HARAKCHAND K SHAH, MUMBAI V. ITO 30(1)(4), MUMBAI

ITA 7438/MUM/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0168 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 04-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 19-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V JANARDHANAN
• Assessee Lawyers: KHUSHAL SHAH
• Keywords: Bogus purchase; Rejection of books of accounts; Reasonable cause; Tangible material; Corroborative evidences; Accommodation entries; Reason to believe
• Section: 133(6); 147; 148

Judgement Text

, SMC , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.7438/MUM/2016 : ASST.YEAR 2009-2010 SHRI HARAKCHAND K SHAH 23 PARSURAMPURIYA ENCLAVES HAJI BAPU ROAD, MALAD (EAST) MUMBAI 400 097. PAN : AACPS7349J. / VS. THE INCOME TAX OFFICER WARD 30(1)(4) MUMBAI. ( / APPELLANT) ( / RESPONDENT) /APPELLANT BY : SHRI KHUSHAL SHAH /RESPONDENT BY : SHRI V.JANARDHANAN / DATE OF HEARING : 04.07.2017 / DATE OF PRONOUNCEMENT : 04.09.2017 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 27.04.2015 AND PERTAINS TO ASSESSMENT YEAR 2009-2010. 2. AT THE OUTSET IT IS NOTED THAT THERE IS A DELAY OF 29 DAYS IN FILING THE APPEAL. THE REASONABLE CAUSE FOR THE DELAY HAS BEEN CLAIMED TO BE THE MISTAKE OF TAX CONSULTANT. UPON HEARING BOTH THE COUNSEL I CONDONE THE DELAY. 3. THE GROUNDS OF APPEAL READ AS UNDER:- 1. THE LEARNED AO ERRED IN INITIATING REASSESSMENT PROCEEDING UNDER SECTION 147 WITHOUT HAVING ANY TANGIBLE MATERIAL TO JUSTIFY HIS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. ITA NO.7438/MUM/2016. SHRI HARAKCHAND K SHAH. 2 2. THE LEARNED AO ERRED IN REJECTING THE AUDITED BOOKS OF ACCOUNTS APPELLANT UNDER SECTION 145(3) OF THE INCOME TAX ACT. 3. THE LEARNED AO ERRED IN TAKING AN ARBITRARY 12.50% RATE OF GROSS PROFIT WITHOUT POINTING OUT ANY BASIS FOR THE SAME AND WITHOUT POINTING OUT ANY SPECIFIC DEFECT IN THE AUDITED BOOKS OF ACCOUNTS OF APPELLANT. 4. THE LEARNED AO ERRED IN MAKING AN ADDITION OF RS.25,69,055/- BEING 12.50% OF THE AMOUNT OF ALLEGED PURCHASES. 3. IN THIS CASE A PIECE OF INFORMATION WAS RECEIVED FROM THE DIRECTOR GENERAL OF INCOME-TAX (INV.), MUMBAI THAT SOME BUSINESSMEN HAD INDULGED IN THE ACCEPTANCE OF BOGUS PURCHASE BILLS FROM THE BOGUS HAWALA BILLS PROVIDERS. IT WAS INFORMED THAT SALES TAX DEPARTMENT, MUMBAI, GOVT, OF MAHARASHTRA CARRIED ON DETAILED ENQUIRES IN RESPECT OF ABOVE PARTIES AND RECORDED STATEMENTS, DEPOSITION, AFFIDAVITS ETC. OF MAIN PERSONS OF ABOVE CONCERN WHICH ESTABLISHED THAT THIS CONCERN IS INTO PROVIDING BOGUS BILLS. IT IS ALSO ESTABLISHED THAT NO ACTUAL GOODS OR SERVICES ARE DELIVERED BY THESE PARTIES TO THEIR CUSTOMERS AND THEY ISSUED ONLY BOGUS BILLS AFTER CHARGING SMALL COMMISSION. AS PER THIS INFORMATION, THE ASSESSEE IS A BENEFICIARY OF SUCH BOGUS PURCHASE BILLS AND DURING THE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER CONSIDERATION HAD ACCEPTED BOGUS BILLS FROM THE FOLLOWING PARTIES: HAWALA TIN HAWALA NAME AMOUNT 27400584638V KESAR ENTERPRIESES 406419 27610633847V SHIV SAGAR ENTERPRISES 4,11,585 ITA NO.7438/MUM/2016. SHRI HARAKCHAND K SHAH. 3 27140326567V SARADGI SYNDICATE 1,84,605 27740523050V SURAJ STEEL INDIA 2,84,357 27370565400V SUNRISE ENTERPRISES 3,03,630 27760615092V RELIANCE METAL ALLOY 2,03,012 27130593177V NAVKAR TRADERS 2,84,120 27030265566V AMAR ENTERARISE 3,08,124 27500353238V RAJ IMPEX 6,10,275 27460633008V MEGHDOOT IMPEX INDIA 28,61,299 27160396008V MONAL METAL ALLOYS PVT. LTD. 38,27,935 27910631645V NAVYUK TRADING COMPANY 1,08,67,082 TOTAL 2,05,52,443 4. IN A BACKDROP OF THE FACTS STATED EARLIER THE ASSESSING OFFICER HAD REASON TO BELIEVE THE INCOME HAS ESCAPED THE ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE INCOME TAX ACT, 1961. AS CONSEQUENCE, NOTICE U/S 148 DATED 26.03.2014 WAS ISSUED, AFTER RECORDING THE REASONS FOR ISSUANCE OF NOTICE U/S 148 AS REQUIRED BY PROVISION OF SECTION 148 OF THE L.T. ACT. 5. THE ASSESSING OFFICER HAD ISSUED NOTICE U/S 133(6) TO ALL THE PARTIES WHICH RETURNED BACK UNSERVED WITH REMARKS LEFT' OR 'NOT KNOWN'. THE ASSESSEE WAS ASKED TO PRODUCE THE PARTIES. THE ASSESSEE FAILED TO DO SO. ACCORDINGLY, VIDE ORDER SHEET NOTING DATED 02/03/2015, HE WAS ASKED TO EXPLAIN AS TO WHY ITA NO.7438/MUM/2016. SHRI HARAKCHAND K SHAH. 4 THE SAID PURCHASES OF RS.2,05,52,443 SHOULD NOT BE TREATED AS BOGUS AND ADDED TO THE INCOME OF THE ASSESSEE. 6. IN RESPONSE, THE A.R. VIDE LETTER DATED 09/03/2015 SUBMITTED HIS EXPLANATION. THE ASSESSEE FILED COPIES OF PURCHASE INVOICES, DELIVERY CHALLANS, ACCOUNT STATEMENT OF PAYMENTS MADE. THE ASSESSING OFFICER OBSERVED FROM THE DETAILS FILED BY THE ASSESSEE THAT THERE WERE NO DETAILS OF TRANSPORTATION OF THE GOODS, WEIGHMENT SLIP, LORRY RECEIPT AND ANY OTHER CORROBORATIVE EVIDENCES TO PROVE THAT THE PURCHASES MADE WERE GENUINE. IT WAS JUST A MERE GENERAL SUBMISSION. 7. THE ASSESSING OFFICER HELD THAT THE ASSESSEE HAD PURCHASED THE GOODS FROM THE GREY MARKET AND OBTAINED BOGUS BILLS FROM OTHER PARTIES AND DID THE SAME TO GET SOME BENEFIT. 8. THE ASSESSING OFFICER RELIED UPON THE INDEPENDENT ENQUIRIES AND INVESTIGATION MADE BY THE SALES TAX DEPARTMENT, ADMISSION OF THE PARTIES BEFORE THE SALES TAX DEPARTMENT THAT THE MODUS OPERANDI WAS TO COLLECT CHEQUES, DEPOSIT THEM IN THE BANK, WITHDRAW CASH AND HAND IT OVER TO THE ASSESSEE. 9. THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 145(3) OF THE INCOME TAX ACT, 1961 AND REJECTED THE BOOKS OF ACCOUNTS. HE PLACED RELIANCE UPON THE DECISION OF THE ITAT IN THE CASE OF SHRI KISHAN MALPANI (ITA NO. 1405/JP/1997) AND SUPREME COURT IN CASE OF KANCHWALA GEMS. ITA NO.7438/MUM/2016. SHRI HARAKCHAND K SHAH. 5 10. BASED ON THE ABOVE, THE ASSESSING OFFICER ESTIMATED THE PROFIT ELEMENT ON OF INFLATION OF PURCHASES @12.5% OF TOTAL PURCHASE AND ADDED RS.25,69,055 TO THE TOTAL INCOME OF THE ASSESSEE AGAINST WHICH THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THIS OFFICE. 11. AGAINST THE ABOVE ORDER, ASSESSEE APPEALED BEFORE THE LEARNED CIT(A) CHALLENGING BOTH THE VALIDITY OF REOPENING AS WELL AS THE MERITS OF ADDITION. LEARNED CIT(A) DISMISSED THE ISSUE RAISED BY THE ASSESSEE CHALLENGING THE VALIDITY OF REOPENING AND ALSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION OF 12.5% OF THE BOGUS PURCHASE. THE RELEVANT PORTION OF LEARNED CIT(A);S ORDER READ AS UNDER:- 5.1 SO FAR THE VALIDITY OF RE-OPENING IS CONCERNED, IT IS FOUND THAT THE REASONS FOR RE-OPENING WAS BASED ON OUTCOME OF ENQUIRIES CONDUCTED BY THE OFFICE OF DGIT(INV.), MUMBAI AND SALES TAX DEPARTMENT. THE INFORMATION RECEIVED WAS SPECIFIC. THE ASSESSEE HAD MADE BOGUS PURCHASES FROM SEVERAL PARTIES AS PER INFORMATION FROM THE OFFICE OF THE DGIT(INV.) AND SALES TAX DEPARTMENT. THE AO HAS ALSO APPLIED HIS MIND INDEPENDENTLY AFTER RECEIPT OF INFORMATION. HE WAS SATISFIED THAT THE CONTENTS OF THE INFORMATION WAS HAVING RATIONAL NEXUS/ RELEVANT TO THE FACTS OF THE ASSESSEE. THEREFORE, IT IS FOUND THAT THE NOTICE UNDER SECTION 148 WAS ISSUED ON THE BASIS OF FRESH INFORMATION AND TANGIBLE MATERIALS. IN VIEW OF ABOVE, GROUND CHALLENGING THE INITIATION OF RE- ASSESSMENT PROCEEDINGS IS DISMISSED. 5.2 SO FAR THE ADDITION ON ACCOUNT OF THE PURCHASES ARE CONCERNED, IT IS FOUND THAT THE NOTICES U/S 133(6) ISSUED TO ALL THE PARTIES RETURNED UNSERVED WITH THE REMARKS 'LEFT' OR 'NOT KNOWN' . THE ASSESSEE FAILED TO PRODUCE THE PARTIES IN SPITE OF SPECIFIC REQUESTS MADE BY THE AO. NEITHER ANY OTHER TRACEABLE ADDRESS OF ANY OF THE PARTIES WAS FILED BY THE ASSESSEE. THE ENQUIRIES AND INVESTIGATION CONDUCTED BY THE SALES TAX DEPARTMENT ALONG WITH ITA NO.7438/MUM/2016. SHRI HARAKCHAND K SHAH. 6 THE DEPOSITION OF ALLEGED SUPPLIERS CLEARLY ESTABLISH THESE PARTIES HAVE ISSUED BOGUS BILLS WITHOUT ANY SUPPLY OF GOODS. THE AO HAS CONFRONTED ALL THE MATERIALS AND FINDINGS TO THE ASSESSEE. IN FACT, FINDINGS OF THE SALES TAX DEPARTMENT WERE AVAILABLE ON ITS WEB- SITE AND IT WAS IN PUBLIC DOMAIN. THE ASSESSEE HAS ALSO FAILED TO BRING EVIDENCE OF ACTUAL TRANSPORTATION AND DELIVERY OF GOODS. THEREFORE, IT IS HELD THAT THE APPELLANT HAS FAILED TO PROVE THAT THE GOODS WERE PURCHASED FROM THE AFORESAID PARTIES. 5.3 SO FAR REJECTION OF BOOKS IS CONCERNED, THE ACTION OF THE AO IS FOUND TO BE JUSTIFIED SINCE ENTRIES OF UNVERIFIABLE OR UNPROVED PURCHASES WERE MADE IN THE BOOKS. THEREFORE, GROUND CHALLENGING REJECTION OF BOOKS IS DISMISSED. 5.4 ON THE ISSUE OF BOGUS PURCHASE, DECISIONS LIKE VIJAY PROTEINS LTD. VS. CIT [2015] 58 TAXMANN.COM 44 (GUJ) , CIT VS. SIMIT P. SHETH [2013] 356 ITR 451 (GUJ.) AND SEVERAL OTHER DECISIONS SUPPORT DISALLOWANCE OF CERTAIN PERCENTAGE OF PURCHASE PRICE. THE DISALLOWANCE IS JUSTIFIED BECAUSE THE EXACT SOURCE OF GOODS OR EXACT AMOUNT OF INFLATION IS KNOWN TO THE ASSESSEE ONLY. FURTHER, WITHOUT A MUCH BIGGER BENEFIT THAN THE NORMAL GP RATIO, NO PRUDENT PERSON WILL ENTER INTO TRANSACTIONS OF PURCHASING MATERIALS FROM ONE SOURCE AND TAKING BILLS FROM ANOTHER. AS A CONSEQUENCE, THE PROFIT EMBEDDED IN SUCH TRANSACTIONS OF PURCHASE AND SALES WILL BE MUCH HIGHER THAN NORMAL GP RATIO. 5.5 IN THE FACTS AND CIRCUMSTANCES OF THE CASE, I FIND DISALLOWANCE OF 12.5% OF PURCHASE BY THE AO TO BE FAIR AND REASONABLE IN THIS CASE. THE PROFIT EMBEDDED IN SUCH TRANSACTIONS OF PURCHASE AND SALES HAS TO BE MUCH HIGHER THAN NORMAL GP RATIO. ACCORDINGLY, THE ADDITION OF RS. 25,69,055/- IS UPHELD. 12. AGAINST THE ABOVE ORDER OF LEARNED CIT(A), ASSESSEE IS IN APPEAL BEFORE THE ITAT. 13. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. ITA NO.7438/MUM/2016. SHRI HARAKCHAND K SHAH. 7 14. 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 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 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. ITA NO.7438/MUM/2016. SHRI HARAKCHAND K SHAH. 8 15. 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 '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 SECTION 147(A) (AS THE PROVISION STOOD AT THE RELEVANT TIME) FULFILLMENT OF THE TWO REQUISITE CONDITIONS IN THAT REGARD IS ESSENTIAL. AT THAT STAGE, THE FINAL OUTCOME OF THE PROCEEDING IS NOT RELEVANT. IN OTHER WORDS, AT THE INITIATION STAGE, WHAT IS REQUIRED IS 'REASON TO BELIEVE', BUT NOT THE ESTABLISHED FACT OF ESCAPEMENT OF INCOME. AT THE STAGE OF ISSUE OF NOTICE, THE ONLY QUESTION IS WHETHER THERE WAS RELEVANT MATERIAL ON WHICH A REASONABLE PERSON COULD HAVE FORMED A REQUISITE BELIEF WHETHER THE MATERIALS WOULD CONCLUSIVELY PROVE THE ITA NO.7438/MUM/2016. SHRI HARAKCHAND K SHAH. 9 ESCAPEMENT IS NOT THE CONCERN AT THAT STAGE. THIS IS SO BECAUSE THE FORMATION OF BELIEF BY THE AO IS WITHIN THE REALM OF SUBJECTIVE SATISFACTION ITO V. SELECTED DALURBAND COAL CO, (P.) LTD. (1996) 217 ITR 597 (SUPREME COURT): RAYMOND WOOLLEN MILLS LTD. V. ITO (1999) 236 ITR 34 (SUPREME COURT). 16. THE ABOVE DISCUSSION AND PRECEDENT FROM APEX COURT 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 HONBLE APEX COURT DECISION, THE OTHER CASE LAWS REFERRED BY ASSESSEE ARE NOT SUPPORTING THE ASSESSEES CASE. 17. 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 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 TRANSPORTATION OF GOODS HAVE NOT BEEN PROVIDED BY THE ASSESSEE. IN THIS FACTUAL SCENARIO IT IS AMPLY THAT ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS. MERE PREPARATION ITA NO.7438/MUM/2016. SHRI HARAKCHAND K SHAH. 10 OF DOCUMENTS FOR PURCHASES CANNOT CONTROVERT OVERWHELMING EVIDENCE THAT THE PROVIDER OF THESE BILLS ARE BOGUS AND NON-EXISTENT AND THERE IS NO COGENT EVIDENCE OF TRANSPORTATION OF GOODS. THE SALES TAX DEPARTMENT IN ITS ENQUIRY HAVE 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. 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. 18. 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 HONBLE 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. 19. IN THESE CIRCUMSTANCES LEARNED DEPARTMENTAL REPRESENTATIVE HAS REFERRED TO HONBLE 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