TMI Blog2018 (4) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... s not required to be proved to the guilt. Uphold the order of the Ld. CIT(A) on the issue of reopening. 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 - purchase bills from these non-existent the/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. The overall consideration of facts and circumstances and following the decision of Hon’ble Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challans of the purchases made from five parties. To ascertain the genuineness of purchases shown in the accounts, notice u/s 133(6) of the Act was issued to five parties by the Assessing Officer which was returned unserved by the postal authorities. The Assessing Officer observed that in the absence of any details from the above parties the genuineness of the transaction could not be verified. Further as per the information received from Sales Tax Authorities the above mentioned parties were Hawala Dealers, they are dealing only in paper entries. The Assessing Officer further gave a finding that the assessee could not file the vital documents such as delivery challans, transport receipts, octroi receipt for payment of Octroi duty, receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ashtra Sales Tax Authority. Information was received that the assessee was beneficiary of hawala accommodation entries from entry providers by way of bogus purchase. The accommodation entry provider has deposed and admitted before the Maharashtra Sales Tax Authority vide statement/ affidavit that they were engaged in providing bogus accommodation entries wherein bogus sale bills were issued without delivery of goods, in consideration for commission. These, accommodation entry providers, on receipt of cheques from parties against bogus bills for sale of material, later on withdrew cash from their bank accounts, which was returned to beneficiaries of bogus bills after deduction of their agreed commission. The Assessee was stated to be one of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 reason to believe would mean cause or justification. If the AO has cause or justification to know or suppose (hat income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the AO should have finally ascertained the fact by legal statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. As observed by the Supreme Court in Central Provinces Managnese Ore Co, ltd. v. ITO(1991) 191 ITR 662, for initiation of action under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modation entry provider/bogus suppliers were being used by certain parties to obtained bogus bills, assessee was found to have taken accommodation entry/bogus purchase bills during the concerned assessment year from different parties. Based upon this information assessment was reopened. The credibility of information relating to reopening has been confirmed by the learned CIT(A) and by ITAT as above. Furthermore it is noted that in such factual scenario Assessing Officer has made the necessary enquiry. The issue of notice to all the parties have returned unserved. Assessee has not been able to provide any confirmation from any of the party. Assessee has also not been able to produce any of the parties. The necessary evidence for transportat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition is totally unsustainable in light of above apex court decisions. 13. In these circumstances learned departmental representative has referred to Hon ble Gujarat High Court decision in the case of Apex Appeal No. 240 of 2003 in the case of N K Industries vs Dy CIT , order dated 20.06.2016, wherein hundred percent of the bogus purchases was held to be added in the hands of the assessee and tribunals restriction of the addition to 25% of the bogus purchases was set aside. It was expounded that when purchase bills have been found to be bogus 100% disallowance was required. The special leave petition against this order along with others has been dismissed by the Hon ble Apex Court vide order dated 16.1.2017. 14. I further note that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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