TMI Blog2018 (12) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 100% disallowance for bogus purchase is not disallowable. Hence, we confirm the order of ld. CIT(A) sustaining disallowance of 12.5% of bogus purchase. - I.T.A. No. 1117/Mum/2018 - - - Dated:- 4-10-2018 - Shri Shamim Yahya, AM And Shri Pawan Singh, JM For the Appellant : None For the Respondent : Shri S. K. Bepari O R D E R PER SHAMIM YAHYA, A. M.: This appeal by the assessee is directed against the order by the learned Commissioner of Income Tax (Appeals)-25, Mumbai ( ld.CIT(A) for short) dated 22.12.2017 and pertains to the assessment year (A.Y.) 2009-10. 2. The issue raised is that the ld.CIT(A) erred in sustaining disallowance of 12.5% of bogus purchase amounting to ₹ 25,34,888/-. 3. In this case, the Assessing Officer (A.O. for short) had received information from the Investigation Wing of the department that the assessee had taken accommodation bills for purchases from the parties declared as hawala operators by Maharashtra Sales Tax Department. During the course of re-assessment proceedings, it was seen by the AO that during the year under consideration, the assessee had claimed to have made total purchases of ₹ 5,10,93,918/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee during the course of assessment proceedings and the assessee was asked to produce the party, broker or transporter and also show cause as to why the purchases made from the aforesaid parties should not be disallowed. In response to the AO's above query, the AR of the assessee made written submissions wherein n was submitted that the purchases shown by the assessee from the said parties are genuine purchases and payments to these parties were also made through account payee cheque. Further, the assessee also expressed his inability to produce the parties. Further, the assessee also failed to furnish evidences, such as, delivery challans, transportation details etc, to substantiate his claim of purchases from the aforesaid party. The assessee could only furnish copies of bank statements claiming that the purchases made were genuine as the payments have been made through banking channels. 6. The AO did not accept assessee's contention that the payment was made through banking channel and therefore, the purchases were genuine. Since, the assessee could not produce the above mentioned parties before the AO it could not provide the evidences of the purchase l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aged 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 the beneficiaries of these bogus entries of sale of material from hawala entry operators in favour of the assessee wherein the assessee made alleged bogus purchases through these bogus bills issued by hawala entry providers in favour of the assessee. These dealers were surveyed by the Sales Tax Investigation Department whereby the directors of these dealers have admitted in a deposition vide statements/affidavit made before the Sales Tax Department that they were involved in. issuing bogus 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. 13. From the above, we find that tangible and cogent incriminating material were received by the AO which cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he validity of reopening in this case. 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. 15. In such factual scenario, the 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. Necessary evidence relating to transportation of the goods was also not on record. In this factual scenario, it is amply clear that the assessee has obtained bogus purchase bills. Mere preparation of documents for purchases cannot controvert overwhelming evidence that the provider of these bills is bogus and non-existent. 16. The Sales Tax Department in its enquiry has found the 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. Neither the assessee has been able to produce any confirmation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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