TaxTMI 
TaxTMI 
2025 (10) TMI 463
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.... declaring total income of Rs. 9,00,060/- was filed on 29.09.2011. Subsequently, AO has received information from the DGIT (Inv.) on the basis of information received from the Sale Tax Department that assessee had obtained accommodation entries of purchases from the following two parties to the amount of Rs. 27,38,565/-: Sr. No. Name of the party Amount 1. Reliable Metal (India) 9,53,197 2. Samco Steel & Alloys 17,85,368 Total 27,38,565 3. During the course of assessment the assessee has not made compliance to the notices u/s 142(1) of the Act issued by the AO. Thereafter, the AO after referring the information received from the Sale Tax Department treated the 100% purchases made from the above ....
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.... income. Thereafter, notice u/s 142(1) dated 18.05.2016 was issued and served by affixture. However, the assessee neither attended nor filed return of income. 5.1. As per the information received from Sales tax Department, the assessee had shown purchases of Rs. 27,38,565/- from the above - mentioned parties during the financial year under consideration. During the course of investigation, the sales tax department found that the said concern were not doing any genuine business of sales/purchases and merely indulged in providing accommodation entries/bills. To verify the genuineness of purchases made by the assessee, notice u/s 133(6) was issued to the above- mentioned parties but could not be served. The assessee failed to substant....
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....ice issued under sub-section (1) of section 142 or fails to comply with a direction issued under subsection (2A) of that section, or (c) having made a return, fails to comply with all the terms of a notice issued under sub-section (2) of section 143, The Assessing Officer, after taking into account all relevant material in his possession and giving reasonable opportunities to the assessee has completed the assessment of the total income or loss to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment: Provided that such opportunity shall be given by the Assessing Officer by serving a notice calling upon the assessee to show cause, on a date and time to be specified ....
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....ted with." In view of the above facts, the AO was justified in invoking the provisions of section 144 of the Act 1961. 5.4. Addition of Rs. 27,38,565/- on account of bogus purchases:-- After going through the facts of the case and the findings by the AO, it is gathered that during the year under consideration, the appellant was involved in taking entries of bogus purchases aggregating to Rs. 27,38,565/- from different parties as indicated by the AO in the body of the assessment order. During the course of investigation, the sales tax department has found that the said concerns were not doing any genuine business of sales/purchases and merely indulged in providing accommodation entries/bills. Despite affording number of opp....
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....y its contention that only the profit element should be considered for making addition by the AO when the AO has not doubted the corresponding sales made by the appellant. The AO in the instant case made addition by treating the entire purchases as bogus. Keeping in view the facts and circumstances of the case, it will be fair to apply GP rate of 15% on the impugned purchases held to be bogus by the AO. The addition will work out to be Rs. 4,10,785/-. Accordingly, the ground of appeal is allowed partially. 6. In the result, the appeal is allowed partially." 6. We have perused the copy of paper book filed by the assessee wherein in the submission made before the Ld. CIT(A) on 06.06.2024 the assessee has submitted that during the ....