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2019 (6) TMI 394

..... e and he should have in first place furnished cogent evidences to prove the genuineness of the purchases and suppliers. No confirmations were filed by the assessee from suppliers. We also observe that at the time of assessment proceedings, the AO has also not exercised his power to summon the Vendors u/s. 133(6). If the assessee had failed to produce Vendors, the AO could have summoned them. There was lack of effort from both the sides to bring the true colour of purchase transaction to fore. The CIT (A) after considering entire facts came to the conclusion that it is a case of purchases from gray market and thereafter, bills have been procured from hawala operators. In the given facts, the entire purchases cannot be considered as bogus. At the same time, the assessee cannot be allowed to go scot free for not proving the genuineness of the purchases. The Co-ordinate Bench of the Tribunal in the case of M/s. Chhabi Electricals Pvt. Ltd. Vs. DCIT [2017 (6) TMI 514 - ITAT PUNE] has held that in the cases of purchases from suspicious dealers, addition of 10% of the bogus purchases over and above the GP declared by the assessee for the year should be made. In the instant case, the CIT ( .....

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..... h u/s.131 of the Act, wherein he admitted that in absence of supporting bills, octroi receipts and transport receipts etc., genuineness of the purchases made from eight parties aggregating to ₹ 85,98,876/- could not be proved. The Assessing Officer made addition of entire ₹ 85,98,876/- on account of bogus purchases. Further, the Assessing Officer initiated penalty proceedings u/s.271(1)(c) of the Act for furnishing inaccurate particulars of income . 3. Aggrieved against the assessment order dated 30.01.2015 passed u/s.143(3) of the Act, the assessee filed appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax(Appeals) upheld the purchase of goods from bogus parties. However, the Commissioner of Income Tax (Appeals) restricted the addition to 10% of the alleged bogus purchases i.e.8,59,887/- and deleted the remaining addition. Against the findings of the Commissioner of Income Tax (Appeals), the Revenue is in appeal before the Tribunal by raising following grounds: 1. Whether on the facts and in the circumstances of the case, the Ld. CIT(A)-2, Nashik was justified in deleting the addition of ₹ 77,38,989/- made by the Assessing Office .....

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..... ition made on account of bogus purchases to 10% of the bogus purchases. It is an undisputed fact that Revenue has accepted the total turnover of the assessee. The total turnover of the assessee during impugned period is ₹ 1,15,71,310/-, whereas, the alleged bogus purchases disallowed by the Assessing Officer are ₹ 85,98,876/-. Without purchases, there cannot be sales. The books of account of the assessee have also not been rejected by the Assessing Officer before making addition of the entire alleged bogus purchases. Undoubtedly, the primary onus to prove genuineness of purchase transactions is on the assessee and he should have in first place furnished cogent evidences to prove the genuineness of the purchases and suppliers. No confirmations were filed by the assessee from suppliers. We also observe that at the time of assessment proceedings, the Assessing Officer has also not exercised his power to summon the Vendors u/s. 133(6) of the Act. If the assessee had failed to produce Vendors, the Assessing Officer could have summoned them. Thus, there was lack of effort from both the sides to bring the true colour of purchase transaction to fore. The Commissioner of Income .....

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..... iated for furnishing inaccurate particulars of income , whereas, at the time of levy of penalty, the Assessing Officer levied penalty for concealment of income . Furnishing of inaccurate particulars of income and concealment of income are two different expressions having different connotation. Penalty initiated under one limb of section 271(1)(c) of the Act and levied on another limb would make the penalty order bad in law. In support of his submissions, the ld. AR placed reliance on the decision of Hon'ble Bombay High Court in the case of CIT Vs. Samson Perinchery reported as 392 ITR 4 (Bom.) 11. On the other hand, the ld. DR vehemently defended the order of Assessing Officer dated 22.07.2015 in levying penalty u/s. 271(1)(c) of the Act and prayed for reversing the impugned order. 12. Both sides heard. Orders of the Authorities below perused. A perusal of assessment order shows that penalty proceedings u/s.271(1)(c) of the Act were initiated for furnishing of inaccurate particulars of income . The relevant extract of the assessment order whereby penalty proceedings were initiated reads as under: Further, for furnishing of inaccurate particulars of income, penalty proceeding u/ .....

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