ITO 21 (2)(5), MUMBAI vs. PRASAD ENGINEERING WORKS, MUMBAI

Per Rajesh Kumar, Accountant Member:

2 & 5902/M/2018 M/s. Prasad Engineering Works brought forward losses to the extent of profit which was processed under section 143(3). Thereafter, AO received information from DGIT (Inv.) vide letter dated 01.01.2013 that the assessee is beneficiary of hawala accommodation entries which came to earth following investigation by the Sales Tax investigation, Government of Maharashtra and assessee’s name was found to be appeared in the list of beneficiaries. Accordingly, the case of the assessee was reopened under section 147 of the Act after recording reasons to believe u/s 148(2) of the Act. During the course of assessment proceedings a detailed questionnaire was issued which was responded by the assessee and the reply of the assessee is reproduced in page 2 & 3 of the assessment order. The AO found that the assessee received accommodation entries from four parties as listed in page No.1 of the assessment order from whom the aggregate purchase of Rs.4,21,304/- were made. In order to verify the genuineness of the purchases, the AO issued notices under section 133(6) of the Act to the suppliers. However, only one party appearing at sl. no.1 responded and the notices were received back unserved in the case of remaining parties. Accordingly, the AO came to the conclusion that all these purchases were bogus as the same could not be verified and added the same under section 69C to the income of the assessee by framing assessment under section 143(3) read with section 147 vide order dated 28.02.2014.