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TaxTMI 
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2025 (12) TMI 1503
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....ce of returned income 43,41,010/-. 3. The assessee has made purchases to the tune of Rs. 1,58,73,026/- from M/s Gayatri Maa Enterprises which were treated as bogus purchases by the Ld. AO without giving cross examination opportunity to the assessee. 4. That the action of Ld. AO in disallowing the entire purchase thereby making an addition to the tune of Rs. 1,58,73,026/- is totally unjustified as these purchases were duly accepted by the Ld. AO while passing the order u/s 143(3) of the Income Tax Act and is liable to be deleted without giving an opportunity for cross-examination. 5. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. 3. Learned counsel submits at the outset that the assessee does not wish to press for his first, second and fifth substantive grounds. Rejected accordingly. 4. Next comes the sole substantive issue of correctness of both the learned lower authorities' action disallowing the assessee's alleged bogus purchases of Rs. 1,58,73,026/- sourced from M/s. Gayatri Maa Enterprises in assessment order d....
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.... of the bills have the details of the Transportation (i.e. truck No. etc. is blank) 4. Prima Facie, it appears that these have been prepared on the same day. 5. M/s Gayatri Maa Enterprises is the proprietary concerns of Shri Ashok Kumar Gupta; in a statement recorded on oath u/s 131 (1A) of the Income Tax Act on 13.12.2018, Sh. Ashok Kumar Gupta admitted that M/s Gayatri Maa Enterprises is engaged in the business of providing bogus entries. 6. Sh. Ashok Kumar Gupta clearly stated that no actual physical sales and purchases took place with its concern. 7. Assessee was provided the opportunity to prove that transaction with M/s Gayatri Maa Enterprises as genuine but the assessee did not respond to the notices issued and did not gave his submission. 8. The Assessing Officer made great efforts to trace the assessee's whereabouts by all possible means, but the assessee chose to avoid the enquiries. 5.6 It is noted from the assessment order that the appellant had received a bogus purchase of Rs. 1,58,73,026/- in the shape of accommodation entry from the entity during the year under consideration. The concerned person has already s....
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....rty. In view of the above, the factual inference was made that such purchase claimed to have been made by the assessee from the above party is bogus. This is a glaring statement that gives sufficient reasons to disbelieve the book results declared by the assessee. During the appellate proceedings, appellant submitted ledger account and bills to substantiate his claim for genuine purchase. However, assessee could not produce the party along with documentary evidence and books of account as asked for verification. 5.9 From the above discussion, it is noted that nothing has been brought on record to show that the above party actually provided goods to the appellant. In the view of the above facts, it is noted that creditworthiness and genuineness of the above entities is not established. 5.10 Merely showing the transactions through the banking channel by account payee cheques is not enough to prove the genuineness and creditworthiness of the purchases. So the argument of assessee that the conclusion that the alleged supplier did not supply any physical goods is pre-mature, is not correct. If all the evidence points to the fact that no actual goods were supplied by th....
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....n ITA No. 4779/Del/2013 dated 08.03.2019. The case laws relied by the appellant are not found applicable to the facts of the present case. 5.12 After going through the ratio of decisions as referred above, it is noted that appellant has failed to prove the creditworthiness and genuineness of the transaction in respect of the purchase. Nothing has been brought on record to justify this transaction. 5.13 Reliance is put on the decision of the Hon'ble Apex Court in the case of A. Govindarajulu Mudaliar v. CIT (1958) 34 ITR 807, Commissioner of Income Tax V. Independent Media (P) Ltd. 210 ΤΑΧΜΑΝΝ 14(Delhi)(2012.) 5.14 The Income Tax Department has conducted detailed enquiries, made analysis of the documents and made a list of beneficiaries. The reports prepared details of complete modus operandi, list of conduits entities, list of TIN number, etc., in the name of conduits. The appellant is one of such beneficiaries through such conduit. It has been held by hon'ble Bombay High Court in the case of GTC Industries Ltd. v. ACIT ITAT Mumbai 1995 (1998) 65 ITD 380 (Bom) where statement of witness were only secondary and subordin....
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....ted to cross-examination. The procedure for assessment is indicated in section 23 (3) of the Act. The Income-tax Officer is not a court. Having regard to the nature of the proceedings, he occupies the position of a quasi judicial tribunal. He is not bound by the rules of evidence in the Indian Evidence Act. The limit of the enquiry and the kind of materials or evidence which he can act upon cannot be specified and the statute has not attempted it. Wide though his powers be, he must act in consonance with rules of natural justice. One such rule is that he shall not use any material against the assessee without giving him an opportunity to meet it Dhakeswari Cotton Mills Ltd., v. Commissioner of Income-tax. The source of information for the material against the assessee need not be divulged. In fairness to the assessee he should be told what is against him, so that he may, if he can, displace it. It is no denial of natural justice if the Income-tax Officer refuses to produce an informant for being cross-examined by the assessee. If any witness is examined in the presence of the assessee, he must of course have a right of cross-examination. Several decisions have considered the scope ....
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....purchases, thereby decreasing the profit. 5.20 In the case of Shoreline Hotel (P) Ltd. vs. CIT, Central-1, the Jurisdictional High Court of Bombay vide its order dated 11.09.2018 dealt with a similar issue. In this case, information was also received from the Sales Tax Department in relation to certain parties who were engaged in providing bogus purchase bills, and the assessee was also one of the beneficiaries of hawala bilis. The AO held 15% of such purchases to be assessed as the assessee's income. The Commissioner invoked section 263 on the ground that since assessee had not disputed that parties from whom purchases were made were those whose names appeared on website of Sales Tax Department accommodation entry providers, entire purchases was to be treated as non-genuine - It was noted that assessee was not able to produce any material purchased by it nor it could ensure presence of supplier from whom it purchased goods. There was no reason for the Assessing Officer to accommodate the assessee in the manner done. The Tribunal upheld this view of the Commissioner. The Tribunal also referred to all the relevant judicial decisions in the field. It also referred to the....