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TMI Blog2018 (4) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... income at Rs. 8,60,290/-. The return was processed u/s 143(1) of the Act and order u/s 143(3) was passed on 11.12.2012 determining total income of Rs. 9,65,730/-. Subsequently, the case was reopened and accordingly notices u/s.143(2) and 142(1) were issued and duly served on the assessee company. The Assessing Officer completed the assessment u/s. 143(3) r.w.s. 147 of the Act on 19.03.2015 determining total income at Rs. 23,44,640/-. 4. During the course of reopened assessment proceedings the Assessing Officer observed that assessee has filed paper book showing the ledger account and copies of purchase bills, delivery challans of the purchases made from five parties. To ascertain the genuineness of purchases shown in the accounts, notice u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e sent has returned unserved. Accordingly, I proceeded to adjudicate this case by hearing the ld. Departmental Representative and perusing the material on record. 8. Upon careful consideration, 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 Authority. Information was received that the assessee was beneficiary of hawala accommodation entries from entry provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lieve 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 escape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fully justify the validity of reopening in this case. Further I find that the Ld. CIT(A) has carefully examined the issue and has properly appreciated the issue. Hence, I do not find any infirmity in the same. Accordingly, I uphold the order of the Ld. CIT(A) on the issue of reopening. Since, the issue has been decided on the basis of the Hon'ble Apex Court decision, the other case laws referred by assessee are not supporting the assessee's case. 11. As regards merits of addition, I find that credible and cogent information was received in this case by the assessing officer that certain accommodation entry provider/bogus suppliers were being used by certain parties to obtained bogus bills, assessee was found to have taken accommodation en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stent. 12. Hence 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. This proposition is duly supported by Hon'ble Apex Court decision in the case of Sumati Dayal 214 ITR 801 and Durga Prasad More 82 ITR 540. In the present case the assessee wants that the unassailable fact that the suppliers are non-existent and thus bogus should be ignored and only the documents being produced should be considered. This proposition is totally unsustainable in light of above apex court decisions. 13. In these circumstances learned departmental representative has referred to Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es are bound by the principle of law pronounced in the aforesaid three judgments. 15. Upon careful consideration I find that sales in these cases are not doubted. When sales are not doubted, 100% disallowance for bogus purchase is not sustainable as per the decision of the Hon'ble jurisdictional High Court in the case of Nikunj Eximp Enterprises (in writ petition no 2860, order dt. 18.6.2014). However, the facts of that case were different inasmuch as sales were to the Government department. However the facts and circumstances of the present case indicate that assessee has engaged into dealings in the grey market. Dealings in the grey market give the assessee various savings at the expense of the Exchequer. Hence, on the overall considera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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