RAJNISH BHARTI HUF,MUMBAI vs. THE INCOME TAX OFFICER 20(3)(1), MUMBAI , LALBAUG, MUMBAI

KANT, AM appeals by the assessee and cr ected against two separate ord by the Ld. Commissioner
Faceless Appeal Centre, Delhi [i ent year 2009-10 & 2010-11
dispute are involved in both heard together and disposed of r the sake of convenience.
up the appeal of the assessee a 2009-10. The relevant groun
:
ned Commissioner of Income Tax Appea in upholding the impugned assessment o arned Assessing Officer (Ld. A.O.) u/s out issuing/ serving any notice u/s 148. T er erred in not considering the fact that d to provide any proof of issue/ servi
, despite specific request being mad rejudice to the issue of notice u/s 148, her failed to appreciate that the re gs were null and void as the Ld. A.O. had s of sec 147 without there being any hat the income had escaped assessment.
Rajnish Bharti HUF
2
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
ross appeals by ders, both dated of Income-tax in short ‘the Ld.
respectively. As these appeals, ff by way of this and Revenue for nds raised are al (Ld. CITA) order passed
143(3) r.w.s.
The Ld. CITA the Ld. A.O.
ce of notice de from the the Ld. CITA eassessment d invoked the y reason to 3. Without p the reasse had failed
Court of In with the opening p or examin provided.
4. The impu limitation and accor
Also the im juri iction
5. On the fac
CITA ha
Rs.2,15,36
of the all merely on considerin on record
6. On the fac
CITA has deposits a the fact th reconciliat transactio further err in making unexplaine fact that t had appea the appel accordingl
7. The appel to-
1. Admit the a 2. Quash the Act, 1961,
3. Delete th
Rs.21,11,685
4. Grant any ITA N rejudice, the Ld. CITA has failed to app essment proceedings were bad in law as d to follow the procedure laid down by ndia in case of GKN Drive Shaft as he ha objections raised by the appellant roceedings because no inspection of docu nation/ cross examination of suspicious ugned assessment order is barred by as notice in this case was never serv rdingly notice issued u/s 142(1) was mpugned assessment order has been pas n in law.
cts, in the circumstances of the case and as erred in upholding the disall
6,916/- made by the Ld. AO.by disallow leged bogus purchases worth Rs. 17,2
the basis of doubt, surmises and conject ng the relevant facts on record and with any adverse evidence.
cts, in the circumstances of the case and erred in sustaining the addition of amounting to Rs. 10,55,84,256/-without hat total bank deposits were duly explai tion of bank deposits with sales and oth ns was made available to the CITA. The L red to appreciate that the Ld. A.O. had g g an addition of bank deposits under th ed credits in bank accounts without con the deposits and credits in the said ba ared due to a transfer from another ban llant, so they were not independent ly there was no income due to these credi llant therefore prays your honour to be appeal and grant stay against the deman order of the Ld AO passed u/s 143(3) r.w he disallowance/addition of Rs2,15,36
5/-sustained by the Ld. CITA.
other relief deemed fit by your honours.
Rajnish Bharti HUF
3
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
preciate that the Ld. A.O.
the Supreme ad not dealt t against re- uments and/
parties was the Law of ved u/s 148
time barred.
ssed without d in law, Ld.
lowance of wing 12.50%
22,95,332/-, tures without hout bringing d in law, Ld.
2% of bank t considering ined and full her business
Ld. CITA has grossly erred he pretext of nsidering the ank accounts nk account of credits and its.
kind enough nd.
w.s 147 of IT 6,916/- and Revenue’s Ground:
1. "Whether o the Ld CIT(A Rs.10,55,84,2
account?"
2. "Whether o the Ld CIT(A assessee fail bank account the assessme
3. Briefly stated, engaged in trading o proprietary concern under consideration
27.07.2009 declaring income filed by the Income-tax Act, 19
Assessing Officer r
Firstly, information
(Investigation), Mum
26.12.2012 to the ef reduce and suppres gathered by the sales proceedings against ‘
beneficiaries for su information provided the parties who issue
ITA N on the facts and circumstances of the cas
A) has erred in restricting the additio
256/-to 2% of the unexplained credits on the facts and circumstances of the cas
A) has erred in not considering the fa ed to furnish any explanation, on the c t held by assessee in HDFC and DCB ba ent proceedings?"
facts of the case are that the of goods including steel produ namely M/s Bharti Tradelink n, the assessee filed return g total income at Rs.2,50,580/
e assessee was processed u/s 961 (in short ‘the Act’). Sub eceived information from the n from the Director General mbai was received vide thei ffect that assessee had obtained s profit. The information conta s tax authorities of Maharashtra
‘hawala’ dealers, who had issue uppressing or reducing the d by the Investigation Wing con ed bogus bills to assessee and a Rajnish Bharti HUF
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Nos. 3912 & 3941, 4378 &
4377/MUM/2023
e and in law on made of in the bank e and in law fact that the credits in the anks, during e assessee was cts through his k. For the year of income on -. The return of s 143(1) of the bsequently, the e two sources.
of Income-tax ir letter dated d bogus bills to ained evidences a during inquiry ed bogus bills to eir profit. The ntained name of amount of bogus bills obtained, agg information was rec
Investigation, Unit credits/deposits of R the assessee were ap be explained by the the Assessing Officer
147 of the Act that in issued notice u/s 14
returned back by the said notice was there by the Inspector of subsequent notices i order are reproduced
(i)Notices u/s 14
30.06.2016 by postal authoriti the postal autho
(ii) Thereafter,
26.07.2016 at Oversine Nagar, fixing the heari sent on e-mail
ITA N gregating to Rs.17,22,95,332
ceived from the Asst. Director
Mumbai wherein it was m
Rs.2,30,04,247/- in various ba ppearing and source of deposits assessee. In view of the inform r recorded reasons to believe in ncome escaped assessment and 48 of the Act on 22.03.2016. e postal authorities with the re eafter served on the assessee by the Office of the Assessing Of issued by the AO as mentioned d as under:
42(1) of the Act were issued on the Assessing Officer, which ies but were returned back with orities that party ‘left/not known again one more notice w another address namely Fl
, Rajendra Vihar, Malad West, M ing on 05.08.2016. The said n
IDs of assessee which were g
Rajnish Bharti HUF
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Nos. 3912 & 3941, 4378 &
4377/MUM/2023
2/-.
Secondly, r of Income-tax mentioned that ank accounts of those could not mation received, terms of section d accordingly, he
The said notice emark ‘left’. The way of affixture fficer. Details of d in assessment
17.06.2016 and h were sent by h the remark of n’.
was issued on lat No. 506/B
Mumbai-400064
notice was also gathered by the Assessing Office on the schedule
(iii) Thereafter,
Chartered Acco
Associates, sou matter was adj the said date.
(iv)
Thereafter letter stating th
148 of the Ac provided addres
Nagar Malad We
(v)Accordingly, t
142(1) of the A service of the n for hearing on the part of the a (vi)
The Asse
08.09.2016 alo of the Act an 19.09.2016 bu
(vii) Thereafter,
ITA N er from record. But, no compli ed date of the hearing.
on 10.08.2016 representative o ountant firm namely M/s Ja ught for adjournment and on ourned to 16.08.2016. But no , on 17.08.2016 M/s Jain As hat assessee had not received ct. The Ld. Authorized Repr ss of the assessee at Flat No. 5
est, Mumbai.
the Assessing Officer issued a f
Act on 18/08/2016 clarifying notice u/s 148 of the Act and m
30.08.2016. But no complianc assessee.
essing
Officer again issue ong with a fresh copy of the n nd the matter was fixed fo ut same was also not complied b
, the Assessing Officer further
Rajnish Bharti HUF
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4377/MUM/2023
iance was made of assessee from ain Ambavat &
n their request one attended on ssociates filed a any notice u/s resentative also 06/B Evershine fresh notice u/s with regard to matter was fixed ce was made on ed notice on notice u/s 148
for hearing on by the assessee.
provided a final opportunity on provided by the also on the las
Assessing Office notice also retu remark ‘un-claim
(viii) The Assess cause notice at was e-mailed to the assessee an hearing on 16.1
the part of the and service of th notice u/s 148
matter was time
3.1 In background o issued a final show c hearing on 21.11.20
proposed additions in purchases. As mat passing the assessm letter objecting to th
Officer disposed off th
ITA N

(b) provide an serving upon may be specif and but not ex notice is issue the basis of a under section information w escaped asse year and res
(a);"
14. In the p knowledge of reply to the sa came to be pa has been sen
Assessing Off section 148A specified aut obtained at ev the notice an speed post a sufficient to r the notice at has admitted
15. The next petitioner hav the proceedin
The answer is 16. Further th learned couns facts of the p was given to show cause n
(Annexure P-2
dated 01-4-2
filing reply ch
17. Finding no 6.2.4 The fact the non-servin of the above does not stan
ITA N n opportunity of being heard to the asse him a notice to show cause within such fied in the notice, being not less than sev xceeding thirty days from the date on wh ed, or such time, as may be extended by an application in this behalf, as to why n 148 should not be issued on the which suggests that income chargeable to essment in his case for the relevant ass sults of enquiry conducted, if any, as pe present case, the petitioner was hav f notice on 26-3-2022 and she has not g aid show cause notice. Thus, the impugn assed on the 7th day i.e on 7-4-2022. Th nt at the address given on the PAN Datab fficer initiated the proceedings in accorda
A read with section 149/151. The app thority as per section 151 of Act, 19
very stage. The petitioner chose not to file d hence the notice issued on 20-3-2022
at the address given on the PAN Databa return a finding that the respondents had the correct address. Moreover, petitione that the notice was received on 26-3-202
t question for consideration is that whe ving been served the notice at the correct ngs initiated for reassessment can be q s 'No'.
he case i.e.Jindal Forgings case (supra), sel for the petitioner will not be applicab resent case, as in that case only three d the petitioner to file reply. In the present c notice was issued to the petitioner on 26
2) and on the 7th day itself, the impugne
022 (P-3) was passed. The petitioner in hose to approach this Court.
o merit, the writ petition is dismissed.
t of the case and the grounds of appeal re ng of the notice u/s 148 of the Act is seen decision of the Hon'ble High Court and nd on a legally valid ground. Further re
Rajnish Bharti HUF
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4377/MUM/2023
essee, by time, as ven days hich such y him on a notice basis of o tax has sessment er clause ving the iven any ned order he notice base. The ance with proval of 961 was e reply to 2 through ase was d served er herself
22. ether the address, quashed.
cited by ble to the days time case, the 6-3-2022
ed notice nstead of elating to n in light therefore eliance is also placed o case of PCIT
Appeal No. 8
had followed the notice. An legally served service of noti
6.2 We note that H
Atulbhai Hiralal Sh
Income-tax (2016) the assessee had not was made and Asse basis of remark of po of non-service of t terminated. The SLP been dismissed by th
73 taxmann.com 325
Court in the case o
SCC 647 held that w returned with the available’ or ‘house station’ , then due se also, notice was sen income tax departme party ‘left’ the place, served on the assesse
ITA N on the decision of the Hon'ble Supreme vs. M/s I- Ven Interactive Ltd. Mumbai,
132 of 2019 of SLP (C) No. 3530/2019. the due procedure established by law in nd as discussed above, the notice was val d on the appellant. The ground relatin ice is accordingly dismissed.”
Hon’ble Gujarat High Court i ah v. C.P. Meena, Deputy Co
73 taxmann.com 320 (Guj.) t joined the Postal Department w essing Officer was entitled to ostal department and thus only the notice, the reassessment
P filed against the same by th he Hon’ble Supreme Court as rep
5 (SC). We further note that Ho of Jagdish Singh Vs. Natthu S when a notice is sent by registe postal endorsement that ‘re locked’ or ‘shop closed’ or ‘ad ervice has to be presumed. In t nt at the address provided by ent and the postal department
, therefore, the notice issued i ee
Rajnish Bharti HUF
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4377/MUM/2023
Court in , in Civil
The AO n serving lidly and ng to the in the case of ommissioner of held that since why remark ‘left’
proceed on the y on the ground could not be he assessee has ported in (2016) on’ble Supreme
Singh (1992) 1
ered post and is efused’ or ‘not ddressee not in the instant case the assessee to t endorsed that s deemed to be 6.3 Further, we not of the notice u/s 148
was provided by th
Same was returned
‘unclaimed’. The Ass notices on the e-ma assessee. Thereafter, new address provide duly served before c undisputedly a valid
Ld. counsel for the as of the notice through witness was present of the Income-tax De valid in law. In our o issued for the firs subsequent copy of t address provided b authorized representa of the assessment, a not feel it appropria substituted service challenging validity o
ITA N te that the Assessing Officer has 8 of the Act at another Mumba he authorized representative o d by the postal authorities w sessing Officer also had provide ail ID of the authorized repres the notice u/s 148 of the Act d by the Authorised representa completion of the assessment d service of the notice u/s 148
ssessee raised doubt on the sub h affixture and submitted that while affixing the notice and an epartment had signed as witne opinion, in view of deemed servi t time by the Assessing Of the notice u/s 148 of the Act s by the assessee and on the ative which have been served be amounts to valid service and t ate to comment on the doubts of the notice. Accordingly, of the service of the notice are rej
Rajnish Bharti HUF
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s also sent copy ai address which f the assessee.
ith the remark ed copy of such sentative of the was sent at the ative, which was , which is also of the Act. The bstituted service no independent nother inspector ess which is not ice of the notice fficer and also sent at the new e-mail of the efore completion therefore, we do s raised on the , the grounds ejected.

320 /TR 561 (Supreme Court), CIT Vs Lu ention of the assessee in the said para-No stainable and acceptable.
d it needs to be stated that reopening h oncrete information received not only fro also from Sales Tax Department of Maha
Department is completely different inve herein they have found out that asse he circle of obtaining accommodation b ators. It is not the case that the inve ales Tax Department is wrong. It is also sessee has filed any petition against th ent. As far as the contention of disallow cerned the same is legal under MVAT A ied that the AO has sufficient material o basis of the said material and info u/s 147 has been initiated and notice ued on 22.03.2016. The information and nothing but the concrete evidences on re which the AO has specifically noted tha elieve that income chargeable to tax has for the Asst. year 2009-10 and t u/s 147 has been initiated and notice ued as per Income Tax Act, 1961. It is not lied his mind before recording the rea t also has come to the satisfaction that th o tax has escaped assessment in yo tice issued u/s 148 is not illegal and bad is very clear that the notice issued u/s r Income Tax Act, 1961 and the same i on, the objection raised by you in this r nd hereby rejected. The decision relied o been perused, however, it is noticed ase are different than your case.
Rajnish Bharti HUF
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4377/MUM/2023
ucas TVS d on the o contend e him for of Sales rtment is MVAT Act set off is s hawala evant for No.5 to 22
has been om DGIT, arashtra.
estigative essee is bills from estigative o not the he Sales wance of Act. It is on record ormation, u/s 148
material ecord, on at he has escaped therefore, u/s 148
t only the asons for e income ur case.
d in law.
s 148 is is within regard is upon by that the 4. Reopening justified in vie i) Hon'ble Sup
Taxman 315) accepted u/s The enquiry reassessment reasonable gr the omission established. I ii) Hon'ble Bo of India & An to be valid in the Asstt. CIT right to purch as per the application of the case and ability of cap
Thus, AO was 148. He had a a case of mer iii) Hon'ble B
Media (P) Ltd.
held that wh notice under conclusively assessment, reason to beli s. 147. In the record to rea assessment to was taken conducted se material gath the same ha material to re assessment under-assess has escaped of s. 147 was 4.2 Further, questioned or ITA N g of assessment in the above case is p ew of following decisions:
preme Court in the case of Sri Krishna Pvt
5) has held that even in respect of a s 143(3), proceedings U/s 147 can be at the stage of examining the valid t notice is only to see whether th rounds for the Assessing Officer and not n/ failure and the escapement of in It is necessary to keep this distinction in m mbay High Court in the case of Yuvraj V nr. (2009) 315 ITR 84 has held that reass n this case. While passing the assessme
IT merely noted that the assessee has hase an open plot and computed the tota chart mentioned in the order. There f mind on the part of the Asstt. CIT to the the issue involved. The issue relating to pital gain or casual income was not ad s justified in issuing the impugned notice applied his mind for issuing the notice. It re change of opinion.
Bombay High Court in the case of Mult
. Vs. Union of India & Anr. (2010) 324 /TR en the Court is concerned with a challe s. 148, the issue is not as to whether i demonstrated that the income had but whether as a matter of fact, there ieve to justify recourse to exercise of pow e instant case, the AO has concrete ma asons to believe that the income has o that extent. Recourse to the provisions on the ground that Investigation W earch operation and during the said o ered has been admitted on oath by the p as been established. The, AO did have open the assessment under 5 147. Wher has been made, income chargeable to sed, the law deems that income chargeab assessment. Therefore, recourse to the pr s valid.
the quality of the reason recorded is n r analyzed by the assessee in the guise
Rajnish Bharti HUF
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4377/MUM/2023
open for chal channels. The a judicial revi re-assessmen the following the point at is a. In Chhugm
(SC), which w has held that section 148. I grounds befo
148."
b. In ITO v. S
ITR 597 (SC) issuance of n whether there person could c. Again, in Ra
ITR 34 (SC), t reassessment whether there which the dep
It is evident assessment a the assessme
5. In the ligh objection in r hereby rejec proceedings-in by M/s Jain A 6 In view of th comply with t for hearing undersigned produce the d
6.2.5 Taking u/s 148 of th due procedur order disposin
ITA N

The very juri iction under sec 147 of th llenge by the assessee in the regular a erefore, the assessee's present objection iew of the issue which is yet to hatch thr nt proceedings, cannot be accepted. I may decisions of the Hon. Supreme Court in r ssue as under:
mal Raj Pal v. SP Chaliha &Ors (1971) 79
was decided against the Revenue, the Ap t "AO must give reasons for issuing a noti
In other words, AO must have some pri ore him for taking recourse action unde
Selected Daluv Band Coal Co. (P) Ltd. (19
), the Apex Court observed that at the notice under section 148, the only que e was relevant material, on which a rea have formed the requisite belief.
aymond Woolen Mills Ltd. v. ITO &Ors (19
the Apex Court while refusing to interfere t proceedings, observed "we have only e was prima facie some material on the partment could reopen the case."
t that income of the assessee has and the A. O. was perfectly justified in re ent.
ht of discussion in foregoing paragrap respect of the proceedings-initiated u/s cted and there is no question of nitiated u/s 148. Therefore, the applicat
Ambavat& Associates, CA stands dispose he discussion above, you are hereby requ the proceedings-initiated u/s 147. Your ca on 28.11.2016 at 10.30 A.M. bef and produce the details called for.
details called for as per Annexure to this n into account the fact that the objection he Act were disposed. The AO had follo re as set out in the order of GKN Drivesh ng objections u/s 148 of the Act was als
Rajnish Bharti HUF
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4377/MUM/2023
he Act is appellate n seeking rough the y refer to regard to 9 ITR 603
pex Court ice under ima facie r section 996) 217
stage of estion is asonable
999) 236
with the y to see basis of escaped eopening hs, your s 148 is dropping tion filed ed off uested to ase fixed fore the . Please notice."
ns raised owed the haft. The so sent to the appellant the appellan
143(3) r.w.s 1
of a valid n objections ra relating to the is accordingly
6.3 Further, the Ld followed due proced
(supra), and served assessee. Before us t not issued for dispo removed. The ld coun
Court in the case of 90 (Bom) but facts assessee raised obje objections just befor case, the assessee r limitation for compl objections on same d detailed order, a co preceding paras, h separate order was p merit.
6.4 Further, the ld basis of which reaso before us the ld c
ITA N t by the AO at the last known postal ad t. Therefore, the subsequent assessm
147 of the Act is a valid assessment in pu notice u/s 148 of the Act, after dispo aised by the appellant. Therefore, the e legal validity of the impugned assessme y dismissed.”
d. CIT(A) upheld that the Asses ure as set out in the case of said order at the last known the ld Counsel stated that a sep osing objections and objections nsel relied on decision of Hon’b
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
ddress of ment u/s ursuance sing the e ground ent order sing Officer has f G.K. Drivesaft n address of the parate order was s were casually le Bombay High orted in 296 ITR n that case the AO disposed the But in instant nd of expiry of O disposed the ctions by way of duced by us in ounsel that no s and devoid of material on the rovided. Firstly, any document evidencing that any Secondly, when no re it is the assessee wh
GKN Drishaft (supra obliged to provide m
Before us, the Ld. c arguments that obje opinion, the require objection and wheth subjective issue. The as how the order for reject the contention
No. 3 of the appeal of 7. In ground No.
reassessment as the escaped assessment.
reassessment procee was made for makin has referred to the se of the credit/deposit thus requires verifica assessee relied on th case of PCIT v. Manz
(Civil) Diary No. 458
ITA N y such request was made by eturn of income was filed by the ho has not followed the proced a). In such circumstances, th material relied for reopening t counsel for the assessee furth ections were not disposed off p ement of the law is of the d her it is it is proper or not e Ld. counsel has not been able disposal was not proper. Thus, of the Ld. counsel of the assess f the assessee is accordingly dis
2, the assessee has challenged ere was no reason to believe th
The Ld. counsel for the asses edings, firstly, on the ground ng fishing or a roving inquiry. T entence in the reasons recorded at Rs.2,30,04,247/- remains u ation. In support thereof, the Ld.
e decision of the Hon’ble Supre zil Dinesh Kumar Shah, Specia
862/2018. However, we find th
Rajnish Bharti HUF
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Nos. 3912 & 3941, 4378 &
4377/MUM/2023
y the assessee.
e assessee, then dure provided in he AO was not the assessment.
er repeated the properly. In our disposal of the proper is very to substantiate accordingly, we see. The ground missed.
d validity of the hat income had see assailed the that reopening
The Ld. counsel d ‘that the source unexplained and . counsel for the me Court in the al Leave Petition hat this claim of the assessee of carry been rejected by the L
“6.2.7 The su order of the H relation to t
AABPB6150F case of Rajn above fact is two different the reasons
5826/Mum/2
adjudication b for the impug
ITAT in the a read as they alteration is p
The reasons f the Hon'ble IT same is repro
"An informat regarding bog the assessee believe that in the A. Y.2009
case within th
Act dated on 2
6.2.8 It is in t
AO in the imp reasons recor proceeding u/
AO is reprodu by the AO is mentions the Department purchases by the AO men accounts and making an en deposits. The indicative and verification, a disclosed all ITA N ying out roving/fishing inquiry
Ld. CIT(A) observing as under:
ubmission of the appellant is perused. Th
Hon'ble ITAT in I.T.A. No. 5826/Mum/2
the assessee Rajnish Chimanlal Bha
F-A.Y. 2009-10, while the present appe ish Bharti-HUF-AAEHR6595K-A.Y.-2009
only brought in to just differentiate that assessees. However, it is necessary to recorded for the A.Y. 2009-10 in 2016which has been the subject m before the Hon'ble ITAT with the reason gned A.Y. in the case of assessee. The above order noted that reason to believ y are recorded by the AO, no substit permissible [Hindustan Lever Ltd. 268 I for the recorded by the AO are a part of P
TATin Para 6.2.6 above. However, for br oduced below:
tion received from the office of the D gus claim of expenses of Rs. 6, 16,79, 2
form various parties. I have therefore, r ncome chargeable to tax of Rs.6, 16,79, 2
9-10 has escaped assessment in this as he meaning of the provisions of section 14
27.11.2011. Notice u/s 148 issued"
the light of the above the reasons recorde pugned A.Y. Now this reason is compared rded by the AO in the impugned A.Y. for /s 147 of the Act. The reasons recorded uced above in Para 6.2.2. The reasons detailed one. In Para 1 of the reasons source and basis pf information i.e., S through DGIT (Inv) about the bogus y the assessee. Further, in Para 3 of the ntions the credits/ deposits into variou d summons were issued u/s 131 of the nquiry about the source and genuinenes e AO categorically mentions that the enqu d not exhaustive which require examina and that the assessee has not fully a l the material facts a deeper examin
Rajnish Bharti HUF
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by the AO has he above
2016is in arti-PAN- eal is in 9-10. The they are examine
ITA No.
matter of recorded e Hon'ble ve are to tution or ITR 332].
Para 5 of revity the DGIT(INV)
235/- by reason to 235/- for ssessee's
47 of the ed by the with the initiating d by the recorded s the AO
Sales Tax hawala reasons us bank e Act for ss of the uiry was ation and and truly nation is necessary an conclusion th assessment w
Act. A compar in the impugn by the AO a 5826/Mum/2
made by the A by the DGIT ( that there is a 6.2.9 The abo some of the ju
1. In the case
Vs CIT, [2017
81 (SC), the H
Hon'ble High
"16. The last
(supra), the concept of cha
April 1, 1989
Tax Act, 1961
That question
Court. Far fr view, militate
April, 1989, provided ther that there is e must have a l
17. There is i that income discussed. Th
2. Avirat Sta taxmann.com
(Bombay)/[20
3. PCIT Vs
Courttaxmann purchase by passed on t outside record
ITA N nd only after that the AO came to a hat income of Rs. 195299579/- has which requires issuance of notice u/s 14
rative analysis of the reasons recorded b ned A.Y. under litigation and the reason adjudicated by the Hon'ble ITAT in I.
2016, there is discernible difference an AO i.e., to move beyond the information p
(Inv), to arrive at some sort of primary co an escapement of income.
ove discussion is further analyzed in the udicial rulings mentioned below:
e of Eureka Stock and Share Broking Serv
7] 82 taxmann.com 10 (SC)/[2017] 248
Hon'ble Supreme Court has upheld the ord
Court. The relevant portion is reproduced judgment, in the case of Kelvinator of In question for consideration was whe ange of opinion stood obliterated with eff
9 after substitution of section 147 of the 1 by the Direct Tax Laws (Amendment) A n was answered in the negative by t rom helping the assessee, the judgmen es against him. Their Lordships held, the Assessing Officer has power to re is "tangible material" to come to the co escapement of income from assessment.
live link with the formation of the belief."
in fact tangible material to come to the co escaped assessment which we have here is thus no question of any change of ar Homes Venture (P.) Ltd. Vs ITO, [20
m
60
(Bombay)/[2019]
261
Taxma
019] 411 ITR 321;
Paramount Communication (P.) Ltd.De n.com 409held that Information regardin assessee received by DRI from CCE wh to revenue authorities was 'tangible d' to initiate valid reassessment proceedin
Rajnish Bharti HUF
28
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
primary escaped
48 of the y the AO recorded
T.A. No.
nd effort provided onclusion e light of vices Ltd.
Taxman der of the d below:
ndia Ltd.
ther the ffect from e Income ct, 1987. the Apex t, in our
"Hence, reopen, onclusion
Reasons onclusion already opinion."
019] 102
an 184
elhi High ng bogus hich was material ngs;

Investigation, who in Tax Department, wit reference to the ab assessee, we are of th the Assessing Office information in his po material should be requisite believe that is that the Assessing basis of information relevant period the verification by the A relevant time the As inquiry from the a pending. Thus, conte
7.2 Thirdly, the Ld of reassessment pr material was provided was recorded. In the find that the assesse of the Act nor the not has been placed bef material on the basi contentions of the as ITA N n turn received the information thout independently verifying t bove arguments of the Ld. c he view that while recording rea er has to keep in mind that ossession, is relevant to the ca such that a reasonable per t income escaped. Thus require g Officer has to form a requisi that income escaped assessm ere was no requirement fo
AO from the assessee as under ssessing Officer was not auth assessee unless, assessment entions of the assessee are accor d. counsel for the assessee assa roceedings on the ground th d to the assessee on the basis o e background of the facts menti e has neither complied with the tice u/s 142(1) of the Act and n fore us of making such reques is of which reasons were recor sessee are accordingly rejected.
Rajnish Bharti HUF
30
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
n from the Sales the same. With counsel for the asons to believe, the material or ase in hand and rson can make ment of the law ite belief on the ment and during or independent the law during horized to make proceedings is rdingly rejected.
ailed the validity hat no tangible of which reasons ioned above, we e notice u/s 148
no such evidence st for providing rded. Thus, the 7.3 Further, the Ld information provided in view of the judgm there was no live
Department. In our o
Ld. counsel for the a decision of Hon’bl
Woolen Mills (199
‘sufficiency’ or ‘corre be seen at the stage o was in respect of p purchases and ther relevant to the assess
Hon’ble Supreme Cou
Pvt. Ltd. 291 ITR 500
valid reopening. The under:
16. Section 147 auth reassess income cha for any assessment the phrase reason
Assessing Officer h income had escaped that an income had to mean that the A ITA N d. counsel for the assessee sub d by the Sales Tax Department w ments of the Hon’ble Bombay H link information given by opinion, these observations or a assessee are liable to be rejecte e Supreme Court in the cas
99) 236 ITR 34 wherein it ectness’ of the material for reop of recording reasons to believe. T parties from whom the asses refore, the information of the see and therefore, in view of the urt in the case of Rajesh Jhave
0 reopening on the basis of rele e relevant part of the decision is horises and permits the Assessing Off argeable to tax if he has reason to bel t year has escaped assessment. The to believewould mean cause or jus has cause or justification to know o d assessment, it can be said to have r escaped assessment. The expression
Assessing Officer should have finally
Rajnish Bharti HUF
31
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
bmitted that the was not reliable
High Court and the Sales Tax arguments of the d in view of the se of Raymond t is held that pening need not The information see has shown e material was e decision of the eri Stock Broker evant material is s reproduced as fficer to assess or lieve that income e word reason in stification. If the or suppose that reason to believe n cannot be read ascertained the fact by legal evidenc is to administer the an inbuilt idea of fa
Court in Central Pr
ITR 662], for initiat stood at the relevan that regard is essen is not relevant. In ot reason to believe, b
At the stage of iss was relevant mat formed a requisit prove the escapeme the formation of be subjective satisfactio
8. In ground No. 4
that notice u/s 148 o of the approval of t hearing before us, communicated vide headquarter) of the o the documents filed approval on 14.03.2
2016. Therefore, the that no sanction was he alleged that reas
ITA N ce or conclusion. The function of the A e statute with solicitude for the public airness to taxpayers. As observed by rovinces Manganese Ore Co. Ltd. v.
tion of action under section 147(a) (a nt time) fulfillment of the two requis ntial. At that stage, the final outcome o ther words, at the initiation stage, wh but not the established fact of escape sue of notice, the only question is terial on which a reasonable pers te belief. Whether the materials wo nt is not the concern at that stage. Th elief by the Assessing Officer is with on. ( emphasis supplied externally)
4, the Ld. counsel for the asse of the Act had been issued witho the notice. However during the the Ld. DR filed a copy o e letter dated
17/03/2016
office of the approving authorit before us, the Assessing Offi
2016 which has been granted argument of the Ld. counsel f s obtained is also without any sons recorded are dated 22.03
Rajnish Bharti HUF
32
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
Assessing Officer c exchequer with y the Delhi High
ITO [1991 (191)
(as the provision site conditions in of the proceeding hat is required is ement of income.
s whether there son could have ould conclusively his is so because hin the realm of essee submitted out any mention e course of the of the approval of the ITO( ty. According to ficer applied for on 17th March, for the assessee basis. Further,
3.2016, whereas sanctioned was obta assessment record w bench and the ld AR reasons were recorde by the appropriate au thereafter notice has Officer has only adde in the reasons record the Ld. counsel that r any basis and withou the contention challe accordingly rejected.
9. Now, we come assessee challenging which is worked out issue in dispute are Department through be received bogus bil
Name of the Party
M/s. Appex Steel
M/s. Tara Enterprises
M/s. Shyam Corporar
M/s. Universal Enterp
M/s. G.S. Trading Co
M/s. Shakti Enterpris
M/s. Anikesh Trading
M/s. S. B. Metel Corp
ITA N ained on 17.03.2016. However which was produced by the ld
R was also allowed for inspectio ed prior to 14.03.2016 and appr uthority which was granted on s been issued on 22.03.2016. ed the fact of issue of notice u/
ded on 22.03.2016. Therefore, th reasons were recorded after app ut proper appreciation of the fac enging approval granted u/s 15

e to the ground No. 5 of the g upholding of 12.5% of the bo t to Rs.2,15,36,916/-. The brie that the information received
Investigation Wing, the assesse ls from following parties:

Amount of trans
2008-09
s
2008-09
rion
2008-09
prises
2008-09
.
2008-09
ses
2008-09
g P. Ltd.
2008-09
poration.
2008-09
Rajnish Bharti HUF
33
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
r on verification d DR before the on, we find that roval was sought
17.03.2016 and The Assessing s 148 of the Act he contention of proval is without cts. Accordingly,
51 of the Act are e appeal of the ogus purchases ef facts qua the from Sales Tax ee has shown to saction (Rs.)
21166608/-
15988608/-
17555248/-
14144479/-
9572004/-
11319670/-
9889921/-
649032/-

M/s. Sangura Trading
M/s. Sairam Trading
Corporation
M/s. Mahavir Enterpr
9.1 The assessee f details, and stock r issued notice u/s 1
notices issued remai
Officer asked the verification. But the has also failed in transport receipt, lor production of the par before Sales Tax Aut assessee failed to purchases. According
M/s Vijay Protein
Rs.17,22,95,382/- w undisclosed income the disallowance obse
6.3.2 The app placing relian the appellant transactions, juri ictional on the issu accommodatio
ITA N g P. Ltd.
2008-09
2008-09
rises
Total failed to file copy of the bills, register etc, therefore, the As 33(6) of the Act to the parties ined un-complied and therefore assessee to produce all tho assessee failed in producing s substantiating transport wit rry receipt, octroi receipt. In v rty particularly keeping in view thorities of denying sales to th discharge his burden of sub gly, the assessee applying ratio ns (supra) sustained 12.5%
which was worked out to Rs.2, u/s 69 of the Act. The Ld. CIT erving as under :
pellant assailed the AO and filed detail nce on a number of case laws. The subm t is examined. Regarding the taxability the reliance is placed on the decis
Mumbai High Court/ITAT in the followin ue of estimation of profits where on entries of purchases had been taken:
Rajnish Bharti HUF
34
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
25451306/-
9020206/-
37538548/-
172295332/-
, transportation ssessing Officer s. However, the e, the Assessing ose parties for o. The assessee th the help of iew of the non- their statement he assessee, the bstantiating the o in the case of purchases of ,13,66,916/- as T(A) also upheld led reply mission of of such sions of ng cases e bogus i) In a recent j
PCIT. Mumba
1026 of 2018
"5. An appeal who concurre parties in que of such purch that only the disputed pu estimated at addition to th
6. An appea assessee as virtue of the o is impugned view of the C bogus and a sustain the ad disputed purc
8 dated 04.05.2023 had held as l was preferred before the CIT(A) by the a ed with the A.O. that purchases from estion were bogus but held that the entire hases could not be added to the total inc profit element embedded and suppresse rchases be assessed to income, w t 12.5% The CIT(A) accordingly retai e extent of 12.5% while deleting the rest.
al was preferred before the ITAT both also the revenue, which was finally de order impugned dated 20th January, 201
in the present appeal. The Tribunal up
CIT(A) to treat the purchases from ten pa lso upheld the view expressed by the C ddition to the extent of 12.5% of the amou chases relying upon the decision of Guja case of CIT VS. Bholanath Poly Fab Pvt. Lt olving a similar issue, even this Court in No. 398 of 2018 decided on 18th July, 20
e appeal filed by the revenue on the gro ount of purchases was to be held as non not be possible to justify as to how the ed to the assessee for execution by th
Agencies, could be completed e present case the Appellant is a contrac otted a subcontract for carrying out civil ldings repairs for which various types of e stated to have been purchased from luding the ten suppliers, who are alleged ng accommodation entries. It is not denied d had been completed for the concerned d have been otherwise impossible, if th ade by the Appellant were to be held
Rajnish Bharti HUF
35
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
e case of 1016 &
assessee, the ten e amount come and ed in the which he ined the h by the cided by 7, which pheld the arties as CIT(A) to unt of the arat High td.
n Income
022, had und that n-genuine he semi- ctor, who works of f building m several d to have d that the d agency, he entire as non-

In our opinion interference.
present appea ii) The Mumb
Environmenta
(Bombay)date
"I Section 69
expenditure (
Assessing Of bogus purcha
(Appeals) dire of bogus pur purchases to Commissione
Court that bo totality- It wa by departmen bogus purcha purchases sh could not be effected by Whether
Tri
Commissione
(iii) The Mum
Builders
[20
18.07.2022 h
"Section 68
genuine purch involved in ex construction asked assess to produce tw treated purch non-genuine assessee-Com were not in d shown to hav on such purc restricted add purchases- Tr
It was noted genuine purch to how work
ITA N n the order passed by the Tribunal war
No substantial questions of law arise al."
bai High Court in the case of PCIT vs al Engineering Ltd./2022] 141 taxmann.
ed 10.06.2022 had held as under:
9C of the Income-tax Act, 1961- Une
(Bogus purchases) - Assessment year fficer treated purchases made by asse ases and disallowed in totality Comm ected Assessing Officer to disallow 12.5
rchases and to add 12.5 per cent of am income of assessee - Tribunal upheld r (Appeals) - Revenue contended befo gus purchases ought to have been disal as noted that if factum of sales had been nt then even if it was established that th ases, it was not necessary that entire am hould be added to income of assessee a sale without purchase -In instant ca assessee had been accepted by dep ibunal was right in upholding v r (Appeals) - Held, yes [Para 41"
mbai High Court in the case of PCIT
023]
146
taxmann.com
447
(Bomba had held as under of the Income-tax Act, 1961-Cash cred hases) - Assessment year 2010-11-Asses xecution of civil works- It had shown purc material from twelve parties-Assessing see to produce twelve parties - As assess welve parties for verification. Assessing hase bills as bogus and held entire purch purchases and added amount to in mmissioner (Appeals) held that purchase dispute but parties from whom purchas ve been made were disputed only profit chases to be considered for addition H dition by estimating profit of 12.5 per cen ribunal upheld order of Commissioner (Ap that if entire purchases were to be held hases then it would not be possible to ju ks allotted to assessee for execution
Rajnish Bharti HUF
36
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
rrants no e in the Batliboi com 245
explained
2011-12
essee us missioner per cent mount of view of ore High llowed in accepted ere were mount of as there ase sales partment- view of vs Ram ay)dated dit (non- ssee was chases of g Officer see failed g Officer hases as ncome of es per se ses were t element
He, thus, t on total
Appeals) - d as non- ustify as by semi

Government passed by interference -
(iv) The ITAT, and Constru
(Mumbai - Trib
"Section 69C expenditure (B
Whether whe
100 per cen justified by produce sup assessee from market gave tax at expens
Commissione disallowance disallowance yes (Para 4J"s
6.3.3 The sub of the above disallowing 1
non-complian
Tax Departme and as per la upheld. The G
9.2 We have heard the relevant materia support of purchase filed. As the asses accounts, the onus purchases are genu assessee in dischargi order of the Ld. CIT
ITA N

Agencies could be completed-Whethe
Tribunal was legally valid warran
Held, yes [Paras 12 and 13]"
, Mumbai in the case DCIT vs DBM Geo uction (P.) Ltd. [2022] 136 taxmann.c b.) dated25.03.2022 had held as under:
C of the Income-tax Act, 1961 - Une
(Bogus purchases) - Assessment year 2
ere assessee's sales figures were not nt disallowance for bogus purchases drawing adverse inference on his ina ppliers-Held, yes-Purchases were m m grey market -Making purchases throu assessee savings on account of non-pay ses of exchequer Whether in said circum r (Appeals) was justified in deleting 100
of purchases by Assessing Officer and to 12.5 per cent out of bogus purchases s bmission of the appellant is examined in e cited judicial decisions. The AO a 2.5% of the purchases being bogus in vie ce e and no-genuinity and the report of t ent and the Investigation Wing report is j aw accordingly the addition of Rs. 21536
Ground of Appeal is dismissed.”
rival submissions of the parti als on record. Before us, also es including transportation of see has shown purchases in s is on the assessee to su uine. In view of failure on t ing its onus, we do not find any T(A) on the issue in dispute. A Rajnish Bharti HUF
37
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
er order nting no otechnics com 345
explained
012-13 - doubted, was not ability to made by ugh grey yment of mstances, per cent d limiting s - Held, the light action of ew of the the Sales judicious
6916/- is ies and perused no evidence in the goods was n its books of ubstantiate that the part of the y infirmity in the Accordingly, we uphold the same. Th accordingly dismissed
10. The ground No credit/deposits of R
Assessing Officer as restricted addition of in the case of Shri Ra of the Ld. CIT(A) is re
“6.4 The app
AO in making of the assess bank accoun however in th balance of Rs filed the copy submitted thevariousban bank to o arbitraryandp out of the wi transactions anybusinesst ned.The appe relied on the j of PCIT-14 v
Where the Ho
7)asunder:
"20. We are in In a case of attracted. Sec found credited offers no exp the explanatio the Assessing so credited m assessee of ITA N he ground No. 5 of the appeal of d.
o. 6 of the appeal of the ass
Rs.10,55,84,256/- which were s unexplained. However, the f 2% of the such deposits follow ajnish Bharati (Individual). The eproduced as under:
ellant in its ground of appeal no. 6 assa g addition of Rs. 105584256/-. The AO i ment order noted that assessee is having nts. The AO issued notices to the a he face of non-compliance the AO added s. 105584256/- u/s 69A of the Act. The a y of the bank statement and in its sub that credits found nkaccountsoftheappellantare transfer fr other and addition on this acco perverse, asthe credits in one bank accou ithdrawals from anotherbank account an did not c transactionsonwhichanyincomecouldhave ellant in its submission for A.Y. 2010
judgment of Hon'ble Bombay High Cour s Alag Securities Pvt Ltd. (ITA 1512 o on'ble High Court has held (attachedas A n agreement with the view taken by the T this nature Section 68 of the Act would ction 68 would come in to play when any d in the books of the assessee and the a planation about the nature andsource th on offered by the assessee is not in the op g Officer satisfactory. In such a situation may be charged to income tax as the incom the relevant previous year. But that is Rajnish Bharti HUF
38
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
f the assessee is sessee relate to e held by the Ld. CIT(A) has wing the finding relevant finding ailed the n Para 5
g several assessee, the total appellant bmission in from one ount is unt were nd these constitute ebeenear
0-11 has rt in case of 2017), nnexure-
Tribunal.
d not be y sum is assessee hereof or opinion of the sum me of the s not the position here.
which has be affirmed by t centered arou cash amount assessee for deposits, the by the asse customers i.e.
assessment o
21. Coming t already held to beare as Tribunal acce disclosed by t and it cannot at in an arbit error or in underSection2
The appellan submitted tha where the dep the customers addition in e
Further, in ca
Rajnish Bhar addition has accommodatio
After conside u/s 69A of th
Rs. 1055842
2008-09 in ca
Ground of App
10.1 The ground No connected to the abo the rival submission materials on record.
Assessing Officer (AO accounts maintained
ITA N

It has been the consistent stand of the a een accepted by the FirstAppellate Autho the Tribunal that the business of the a und customers / beneficiaries making de ts and in lieu thereof taking cheques f amounts slightly lesser than the qua difference representing the commission essee. The cash amounts deposited
., the beneficiaries had been accounted f orders of these to the percentage of commission, Tribu
0.1% commission in similar type of tran on able percentage of commission. T epted the percentage of commission a the assessee it self. This finding is aplaus t be said that the rate of commission was trary manner. The same does not suffer f nfirmity to warrant interference, th
260-AoftheAct."
t further in its submission for the A.Y.
at that in the present case, the facts are i posits of fundshave been withdrawn and s, whose cheques are discounted. Theref excess of 0.05% of the turnover is unj ase of individual assessment of the Ka rti of the appellant HUF in AY 2008
been made byconsidering 2% commis on entries provided by theKarta of the ap ring the factual matrix of the case, the he Act is restricted to 2% of the total ad
256/- following the addition made in ase of the Karta of the Rainish Bharti-H peal is partly allowed.”
o. 1 of the appeal of the R ove ground of the assessee. We h ns of both parties and examin
. The brief facts of the dispu
O) observed substantial transa d with HDFC Bank, DSB Bank
Rajnish Bharti HUF
39
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
assessee ority and assessee eposits in from the antum of realized by the for in the unal had nsactions
Therefore, at 0.15%
sible one s arrived from any hat too,
2010-11
identical, d paid to fore, any njustified.
arta, Mr.
8-09, the ssion on appellant.
addition ddition of the A.Y.
HUF. The Revenue is also have considered ned the relevant te are that the actions in bank k, and the State

Bank of India. Upon noted that the balan reflected. Consequen source of the depo
However, the assesse
The Learned Commis on the findings of Rajnish Bharati (Ind assessee was engage was observed that th where funds were w provided cheques for commission was su assessee has not pro in the business of a Furthermore, the as claiming to have con the assessee simulta accounts were related claim, the assessee party to whom acco
Since the assessee required under the p accounts are liable to ITA N verifying the assessee’s balanc nces of HDFC Bank and DSB ntly, the AO asked the assessee osits/credit entries in these b ee failed to provide a satisfacto ssioner of Income Tax (Appeals the First Appellate Authority dividual), where it was establ ed in accommodation entries.
he assessee was involved in cheq withdrawn in cash and paid to r discounting. Accordingly, an ustained. However, in the pre vided any evidence to substanti accommodation entries or cheq ssessee’s arguments are contr nducted actual business concern aneously asserts that the depos d to accommodation entries. To was required to submit affida ommodation entries were alle failed to discharge the burd provisions of the Act, the depos o be assessed as undisclosed in Rajnish Bharti HUF
40
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
ce sheet, the AO
Bank were not e to explain the bank accounts.
ory explanation.
s) [CIT(A)] relied in the case of lished that the In that case, it que discounting, customers who addition of 2%
esent case, the iate engagement que discounting.
radictory—while ning purchases, sits in the bank support such a avits from each egedly provided.
den of proof as sits in the bank ncome under the Act. In view of the ab findings of the Learne entire disallowance appeal of assessee is appeal of the Revenu
11. In ground No.
appeal and granting seeking stay on the d application before th
We don’t know wheth assessee, but it is cle before us and there infructuous. The gro while disposing the g well as ground on m therefore, same is dis
12. The ground ra assessee and the Rev
Assessee’s Ground
1. The Learne has erred in passed by the r.w.s. 147 w
Ld. CITA has Ld. A.O. had ITA N bove facts and circumstances, w ed CIT(A) on the disputed issue of ₹10,55,84,256/-. The groun accordingly dismissed whereas e is allowed.
7, the assessee has prayed fo g stay against the recovery o demand, the assessee has to fi he ITAT in terms of section 254
her any such application has b ear that no stay petition of asse efore, this ground of appeal i und No. 7 (ii) and 7(iii) stands grounds challenging validity of r merit. The ground No. 8 is ge smissed as infructuous.
aised in assessment year 20
venue are reproduced as under:
ed Commissioner of Income Tax Appeal (L n upholding the impugned assessmen e Learned Assessing Officer (Ld. A.O.) u/
ithout issuing/ serving any notice u/s 1
further erred in not considering the fact failed to provide any proof of issue/ s
Rajnish Bharti HUF
41
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
we set aside the and uphold the nd No. 6 of the the ground 1 of or admitting the of demand. For le a proper stay
4(2) of the Act. .
been filed by the essee was listed is dismissed as already covered reassessment as neral in nature
010-11 by the Ld. CITA) nt order
/s 143(3)
148. The t that the service of notice u/s 14
appellant.
2. Without pr
CITA has fur proceedings w the provisions believe that th
3. Without pre the reassessm had failed to Court of India with the objec proceedings examination/
provided
4. The impug limitation as n accordingly n impugned as juri iction in 5. On the fac
Ld. CITA has of bank depo bank account and credits in transfer from were not ind income due to 5. The appe enough to: i.
recovery of d all illegal add justice
Revenue’s Ground
1. " Whether o and in law, th made u/s. 69
the bogus p purchases to ITA N

48, despite specific request being made f rejudice to the issue of notice u/s 148, rther failed to appreciate that the reass were null and void as the Ld. A.O. had s of sec 147 without there being any r he income had escaped assessment.
ejudice, the Ld. CITA has failed to apprec ment proceedings were bad in law as the follow the procedure laid down by the a in case of GKN Drive Shaft as he had n ctions raised by the appellant against re because no inspection of documents cross examination of suspicious part gned assessment order is barred by the notice in this case was never served u/s otice issued u/s 142(1) was time barred.
ssessment order has been passed n law.
cts, in the circumstances of the case and erred in upholding the disallowance of osits under the pretext of unexplained c ts without considering the fact that the n the said bank accounts had appeared m another bank account of the appellant, ependent credits and accordingly there o these credits.
llant therefore prays your honour to Admit the appeal and grant stay aga emand, ii. Set aside the order of A.O., ii ditions and disallowances made by A.O., on the facts and in the circumstances of he Ld.CIT(A) has erred in restricting the 9C of Rs. 1,32,93,190/- from 100% to purchases, even after considering th be bogus."
Rajnish Bharti HUF
42
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
from the , the Ld.
sessment invoked reason to ciate that Ld. A.O.
Supreme not dealt e-opening and/ or ties was e Law of 148 and Also the without d in law, addition credits in deposits due to a so they was no be kind ainst the ii. Delete iv. Grant the case addition
12.5% of he said

the assessee could not furnish any bills v yments, transportation details, stock regi f his claim. The AR of the assessee onl oks has been impounded by the Sa and no bills are available with the a going through the Audit Report the aud mentioned that all the books of acco n the computer system and the same a rchaser Register, Ledger, Cash Book, nk Book. It is pertinent to mention here tha ng order of the Sales Tax Department, t ent has impounded only Sales Invoice voice File. Since the books of accoun on the computer system, the assess be produced the same for verification, w ne purposely. The assessee only stated not having any transactions wi n Enterprises. In this regard, the asses roduce copies of VAT returns filed b e assessee could not produce the copy fore, a letter was issued to Sales Tax Dep xure J1 & J2 was obtained. The same w the assessee wherein the Name
Rajnish Bharti HUF
44
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
essing Officer is tains the us biller, s of the assessee ase bills mentioned ings, the plain the received
Amount (Rs.)
28,14,269
72,89,289
31,89,632
1,32,93,190
vouchers, ister, etc.
ly stated ales Tax assessee.
ditor has ount are are Sales
Journal at as per the Sales
File and nts were see was which has that the ith
M/s see was by them.
y of VAT partment was also of M/s.

Yashudhasan taken the ple to M/s Univ
Enterprises. H produced by Therefore, th considered as the assessee
Enterprises. E pertains to M assessee is u their claim.
4.3. It needs
Hawala Oper accepted fact accounts in o sales are also 4.4. Further, were declare notices serve
Accordingly,
14322017 an was asked to the purchases inability to p submission of unable to pro has merely s parties for ve above said p authorities in from their end remained un single party f also deputed
Inspector rep given address
4.5 The expla the same is explanation o could furnish establish one payments ma material is re
ITA N n Enterprises was duly reflected. The a ea that the transactions Rs. 72,89,289/- versal Enterprises and not M/s. Yashu
However, no documentary evidences ha the assessee in support of their co he plea taken by the assessee ca s the Annexure J1 also establishes the f has made transactions with M/s Yashu
Even if it is considered that the said pu
M/s Universal Enterprises, in that case a unable to produce any evidences in su to be stated that assessee obtained entr rators to the tune of Rs. 1,32,93,190/-. I ts that purchases are shown in the b order to support the sales, so as to exp o from genuine source notices u/s 133(6) were issued to partie ed as hawala traders/bogus parties.
ed have remained to be complied t vide order sheet noting dated 06. nd order sheet notings dtd. 14.12.2017 a o produce the parties for verification fro s were made. In response, assessee sho produce the alleged parties. The abo f the assessee clearly shows that the ass oduce the parties for verification. The a stated that it is not possible to produ erification. It is a fact that notices issue parties has been returned back by th cases and in other cases there is no com d. In short all the notices issued u/s 13
nattended and assessee has failed to for verification. Further, the Ward Inspec d to make inquiries in these cases, th orted that no such parties are availabl ses. Ward Inspectors report is on record.
anation of the assessee has been conside s found to be untenable. On perusal of the assessee, it is noticed that the a only ledger account. The assessee has e to one co relation with regard to purch ade to them. Assessee tried to state ceived and sold by it, the same was with Rajnish Bharti HUF
45
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
assessee pertains udhasan ave been ntention.
nnot be fact that udhasan urchases also, the upport of ries from It is well books of lain that es which All the till date.
12.2017, assessee m whom owed his ove said sessee is assessee ce these ed to the he postal mpliance
33(6) are produce ctor was he Ward e on the ered and l of the assessee failed to hase and that the hout any supporting e provided to th purchases an submitted tha has defaulted and were incl
4.6 The purch genuine in vi confessed bef business of is The ledger ac payment ma conclusive ev
The Sales Ta respect of the 4.7 It may be any third pa purchases. T the seller and and again. Th seller acquire same detail remained non
4.8 The asse aforesaid pu failed to prod repeated opp receipts or oct have been su admitted bef issued only a unable to prod before sales t
4.9 The onus deduction for computing its of Hon'ble Gu
Vilas Hotel (1
& Silk Mills operative Cot
(1993) 109 ITR
ITA N evidences. Even the banks statemen he assessee still he was unable to corre nd payments made to them. The asses at for the Sales Tax purpose all the pers d in payment of VAT were treated as d luded in the list of entry providers.
hase made by the assessee cannot be tr iew of the fact that the concerned part fore the Sales Tax Authorities that they a ssuing bills without actually selling any m ccount is only a self made evidence. The d ade by account payee cheque is also vidence to prove the genuineness of tran ax Department has displayed all the se parties on their website.
e noted here that the assessee has not fu arty evidence to prove the genuineness
The assessee was specifically asked to d prove the genuineness of the transactio he assessee also failed to establish that ed the material which was supplied to was also called for u/s 133(6) but th n-complied and the letters came back unse essee has failed to prove the genuinenes urchases, has failed to produce the s duce the brokers/third party evidence in ortunities granted. No transport receipts troi receipts, delivery challans, in and ou ubmitted. Further these hawala parties h fore the Sales Tax authorities that th accommodation bills. At this stage, the ass duce the suppliers to refute their admissi tax authorities s lies on the assessee to establish any c r expenditure which is claimed as dedu s taxable income. Reliance is placed on j ujarat High Court reported in CIT vs.
1987) 164 ITR 102 (Guj), CIT vs. Navasa
Ltd. (1982) 135 ITR 546 (Guj) and Ka tton Sales Ginning & Pressing Society
TR 17 (Guj).
Rajnish Bharti HUF
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Nos. 3912 & 3941, 4378 &
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nts were elate the ssee also sons who efaulters reated as ties have are in the material.
details of not an nsaction.
data in furnished s of the produce on again how the o it. The he same erved ss of the suppliers, n spite of s or lorry t register have also hey have sessee is ion made claim for uction in judgment
Chandra ari Cotton arjan Co- vs. CIT

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

////

ITA N both the appeals of the assesse he Revenue are allowed.
nced in the open Court on 30
- AR SINGH)
(OM PRAK
MEMBER
ACCOUNTA ded to :

BY ORDER

(Assistant Re

ITAT, Mu

Rajnish Bharti HUF
54
Nos. 3912 & 3941, 4378 &
4377/MUM/2023
e are dismissed
/01/2025. d/-
KASH KANT)
ANT MEMBER
R, gistrar) umbai