A.O observing that the assessee had failed to prove that he had purchased the goods under consideration from the aforementioned parties, had thus inferred that the same were purchased by him from the open/grey market and disallowed 12.5% of the value of such purchases, for the reason that the assessee by booking the purchases on the basis of fictitious bills obtained from the aforementioned parties, would have by so doing inflated the purchases. We are of the considered view that admittedly the assessee had suffered addition/disallowance in respect of the aforementioned purchase transactions, which in absence of clinching evidence as called for by the A.O had led to drawing of adverse inferences as regards the authenticity of such transactions. We are of the considered view that as the claim of the assessee of having made the purchases from the aforementioned parties could not be proved by him to the hilt, thus the same had remained unproved on his part. We are of a strong conviction that as the failure on the part of the assessee to substantiate the veracity of the purchase transactions under consideration ....