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2020 (1) TMI 1442 - ITAT DELHIValidity of reopening u/s.147 - Addition of bogus bill in the name of M/s. Vee Gee Industrial Enterprises - information was received from the office of ADIT (Inv.)-II, Faridabad along with bank statement of the assessee wherein assessee-company had issued a cheque in favour of M/s. Vee Gee Industrial Enterprises as mainly engaged in large value credits from the business and individuals in other banks followed by immediate cash withdrawal - HELD THAT:- From the perusal of the reasons recorded, we find that the Investigation Wing during the course of inquiry has found that assessee has issued a cheque in favour of M/s. Vee Gee Industrial Enterprises and said entity was not found to carry out any business nor any statutory payment like VAT/Excise Duty, etc. was paid which was statutory requirement for a person or entity carrying out such a trade - there is no freight payment also. Since in the inquiry, specific cheque number and account was found which is tallying with the assessee’s bank account then there is a prima facie reason to believe that transaction is not genuine and such a material is sufficient to clothe the Assessing Officer to acquire jurisdiction to reopen the assessment. AO at the stage of recording the reasons and issuance of notice need not need to establish fact. Thus, the finding of the Ld. CIT (A) upholding the validity of reopening u/s.147 is upheld. Bogus purchases - AO had issued summons u/s.131 to the proprietor of the said entity from whom assessee has made purchases, but that remained uncomplied with nor assessee could produce the party. However, on the other hand, the sources of purchase have gone from the books of the assessee and there is a corresponding sale. In such a situation at the most even if assessee has made bogus purchases through cheque from the sources disclosed in the books of account and thereafter has taken accommodation entry and has received the cash back, then the same goods must have purchased from the grey market in cash, Since sales and purchase quantity wise details in the trading account has not been disturbed then at the most it could be a case of suppression of gross profit. Under these circumstances, we hold that addition on account of enhancement GP on the said purchase would be reasonable. Hence, we direct the Assessing Officer to apply 8% GP on the alleged bogus purchases - Appeal of the assessee is partly allowed.
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