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2019 (10) TMI 127 - AT - Income TaxReopening of assessment - Bogus purchases - AO got information from Sales Tax Department that the concerned assessees received fake purchase bills from hawala dealers - HELD THAT:- AOs received information from the Sales Tax Department about the details of accommodation entry providers and the assesses had also recorded purchases from such hawala entry providers. There was a close nexus between the report of the Sales tax Department and the formation of belief by the Assessing Officer about the escapement of income of the assessee for the year(s) under consideration. Such information was specific, not general or vague. Thus, it is abundantly clear that receipt of such an information was sufficient enough for the Assessing Officer to initiate the reassessment. In our considered opinion, no exception can be taken to the view canvassed by the AO(s) in initiating the reassessment on this score. The ground(s) taken by the assessee in challenging the initiation of reassessment proceedings in general way are thus dismissed. Bogus purchase bills received by the assessee(s) as accommodation entries from hawala dealers. It is seen that the issue of bogus purchases has recently come up for consideration before the Hon’ble Bombay High Court in Pr.CIT Vs. Mohommad Haji Adam & Co [2019 (2) TMI 1632 - BOMBAY HIGH COURT] and others, the Hon’ble jurisdictional High Court has held that no ad hoc addition for bogus purchases should be made. It laid down that the addition should be made to the extent of difference between the gross profit rate on genuine purchases and gross profit rate on hawala purchases. Such case specific details are not readily available with the respective ld. ARs or the ld. DRs for facilitating the calculation of gross profit rates of genuine and hawala purchases. Under these circumstances, we set-aside the impugned orders and remit the matter to the file of the respective AOs for reconsideration. Going by the ratio laid down in the case of M/s. Chhabi Electricals Pvt. Ltd. and others [2017 (6) TMI 514 - ITAT PUNE] which both the sides agree to be applied for the instant case, we hold that the addition should be sustained on the amount of hawala purchases @10% plus the normal GP rate shown by the assessee for the year under consideration. We, therefore, set aside the impugned order and remit the matter to the file of AO for recomputing the amount of addition accordingly.
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