TMI Blog2017 (8) TMI 1124X X X X Extracts X X X X X X X X Extracts X X X X ..... Act ), dated 12.11.2014. The assessee assailing the order of the CIT(A) had raised the following grounds of appeal before us:- 1. In the facts and the circumstances of the case and in law, the learned A.O. erred in reopening the assessment u/s 148 merely on the basis of change of opinion and borrowed satisfaction, presumption and surmises and after a gap of 4 years and the Commissioner of Income Tax(A) dismissed the said ground raised by the Appellant. 2. In the facts and the circumstances of the case and in law, the learned A.O. erred in disallowing ₹ 2647645 / - out of total purchases of Rs . 2,11,81,156/- by way of alleged bogus purchases only on the basis of the information on the website www.mahavat.gov. in about 7 suspicious dealers whose copy of statement recorded were not furnished to the appellant and the Commissioner of Income Tax(A) erred in confirming ₹ 10,59,058/- out of the same, being estimated prof it at 5% of total purchases calculated on an ad hoc basis and even though the Appellant's books were not rejected. 3. The Assessing Officer wrongly charged interest u/s 234 and initiated penal ty u/s 271(1)(c). [B] Relief Prayed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d parties and in support thereof placed on record the ledger copies of the purchases, which therein revealed that the payment of the purchase consideration to the said respective parties had been made through cheques. The A.O called upon the assessee to produce the respective parties for examination, as well as place on record documentary evidence in order to substantiate the genuineness and veracity of the purchase transactions under consideration. The assessee however neither produced the respective parties for examination before the A.O, nor placed on record any supporting documents, viz. delivery challans, lorry receipts, transportation details etc., which could irrebutably evidence the genuineness of the purchase transactions as were claimed by the assessee to have been made from the aforementioned parties. The A.O taking note of the fact that the assessee except for placing on record copies of the ledger accounts and stressing on the fact that the payments to the aforementioned parties were made vide cheques, had however failed to lead any evidence which could prove the veracity of the purchase transactions was thus dissuaded to subscribe to the claim of the assessee that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sheth (2013) 356 ITR 451 and CIT Vs. M/s. Bholanath Poly Fab P. Ltd. (2013) 355 ITR 290, made an addition @ 12.5% of the aggregate value of the purchases of ₹ 2,11,81,156/- claimed by the assessee to have been from the aforementioned parties, therein leading to a consequential addition of ₹ 26,47,645/- , by observing as under:- a. That the physical delivery of the goods were obtained from the party hosed in grey market and to give it colour of being a genuine purchase, the bogus bill/accommodation bill was obtained from the supplier who declared himself as Hawala Dealer under MVAT Act, 2002. b. Though the purchases alleged as genuine and shown to have been made by making payment thereof by an account payee cheques, the cheques have been deposited in bank accounts ostensibly in the name of the apparent sellers. c. There is information available in public domain from which, the assessee was well aware that he was entering into colorable transactions with the alleged suppliers, as there alleged suppliers were indulging in such transactions right from their inception. d. The assessee could not produce any delivery challan to prove that the delivery o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to be made @ 5% of the bogus purchases. The CIT(A) thus on the basis of his aforesaid observations restricted the addition in the hands of the assessee at ₹ 10,59,058/. 6. The assessee being aggrieved with the order of the CIT(A) had carried the matter in appeal before us. That during the course of hearing of the appeal it was submitted by the ld. authorised representative (for short A.R ) for the assessee that the assessee firm which was engaged in the business of trading in pipes, hardware and engineering goods, had made genuine purchase from the aforementioned parties. The ld. A.R submitted that the genuineness of the aforesaid purchase transactions in itself stood evidenced from the fact that the payments towards the purchase consideration had been made to the respective parties vide cheques. It was further submitted by the ld. A.R. that as it was not the case of the department that the purchase consideration paid to the aforementioned parties had found its way back to the pocket of the assessee, therefore, there was no reason for drawing of adverse inferences as regards the genuineness of the purchase transactions. The ld. A.R. relying on the order of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in sustained the addition to the extent of ₹ 10,59,058/-. It was submitted by the ld. D.R that the appeal of the assessee being devoid of any merit was thus liable to be dismissed. 7. We have heard the authorized Representatives for both the parties, perused the orders of the lower authorities and the material produced before us. We have given a thoughtful consideration to the facts of the case and are of the considered view that it could safely be concluded that the assessee who had carried out purchase of goods from the open/grey market, had thereafter merely obtained the bills from the aforementioned parties. We find that the aforementioned parties had conceded before the Sales tax authorities that they were involved in the business of providing accommodation entries, and were not carrying out any genuine purchase/sale transactions. We further find that the A.O after thoroughly perusing the records had fairly concluded that the assessee after carrying out purchases of the aforesaid goods from the open/grey market, had thereafter in order to facilitate routing of the said purchase transactions through its books of accounts obtained bogus bills from the aforementioned p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uishable on facts. That unlike the facts involved in the case before the Hon ble High Court, in the case of the present assessee the A.O had rejected the books of accounts of the assessee. Still further, unlike the case of the present assessee, in the case before the Hon ble High Court, the confirmation letters of the suppliers and the copies of invoices for purchases were placed on record. We are of the considered view that as the assessee before us had miserably failed to substantiate the genuineness of the purchase transactions, therefore reliance placed by the ld. A.R on the judgment of the Hon ble High Court, which as observed by us is distinguishable on facts, would not come to the rescue of the assessee. That the reliance placed by the ld. A.R on the order passed by the Income Tax Appellate Tribunal, B bench, Mumbai passed in the case of ACIT-25(2), Mumbai Vs. Shri Mahesh K. Shah (ITA No. 5194/Mum/2014, dated 31.01.2017) is also found to be distinguishable on facts, as we find that unlike the case of the present assessee, in the said case addition was made u/s. 69C of the Act . We thus in the totality of the facts involved in the case of the present assessee are thus of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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