CHIRAG R. SHAH, MUMBAI V. ITO 31(1)(3), MUMBAI

ITA 792/MUM/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0045 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 17-07-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 03-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V JANARDHANAN
• Keywords: Bogus purchase; Rejection of books of accounts; Tangible material; Accommodation entries; Reason to believe; Reassessment proceedings
• Section: 143(3); 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.792/MUM/2017 : ASST.YEAR 2009-2010 SHRI CHIRAG R. SHAH E-29, 2 ND FLOOR, HIREN SHIPPING CENTRE M.G.ROAD, GOREGAON (WEST) MUMBAI 400 062. PAN : AVQPS7888H. / VS. INCOME TAX OFFICER WARD 31(1)(3) MUMBAI ( / APPELLANT) ( / RESPONDENT) /APPELLANT BY : --- NONE --- /RESPONDENT BY : SHRI V.JANARDHANAN / DATE OF HEARING : 27.06.2017 / DATE OF PRONOUNCEMENT : 07.09.2017 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF LEARNED CIT(A) DATED 02.09.2016 AND PERTAINS TO ASSESSMENT YEAR 2009-2010. 2. THE ISSUE RAISED IS THAT CIT(A) ERRED IN SUSTAINING DISALLOWANCE OF 8% OF BOGUS PURCHASE AMOUNTING TO RS.18,81,261. 3. THE GROUNDS OF APPEAL READ AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN (A) ARRIVING AT THE CONCLUSION THAT PURCHASES MADE OF RS. 1881261/-FROM PARTIES MENTIONED IN ASSESSMENT ORDER ARE NOT GENUINE AND NOT MADE FROM THEM BUT FROM OTHER SOURCES. ITA NO.792/MUM/2017. SHRI CHIRAG R. SHAH. 2 (B) CONFIRMING ESTIMATION OF PROFIT ELEMENT @ 8% ON ALLEGED NON GENUINE PURCHASES OF RS.23515773/- WHICH IS OVER AND ABOVE THE NORMAL PROFIT DECLARE @ 1.63% IN BOOKS OF ACCOUNTS. (B) CONFIRMING ADDITION OF RS. 1881261/- MADE BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE APPELLANT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN CONFIRMING ACTION OF THE ASSESSING OFFICER OF REJECTION OF BOOKS OF ACCOUNTS OF THE APPELLANT BY INVOKING PROVISIONS OF SECTION 145(3) OF THE ACT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN AND FAILED TO APPRECIATE THAT (A) PROCEEDING INITIATED UNDER SECTION 147 /148 OF THE ACT IS ON THE BASIS OF REASON TO SUSPECT AND NOT ON REASON TO BELIEVE. (B) THERE IS NO NEW TANGIBLE MATERIAL IN POSSESSION OF THE ASSESSING OFFICER WHICH JUSTIFY ISSUANCE OF NOTICE U/S 148 OF THE ACT (D) THE INITIATION OF PROCEEDING UNDER SECTION 147 OF THE ACT AND ISSUANCE OF NOTICE UNDER SECTION 148 IS BAD IN LAW AND CONTRARY TO THE PROVISIONS OF THE ACT AND LIABLE TO BE CANCELLED / ANNULLED 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING ORDER MADE UNDER SECTION 143(3) RWS 147 OF THE ACT BY THE LEARNED ASSESSING OFFICER WHICH IS ILLEGAL, BAD-IN-LAW, ULTRA VIRES AND WITHOUT ALLOWING REASONABLE OPPORTUNITY OF THE HEARING, WITHOUT APPRECIATING THE FACTS, SUBMISSION AND EVIDENCES IN THEIR PROPER PERSPECTIVE, WITHOUT PROVIDING COPIES OF MATERIAL USED AGAINST THE APPELLANT AND WITHOUT PROVIDING CROSS EXAMINATION, SAME IS LIABLE TO BE ANNULLED. ITA NO.792/MUM/2017. SHRI CHIRAG R. SHAH. 3 5. THE LEARNED ASSESSING OFFICER ERRED IN CHARGING INTEREST UNDER SECTION 234A, 234B, 234C AND 234D OF THE ACT. 6. THE APPELLANT CRAVE LEAVE TO ADD, AMEND, ALTER AND / OR VARY ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 4. IN THIS CASE, THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING IN FERROUS AND NON-FERROUS METALS UNDER THE NAME & STYLE OF M/S CHIRAG ENTERPRISES. THE ASSESSEE HAD FILED HIS RETURN OF INCOME FOR A.Y. 2009- 10 ON 28.09.2009 DECLARING A TOTAL INCOME OF RS. 3,31,681/-. THE SAME WAS ASSESSED U/S 143(3) OF THE ACT ON 30.12.2011 AND THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED AT RS. 5,29,180/-. SUBSEQUENTLY THE AO RECEIVED INFORMATION FROM THE OFFICE OF THE DGIT(INV), MUMBAI/SALES TAX DEPARTMENT, MUMBAI THAT THE ASSESSEE IS A BENEFICIARY OF BOGUS BILLS OF PURCHASES ISSUED BY CERTAIN SUSPECTED HAWALA DEALERS. THE INFORMATION WAS THAT THE CONCERNED DEALERS HAD NOT SOLD ANY ACTUAL GOODS BUT HAD GIVEN BOGUS BILLS OF SALES MADE TO THE ASSESSEE. THE AO NOTED THAT THE ASSESSEE HAS TAKEN ACCOMMODATION ENTRIES FROM SEVEN HAWALA DEALERS TOTALING RS. 2,35,15,773/-. ACCORDINGLY THE AO INITIATED ACTION SECTION 147 OF THE ACT IN THE REASSESSMENT PROCEEDINGS THE AO ISSUED NOTICES U/S 133(6) OF THE ACT TO THE ALLEGED HAWALA DEALERS BUT THE NOTICES COULD NOT BE SERVED ON THE DEALERS BY THE POSTAL AUTHORITIES AS THE DEALERS WERE NOT AVAILABLE AT THE DECLARED ADDRESSES OR WERE 'NOT KNOWN'. WHEN THE AO CONFRONTED THE ASSESSEE ABOUT THE SAME THE ASSESSEE CLAIMED THAT HE HAS THE RELEVANT PURCHASE INVOICES, DELIVERY CHALLANS AND LEDGER ACCOUNTS OF THE SUPPLIERS AND THE PAYMENTS HAVE BEEN MADE BY CHEQUES. THE AO DISPUTED THE CLAIM OF THE ASSESSEE AND NOTED THAT NO DELIVERY CHALLANS, ITA NO.792/MUM/2017. SHRI CHIRAG R. SHAH. 4 LORRY RECEIPTS OR OTHER TRANSPORTATION DETAILS HAVE BEEN PRODUCED BY THE ASSESSEE. 5. THE AO HELD THE PURCHASES TO BE BOGUS ON THE BASIS OF THE STATEMENTS MADE BY THE ALLEGED DEALERS BEFORE THE SALES TAX AUTHORITIES ADMITTING THAT THEY HAVE NOT MADE ANY ACTUAL SALES BUT THEY ONLY PROVIDE ACCOMMODATION ENTRIES OF EXPENSES. THE AO ALSO NOTED THAT NO STOCK RECORDS OR TRANSPORTATION BILLS WERE PRODUCED BY THE ASSESSEE. THE AO HOWEVER ACCEPTED THE SALES AND HELD THAT THE ASSESSEE MUST HAVE MADE PURCHASES ALSO BUT THESE PURCHASES WERE NOT MADE FROM THE ALLEGED HAWALA DEALERS. IN VIEW OF THE ABOVE FACTS THE AO REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE U/S 145(3) OF THE ACT AND CALCULATED A G.P. OF 8% ON THE BOGUS PURCHASES OF RS.2,35,15,773/- AND HELD THAT THE RESULTANT AMOUNT OF RS. 18,81,261/- AS TAXABLE PROFIT ELEMENT IN THE BOGUS PURCHASES. 6. AGAINST THE ABOVE ORDER, ASSESSEE APPEALED BEFORE THE LEARNED CIT(A). THE CIT(A) CONFIRMED THE VALIDITY OF REOPENING OF THE CASE AS WELL AS ACTION OF THE ASSESSING OFFICER IN MAKING ADDITION OF 8% OF THE BOGUS PURCHASE. 7. AS REGARDS THE REOPENING OF THE CASE, LEARNED CIT(A) HELD AS UNDER:- THE ARGUMENTS OF THE ASSESSEE ARE CONSIDERED AND IT IS HELD THAT THESE HAVE NO FORCE. THE AO HAD REOPENED THE PROCEEDINGS AFTER HAVING REASONS TO BELIEVE THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. THE ASSESSING OFFICER HAD INFORMATION THAT THE SUSPECT HAWALA DEALERS HAVE GIVEN STATEMENTS TO THE SALES TAX DEPARTMENT THAT THEY ARE ONLY PROVIDING ACCOMMODATION ENTRIES OF BILLS OF PURCHASE AND THEY ARE NOT GENUINELY DEALING WITH ANY ITEM OF TRADE. THE SET OFF CLAIMED FOR VAT DECLARED PAID ON THE BILLS OF PURCHASE FROM THE BOGUS HAWALA DEALERS IS ITSELF ITA NO.792/MUM/2017. SHRI CHIRAG R. SHAH. 5 EVIDENCE THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. THE REASONS RECORDED BY THE AO IN THIS CASE BEFORE ISSUE OF THE NOTICE U/S 148 ARE VERY SPECIFIC AND THE SOURCE OF THE INFORMATION IS CLEARLY SPELT OUT. THE GUJARAT HIGH COURT IN THE RECENT CASE OF PEASS INDUSTRIAL ENGINEERS PVT LTD VS. DCIT IN SLA NO. 3249 OF 2016 DATED 05/08/2016 HAD DISCUSSED A SIMILAR SITUATION WHERE THE INFORMATION ABOUT THE BOGUS PURCHASES HAD BEEN RECEIVED BY THE AO FROM THE INVESTIGATION WING OF THE DEPARTMENT. THE HIGH COURT AFTER CONSIDERING THE VARIOUS CASE LAWS ON THE SUBJECT HAS UPHELD THE ISSUANCE OF NOTICE U/S 148 OF THE ACT WITH THE FOLLOWING DECISION: 'WE ARE OF THE OPINION THAT WHEN THE AUTHORITY IS ARMED WITH THE TANGIBLE MATERIAL IN THE FORM OF SPECIFIC INFORMATION RECEIVED BY THE INVESTIGATION WING, AHMEDABAD IS THOROUGHLY JUSTIFIED IN ISSUING A NOTICE FOR REASSESSMENT. IT IS REVEALED FROM THE SAID ADDITIONAL MATERIAL AVAILABLE ON HAND A REASONABLE BELIEF IS FORMED BY THE ASSESSING AUTHORITY THAT INCOME OF THE PETITIONER HAS ESCAPED ASSESSMENT AND THEREFORE, ONCE THE REASONABLE BELIEF IS FORMULATED BY THE AUTHORITY ON THE BASIS OF COGENT TANGIBLE MATERIAL, THE AUTHORITY IS NOT EXPECTED TO CONCLUDE AT THIS STAGE THE ISSUE FINALLY OR TO ASCERTAIN THE FACT BY EVIDENCE OR CONCLUSION, WE ARE OF THE OPINION THAT FUNCTION OF THE ASSESSING AUTHORITY AT THIS STAGE IS TO ADMINISTER THE STATUTE AND WHAT IS REQUIRED AT THIS STAGE IS A REASON TO BELIEVE AND NOT ESTABLISH FACT OF ESCAPEMENT OF INCOME AND THEREFORE, LOOKING TO THE SCOPE OF SECTION 147 AS ALSO SECTIONS 148 TO 152 OF THE ACT, EVEN IF SCRUTINY ASSESSMENT HAS BEEN UNDERTAKEN, IF SUBSTANTIAL NEW MATERIAL IS FOUND IN THE FORM OF INFORMATION ON THE BASIS OF WHICH THE ASSESSING AUTHORITY CONFORM A BELIEF THAT THE INCOME OF THE PETITIONER HAS ESCAPED ASSESSMENT, IT IS ALWAYS OPEN FOR THE ASSESSING AUTHORITY TO REOPEN ASSESSMENT. FROM THE REASONS WHICH ARE RECORDED, IT CLEARLY EMERGES THAT THE PETITIONER IS THE BENEFICIARY OF THOSE ENTRIES BY KAYAN BROTHERS, WHO ARE WELL KNOWN ENTRY OPERATORS ACROSS THE COUNTRY AND THIS FACT HAS BEEN UNEARTHED ON ACCOUNT OF THE INFORMATION RECEIVED BY DGIT INVESTIGATION BRANCH AND THEREFORE, IT CANNOT BE SAID IN ANY WAY ITA NO.792/MUM/2017. SHRI CHIRAG R. SHAH. 6 THAT EVEN IF FOUR YEARS HAVE BEEN PASSED, IT IS NOT OPEN FOR THE AUTHORITY TO REOPEN THE ASSESSMENT. IN THE PRESENT CASE, THERE WAS INDEPENDENT APPLICATION OF MIND ON BEHALF OF THE ASSESSING AUTHORITY IN ARRIVING AT THE CONCLUSION THAT INCOME HAD ESCAPED ASSESSMENT AND THEREFORE, THE CONTENTIONS RAISED BY THE PETITIONER ARE DEVOID OF MERITS. DEALING WITH THE CONTENTIONS OF THE PETITIONER THAT THE INFORMATION RECEIVED FROM DGIT, INVESTIGATION BRANCH, AHMEDABAD, CAN NEVER BE SAID TO BE ADDITIONAL INFORMATION. WE ARE OF THE OPINION THAT THE INFORMATION WHICH HAS BEEN RECEIVED IS ON 26.3.2015 FROM THE DGIT, INVESTIGATION BRANCH, AHMEDABAD, WHEREBY IT HAS BEEN REVEALED THAT PRESENT PETITIONER IS ALSO THE BENEFICIARIES OF THOSE KAYAN BROTHERS, -WHO ARE IN THE ACTIVITY OF ENTRY OPERATION THROUGHOUT THE COUNTRY AND THEREFORE, IT CANNOT BE SAID THAT THIS IS NOT JUSTIFIABLE MATERIAL TO FORM A REASON TO BELIEF BY THE AUTHORITY AND THEREFORE, THIS BEING A CASE, THE AUTHORITY IS JUSTIFIED IN ISSUING NOTICE UNDER SECTION 148 OF THE ACT TO REOPEN THE ASSESSMENT AND THEREFORE, THE CHALLENGE CONTAINED IN THE PETITION BEING DEVOID OF MERITS, SAME DESERVES TO BE DISMISSED.' THIS DECISION IS DIRECT ON THE ISSUES INVOLVED IN THE PRESENT CASE AND IS SQUARELY APPLICABLE. FURTHER AT THE TIME OF ISSUING A NOTICE U/S 148 OF THE ACT THE AO IS ONLY REQUIRED TO POSSESS A PRIMA FACIE VIEW AND THE AO IS NOT REQUIRED TO HAVE ABSOLUTE PROOF. THIS IS DECLARED IN THE FOLLOWING DECISIONS: (A) RAYMOND WOOLLEN MILLS LTD. V. ITO [1999] 236 ITR 34 (SC) IN THIS CASE IT WAS HELD THAT INSUFFICIENCY OF REASONS COULD NOT BE A GROUND FOR QUASHING OF THE NOTICE UNDER SECTION 148 AT ITS THRESHOLD. (B) SHREE BAJRANG COMMERCIAL CO. (P.) LTD. [2004] 269 ITR 338 (CAL.). (C) CIT V. NOVA PROMOTERS & FINLEASE (P) LTD [2012] 342 ITR 169 (DELHI). IN THIS CASE THE QUESTION AS WHETHER AT STAGE OF ISSUING NOTICE UNDER SECTION 148 MERITS OF MATTER ARE NOT RELEVANT AND ASSESSING OFFICER AT THAT STAGE IS REQUIRED TO FORM ONLY A PRIMA ITA NO.792/MUM/2017. SHRI CHIRAG R. SHAH. 7 FACIE BELIEF OR OPINION THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT? THE ANSWER WAS GIVEN IN THE AFFIRMATIVE. IT IS FURTHER SEEN THAT IN THIS CONNECTION THAT THE FOLLOWING OBSERVATIONS OF THE SUPREME COURT IN THE CASE OF INCOME-TAX OFFICER, CUTTACK AND OTHERS VS. BIJU PATNAIK (1991) 188 ITR 247 ARE VERY RELEVANT:- 'IT IS UNDOUBTEDLY TRUE THAT THE NOTICE DOES NOT PRIMA FACIE DISCLOSE THE SATISFACTION OF THE TWO CONDITIONS PRECEDENT ENJOINED UNDER SECTION 147(A), BUT IN THE COUNTER AFFIDAVIT FILED BY THE INCOME TAX OFFICER IN THE HIGH COURT, HE STATED ALL THE MATERIAL FACTS. THE RESPONDENT HAD INSPECTED THE RECORD AND THE RECORD ALSO BEARS OUT THE EXISTENCE OF THE MATERIAL FACTS. THE PROCEEDINGS DRAWN UP WHICH ARE ABSTRACTED EARLIER ALSO SHOW THAT THE INCOME TAX OFFICER HAD APPLIED HIS MIND TO THE FACT ON RECORD AND 'WAS PRIMA FACIE SATISFIED THAT THE REOPENING OF THE ASSESSMENT FOR THE ASSESSMENT YEAR 1957-58 WAS NEEDED DUE TO THOSE STATED FACTS. THUS, THOUGH EX FACIE THE NOTICE DOES NOT DISCLOSE THE SATISFACTION OF THE REQUIREMENT OF SECTION 147 (A), FROM THE RECORD AND THE AVERMENTS IN THE COUNTER AFFIDAVIT, IT IS CLEAR THAT THE INCOME TAX OFFICER HAD APPLIED HIS MIND TO THE FACTS AND, AFTER PRIMA FACIE SATISFYING HIMSELF OF THE EXISTENCE OF THOSE TWO CONDITIONS PRECEDENT, REACHED THE CONCLUSION FOR REOPENING THE ASSESSMENT. IT IS SETTLED LAW THAT, IN AN ADMINISTRATIVE ACTION, THOUGH THE ORDER DOES NOT EX FACIE DISCLOSE THE SATISFACTION BY THE OFFICER OF THE NECESSARY FACTS IF THE RECORD DISCLOSES THE SAME, THE NOTICE OR THE ORDER DOES NOT PER SE BECOME ILLEGAL. '(EMPHASIS SUPPLIED) IN VIEW OF THE ABOVE FACTS AND THE ABOVE CASE LAWS THE ASSESSEE'S CHALLENGE TO THE RE-OPENING OF THE ASSESSMENT IS REJECTED. 8. AS REGARDS THE MERITS OF THE CASE, THE LEARNED CIT(A) AFFIRMED THE ACTION OF THE ASSESSING OFFICER AND ALSO NOTED AS UNDER:- ITA NO.792/MUM/2017. SHRI CHIRAG R. SHAH. 8 IN THE APPELLATE PROCEEDINGS THE ASSESSEE HAD PRODUCED SOME COPIES OF THE DELIVERY CHALLANS BUT IT WAS SEEN THAT THE DELIVERY CHALLANS APPEAR TO BE CONCOCTED SINCE THEY WERE NOT FILED DURING THE ASSESSMENT STAGE AND THE CHALLANS HAVE NO NOTATION OF ANY PERSON RECEIVING OR SELLING THE MATERIAL. THIS FACT WAS NOTED ON ORDER SHEET DATED 24.08.2016 AND THE AR HAS WITNESSED IT BY SIGNING. 9. AGAINST THE ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE THE ITAT. 10. I HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORDS. AN ADJOURNMENT PETITION HAS BEEN MOVED ON BEHALF OF THE ASSESSEE. IT IS NOTED THAT THIS CASE HAS EARLIER CLEAR ALSO BEEN FIXED FOR HEARING AND THE SAME WAS ADJOURNED ON THE BASIS OF ASSESSEES REQUEST. IT IS NOTED THAT ISSUE RELATING TO BOGUS PURCHASES HAS BEEN DISPOSED OF BY ITAT MUMBAI BENCHES IN SEVERAL CASES. HENCE THIS ADJOURNMENT PETITION HAS BEEN REJECTED. 11. AS REGARDS THE MERITS OF THE CASE, 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. 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. INSPECTOR FROM THE DEPARTMENT HAS ALSO CONFIRMED THE NONEXISTENCE OF THESE PARTIES HAD THE SAID ACTRESSES. ASSESSEE HAS NOT BEEN ABLE TO PROVIDE ANY CONFIRMATION FROM ANY OF THE PARTY. ASSESSEE HAS ITA NO.792/MUM/2017. SHRI CHIRAG R. SHAH. 9 ALSO NOT BEEN ABLE TO PRODUCE ANY OF THE PARTIES. IN THIS FACTUAL SCENARIO IT IS AMPLY THAT ASSESSEE HAS OBTAINED BOGUS PURCHASE BILLS. MERE PREPARATION OF DOCUMENTS FOR PURCHASES CANNOT CONTROVERT OVERWHELMING EVIDENCE THAT THE PROVIDER OF THESE BILLS ARE BOGUS AND NON-EXISTENT. 12. THE SALES TAX DEPARTMENT IN ITS ENQUIRY HAVE FOUND THAT 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. I FIND IT FURTHER STRANGE THAT ASSESSEE WANTS THE REVENUE TO PRODUCE ASSESSEES OWN VENDERS, WHOM THE ASSESSEE COULD NOT PRODUCE. THE PURCHASE BILLS FROM THESE NON-EXISTENT / 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. 13. I FURTHER FIND THAT HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF NIKUNJ ENTERPRISES HAS UPHELD 100% ALLOWANCE FOR THE PURCHASES WHEN THE SALES ITA NO.792/MUM/2017. SHRI CHIRAG R. SHAH. 10 HAVE NOT BEEN DOUBTED. HOWEVER, THE FACTS OF THAT CASE WERE DIFFERENT. FURTHERMORE, THE SALES IN THAT CASE WERE BASICALLY TO GOVERNMENT DEPARTMENTS. HENCE THE RATIO FROM THIS DECISION IS NOT APPLICABLE ON THE FACTS OF THE CASE. 14. 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 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 HONBLE APEX COURT VIDE ORDER DATED 16.1.2017. 15. I FURTHER NOTE THAT HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT JAIPUR V. M/S.SHRUTI GEMS IN ITA NO.658/2009 VIDE ORDER DATED 23.05.2017 HAS INTER ALIA REFERRED TO THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN ITA NO.234/2008 IN CASE OF CIT JAIPUR V. ADITYA GEMS FOR THE FOLLOWING DECISION:- CONSIDERING THE LAW DECLARED BY THE SUPREME COURT IN THE CASE OF VIJAY PROTEINS LTD. VS. COMMISSIONER OF INCOME TAX, SPECIAL LEAVE TO APPEAL (C) NO.8956/2015 DECIDED ON 06.04.2015 BY THE SUPREME COURT HAS DISMISSED THE SLP CONFINED THE ORDER DATED 09.12.2014 PASSED BY THE GUJARAT HIGH COURT AND OTHER DECISIONS OF THE HIGH COURT OF GUJARAT IN THE CASE OF SANJAY OILCAKE INDUSTRIES VS. COMMISSIONER OF INCOME TAX (2009) 316 ITR 274 (GUJ) AND N.K. INDUSTRIES LTD. VS. DY. C.I.T, TAX APPEAL NO.240/2003 DECIDED ON 20.06.2016, THE PARTIES ARE BOUND BY THE PRINCIPLE OF LAW PRONOUNCED IN THE AFORESAID THREE JUDGMENTS. ITA NO.792/MUM/2017. SHRI CHIRAG R. SHAH. 11 16. HOWEVER, I NOTE THAT THIS IS NOT AN APPEAL BY THE REVENUE. HENCE IT WILL NOT BE APPROPRIATE TO TAKE AWAY THE RELIEF ALREADY GRANTED BY THE REVENUE TO THE ASSESSEE. HENCE, I CONFIRM THE ORDER OF THE LEARNED CIT(A). 17. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED ON THIS 07 TH DAY OF SEPTEMBER, 2017. SD/- ( SHAMIM YAHYA ) ACCOUNTANT MEMBER MUMBAI; DATED : 07 TH SEPTEMBER, 2017. DEVDAS* / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT, MUMBAI. 4. / CIT(A), MUMBAI 5. , , / DR, ITAT, MUMBAI 6. [ / GUARD FILE.