TMI Blog2017 (2) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... -12-2016 - Shri C. N. Prasad, JM And Shri Manoj Kumar Aggarwal, AM Appellants by : Shri Rajiv Khandelwal Shri Nagin Parikh Revenue by : Smt. RM Madhavi ORDER Per C. N. Prasad ( J. M. ) All these four appeals are filed by the Assessee against the common order of the CIT (Appeals)-I, Thane dated 25.08.2016 for the assessment years 2009-10 to 2012-13 arising out of the assessment orders passed under section 143(3) read with 147 of the Act. As the facts and issues are identical all the appeals are heard together and disposed of by this common order for the sake of convenience. 2.1 Assessee challenged the order of the Ld. CIT (Appeals) in sustaining the reopening of assessment under Section 147 of the Act in all these appeals. The Ld. Counsel for the Assessee submits, the reopening of assessments in all these cases is bad in law. The DR supports the orders of the CIT (Appeals) in sustaining the reopening of assessment. 2.2 On hearing both the parties, we are of the considered view that the assessments were reopened based on the information received from the Sales Tax department and therefore, we are of the view that there is tangible material came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Amit Trading Co. 3,78,831 7. M/s Gopikrishna Trading Co. 5,91,470 8. M/s J.K. Agency 2,11,314 18,14,329 7,85,287 9. M/s Mayur Trading Co. 2,75,174 1,23,750 10. M/s G.M. International 2,17,451 11. M/s Rummit Enterprises 5,98,154 12. M/s N.K. Trading Co. 6,00,402 13. M/s Real Traders 1,14,261 14. M/s Bhakti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons agreeing with the view of the Assessing officer that the Assessee has failed to produce the parties, the notices issued to the parties were returned unserved or they were not available at the given addresses. He further observed that the parties have deposed before the Sales Tax authorities that they are providing only accommodation entries and after receiving payments from the customers through banking channels, they have returned the monies to the customers in cash after retaining a small portion towards commission. Therefore, he concluded that the purchases are not genuine and the Assessing Officer is justified in treating them as bogus purchases. 6. The Ld. Counsel for the Assessee before us submits that the information said to have been received from Sales Tax department by the Assessing Officer is not given to the Assessee. The Assessing Officer has not provided inspection report to the Assessee and it was kepy only on record. The information about notices returned unserved was not intimated to the Assessee. The Counsel for the Assessee submits that the bills were issued in the financial year 2008-09 to 2011-12 and the inspection said to have been made in 2014 and noth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. DCIT Vs.Rajeev G Kalathil 6727/M/2012 8. ITO Vs Paresh Arvind Gandhi 5706/M/2013 9. ITO Vs. Sanjay V Dhruv 5089/M/2014 8. The Ld. DR vehemently supported the orders of the lower authorities. The Ld. DR submits that inspite of the specific request made by the Assessing Officer to prove the genuineness of the transactions by producing the parties, the Assessee failed to produce the parties and submit proper evidences to establish the transactions of purchases as genuine. Therefore, the Assessing Officer was justified in treating the purchases made from the concerned parties as bogus purchases. 9. We have heard the rival submissions, perused the orders of the authorities below and the material available on record. It is very much apparent from the assessment order that the basis for treating the purchases made by the Assessee from certain parties as mentioned in the assessment orders is only the information obtained by the Assessing Officer from Sales Tax department. We find that this informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd. It is evident from the assessment order that on the basis of information obtained from the Sales Tax Department, Assessing Officer issued notices under section 133(6) to three parties out of which two notices were returned unserved by the postal authorities and in case of one of the parties through notice was served, there was no response . Therefore, he called upon the assessee to produce the concerned parties. As the assessee failed to produce the concerned parties, the Assessing Officer, therefore, primarily relying upon the information obtained from the Sales Tax Department, held the purchases to be bogus and made addition under section 69C of the Act. Though, it may be a fact that assessee was not able to produce the concerned parties before the Assessing Officer, for whatever may be the reason, fact remains during assessment proceedings itself the assessee had produced confirmed ledger copies of concerned parties, bank account statement, purchase bills, delivery challans, etc., to prove the genuineness of the purchases. It is also a fact on record that the Assessing Officer has not doubted the sales effected by the assessee. Thus, it is logical to conclude that wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DGIT (Inv.). It is a fact on record to ascertain the genuineness of purchases, the Assessing Officer summoned one of the directors of the assessee company and recorded a statement under section 131 of the Act on 28th January 2013. On a perusal of the said statement reproduced by the Assessing Officer in the assessment order reveals that in question no.21, the Assessing Officer specifically asked the assessee to explain the allegation of bogus purchases. In reply, it was submitted by the assessee as under: Q.21: As per the information received, it seems that the assessee company M/s. Sharad Constructions P. Ltd. has booked bogus purchases during the financial year 2009 2010 (i.e., A.Y. 210 11), please confirm whether it is true? Ans: Regarding alleged bogus bill in year 2009 10 (A.Y. 2010 11) in particular, last year we received notice show case notice from sales tax deptt. Informing us that 4 5 suppliers had not paid VAT collected from us and not knowing about this as suppliers already collected VAT from us, as a routine, we had taken set off of VAT where VAT was paid more than 4% i.e., 12.5%. We wonder, how these bills becomes bogus where no set off was take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced in earlier part of our order are bogus. In fact, in the assessment order, nowhere the Assessing Officer has discussed in detail the nature of information obtained from DGIT (Inv.) nor the specific adverse material on the basis of which the allegation of bogus purchases were made. Undisputedly, before the Assessing Officer, the assessee had produced its books of account, purchase bills, bank statements, etc. It is also not disputed that the payment made towards purchases are through account payee cheques and reflected not only in the books of account but in the bank account copies. It is settled position of law, entries made in the books of account in regular course ordinarily, shall be presumed to be correct unless there is strong evidence to prove the contrary. It is an admitted position that the Assessing Officer has not rejected the books of account of the assessee. This pre supposes that there is no discrepancy in the books of account of the assessee. That being the case, the purchases having been reflected in the books of account cannot be treated as bogus without any corroborative evidence to establish such fact. Moreover, the allegation of the assessee that the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e invoices, books of account, etc., to prove the genuineness of purchases. In addition, it is not disputed that the entire payments towards purchases have been made through account payee cheque. Before the first appellate authority, the assessee had produced copies of delivery challans and also confirmations from the concerned dealers to prove the purchases. Thus, these documentary evidences produced by the assessee demonstrate that to some extent the assessee did discharge its onus to prove the genuineness of the purchases. As opposed to this, the Assessing Officer except the report of the DGIT (Inv.) had not brought on record any other cogent / corroborating evidence to prove the purchases as bogus. Admittedly, the Assessing Officer has not made any independent enquiry by even issuing notices under section 133(6) to the so called bogus suppliers. That being the case, if the A.O. or the learned CIT(A) were not satisfied with the evidences produced by the assessee and still had doubt with regard to the genuineness of purchases it should have triggered a proper enquiry / investigation at their end to ascertain the genuineness of assessee s claim. Without making any enquiry / investi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port assessee s case that when payments are made through account payee cheque to suppliers and sales effected are not doubted, further, when books of account are not rejected purchases cannot be treated as bogus. The other decisions of the Tribunal relied upon by the learned Authorised Representative also express the view that merely on the basis of information obtained from the Sales Tax department, no addition can be made on account of bogus purchases. Therefore, on over all consideration of facts and material on record, we are of the opinion that the addition made on account of bogus purchases is legally unsustainable, hence, we delete the same. 12. In view of the above discussion, we hold that there is no material on record to conclusively prove that the purchases made by the Assessee are bogus purchases and nothing is brought on record to suggest that the information gathered by the Sales Tax department conclusively proves that the dealers are providing only the accommodation entries to the Assessee before us, thus we hold that addition made under Section 69C cannot be sustained. 13. However, at the same time, keeping in view the nature of business of the Assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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