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TMI Blog2017 (10) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... of this case. 3. In this case, the assessee is a Partnership Firm engaged in the business of manufacturing of ready-made garments. The assessee had filed its return of income for AY 2009-10 on 27/09/2009 declaring a total income of Rs. 21,17,592/-. The same was assessed under section 143(3) of the Act on 31/10/2011 at an income of Rs. 23,11,990/-. Subsequently, the Assessing Officer received information from the office of the DGIT(Inv) to the effect that the assessee has made bogus purchases and had taken accommodation bills of entry. The Assessing Officer reopened the assessment of the assessee after recording reasons. The assessee was found to have taken bills of purchase from the following hawala dealers: SL No. Name of Hawala Deale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. Against the above order, the assessee appealed before the learned CIT(A) who confirmed the action of the assessing officer. The ld. CIT(A) concluded as under: 7.2 The assessee has also claimed the impugned dealers was its genuine suppliers. The point to be noted is that the assessee declared to the Income Tax Department that its suppliers are genuine despite the assessee foregoing the set off of the VAT paid by it on the alleged purchases and despite the 'dealer' giving statements to the Sales Tax Authorities that they are not doing any genuine sales. The 'dealer' is the witnesses of the assessee through whom the assessee seeks to justify its books of account. When the assessee's witness does not seem to back the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied upon the enquiries conducted by the Sales Tax Department. It is it is seen that the AO has given the details of the enquiries conducted by the Sales Tax Department at para-4.l(iii) of the reassessment order and the inquiries as well as the documents submitted by the hawala dealers establish that the transactions of the assessee with the hawala dealers were not genuine. 7.4 It is seen that though the assessee claims that the hawala dealers were genuine sellers but it is a fact that the assessee is unable to produce the sellers for verification. The assessee has no other document or evidence to establish receipt of the material from the hawala dealers or the consumption of the same. While the assessee has claimed that the fire has destro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from any of the party. Assessee has also not been able to produce any of the parties. Necessary evidence relating to transportation of the goods was also not on record. In this factual scenario, it is amply clear that assessee has obtained bogus purchase bills. Mere preparation of documents for purchases cannot controvert overwhelming evidence that the providers of these bills are bogus and non-existent. 9. The Sales Tax Department in its enquiry has found the parties to be providing bogus accommodation entries. Assessee has not been able to produce any of the parties. Neither the assessee has been able to produce any confirmation from these parties. In such circumstances, there is no doubt that these parties are non-existent. I find it f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... npayment of tax and others at the expense of the exchequer. In such situation, in our considered opinion, on the facts and circumstances of the case, 12.5% disallowance out of the bogus purchases meets the end of justice. Accordingly, I direct that the assessee be restricted to 12.5% of the bogus purchases. 11. As regards the reopening of the assessee, on a careful consideration, I note that in this case information was received by the Assessing Officer from DGIT Investigation (Mumbai) there are some parties who are engaged in the hawala transactions and are also involved in issuing bogus purchase bills for sale of material without delivery of goods, which information was based on information received by Revenue from Maharashtra Sales Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the assessee was beneficiary of bogus purchase entries from bogus entry providers which formed the reason to believe by the AO that income has escaped assessment. The information so received by the AO has live link with reason to believe that income has escaped assessment. On these incriminating tangible material information, assessment was reopened. At this stage there has to be prima facie belief based on some tangible and material information about escapement of income and the same is not required to be proved to the guilt. In this regard, I refer to the decision of the Hon'ble Apex Court in the case of CIT(A) Vs. Rajesh Jhaveri Stock Brokers P. Ltd, 291 ITR 500:- "Section 147 authorises and permits the Assessing Officer to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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