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2017 (11) TMI 318

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..... unserved. Assessee has not been able to produce any of the parties. The assessing officer has noted that there is no cogent evidence of the provision of goods. 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 further strange that assessee wants the Revenue to produce assessee’s own venders, whom the assessee could not produce. The purchase bills from these non-existent / bogus parties cannot be taken as cogent evidence of purchases. In light of the overwhelming evidence the revenue authorities cannot put upon blinkers and accept these purchases as genuine. - Decided against assessee. - I.T.A. No.3383/Mum/2017 - - - Dated:- 1-11-2017 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER For The Appellant : None For The Respondent : Ms. Hemalatha ORDER Per Shamim Yahya, A. M.: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-10, Mumbai ( CIT(A) for short) dated 20.01.2017 and pertains to the assessment year (A.Y.) 2011-12. 2. The grounds of appeal read as under: 1. On the facts and in the c .....

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..... 10 UJWAL ENTERPRISES AIEPJ7045A 250,349 During the course of extensive investigations carried out by the Sales Tax Authorities, it was revealed that certain traders have only issued invoices without the sale of goods for certain commission. To this effect, they have given sworn affidavits to the Sales Tax Authorities. Such an information was passed on to the Assessing Officer through the DGIT(Inv), Mumbai. To verify the genuineness of purchases, notices u/s 133(6) were sent to the above parties who claimed to have supplied goods to the assessee company. All the notices have been returned un-served by the postal authorities. The assessee was asked to produce the parties for verification for which it has expressed its inability to produce them before the Assessing Officer. Therefore, the Assessing Officer concluded that the assessee has obtained bogus purchase bills to reduce profits by inflating purchases. By following the decision of Hon'ble High Court of Gujrat in the case of Simit P Seth , 2013 (356 ITR 451), the Assessing Officer has disallowed 12.5% of bogus purchase of ₹ 2,31,56,224/-which works out to .....

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..... ogus purchase bills without delivery of any material. There is a list of such parties wherein the assessee is stated to be beneficiary of bogus purchase bills. 8. From the above, I find that tangible and cogent incriminating material were received by the AO which clearly showed 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 assess or reassess income chargeable to lax if he has reason to believe that income for any assessment year has escaped assessment. The word reason in the phrase r .....

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..... tion 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 provider of these bills are bogus and non-existent. 11. The Sales Tax Department in its enquiry have found that parties to be providing bogus accommodation entries. The Assessing Officer also issued notices to these parties at the addresses provided by the assessee. All these notices have returned unserved. Assessee has not been able to produce any of the parties. The assessing officer has noted that there is no cogent evidence of the provision of goods. 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 further strange that assessee wants the Revenue to produce assessee s own venders, whom the assessee could not produce. The purchase bills from these non-existent / bogus parties cannot be taken as cogent evi .....

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