TaxTMI 
TaxTMI 
TaxTMI 
2015 (6) TMI 1094
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....ound that the assessment was completed within twenty one months i.e. before 31-12-2009. 2. The Id CIT(A) has erred in confirming the addition of Rs. 1,04,16,233/- as bogus purchases from the following five parties as per Para 6 to 11 of the appeal order on the finding that the appellant has not discharged the onus of proving the purchases by furnishing half baked, unreliable, unverifiable papers in support:- (1) Jolex Traders Rs. 24,94,120/- (2) Umiya Steel Traders Rs. 19,69,268/- (3) Rushi Enterprise Rs. 22,32,310/- (4) Maruti Traders Rs. 17,41,950/- (5) Mahakali Steel Corporation Rs. 19,78,585/- Total Rs. 1,04,16,233/- 2.1 The appellant submits that the Id C1T(A) has erred in not appreciating objectively the grounds of appeal, and written submissions, evidences and citations filed with Id CIT(A) wherein the appellant had explained that he had discharged the onus of proving the genuineness of purchases. 3. The Id C1T(A) has erred in ignoring the specific grounds of appeal Nos. (XI) to (XIII) of 2.3. and ground No.2.4 which reflect the trading result after addition of Rs. 1,04,16,233/-which is abnormal and unjustified and not real and as such not permissib....
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....tion business of Rs. 1,86,50,000/- declaring net profit of Rs. 8,97,380/- which works out to 8.49% as against 8% net profit on receipts as per section 44AD applicable to construction business. In addition the assessee submits that the addition of alleged bogus purchases of Rs. 1,04,16,233/- will result in net profit at 64% which is not real. He further submitted that the GP works out to 10.34% i.e. of Rs. 19,29,239/- on the receipts of Rs. 1,86,50,000/- as noted by the AO. If the alleged bogus purchases of Rs. 1,04,16,233/- are added to GP, the GP will work out to 66% which does not reflect the real ratio of GP in construction business. 3.4. On the contrary, the ld.Sr.DR supported the orders of the authorities below and submitted that the AO made addition on the basis that the assessee failed to establish the purchases from the concerned parties with corroborative evidences in spite of various opportunities given to the assessee. He submitted that the AO has also observed that the assessee has not maintained any corroborative details regarding purchases and consumption of various items used for construction. Under these facts, disallowance of expenditure is justified. 4. We have ....
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....se they know that the creditors are bogus. (xiv) The assessee has completed the project during the year under consideration and the assessee has sufficient fund to pay the creditors but did not pay the same which prove that the creditors are bogus. (xv) The assessee also failed to furnish the details of so called goods purchased from these parties. 4.12. The onus is totally on the assessee to prove that any expenditure incurred by it was wholly and exclusively for the purpose of business. In the present case, the assessee has failed to produce the alleged creditors and the existence of these suppliers is very much in doubt. In fact no evidence whatsoever kind has been furnished by the assessee to discharge the onus that lies on it. However, instead of bringing any material evidence on record, the assessee merely made the contentions as quoted above. The assessee has also relied on the decision in the case of Vijay Proteins. However, the facts of the present case are different. 4.13. In this connection, reliance is also placed on the decision of ITAT Bombay Bench 'B' (ITA No.614/Bom/87 A.Y. 1983-84) in the case of M/s.Mont Blane Properties and Industries Pvt.Ltd., wherein th....
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....parties:- 1. Jotex Traders Rs.24,94,120/- 2. Umiya Steel Traders Rs.19,69,268/- 3. Rushi Enterprise Rs.22,32,310/- 4. Maruti Traders Rs.17,41,950/- 5. Mahakali Steel Corporation Rs.19,78,585/- The total purchases made from these parties is amounting to Rs. 1,04,16,233/-. The AO observed that the assessee did not maintain quantitative details regarding purchases and consumption of various items used for construction. The AO has also observed that in respect of Jolex Traders, the summon issued u/s.133(6) of the Act was returned by the postal authorities with remarks "left". The assessee could not furnish correct/changed address of the party or could not produce the party before the AO. Similarly, in the case of Umiya Steel Traders, summon was issued u/s.133(6) of the Act on 11/09/2009 which was returned by the postal authorities with remarks "left". In the case of Rushi Enterprise also, the postal authorities returned the summon with remarks "left". Further, in the case of Maruti Traders and Mahakali Steel Corporation, requisite details as sought were not furnished. The AO also observed that there were certain discrepancies with regard to the information submitted ....
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....peal:- 1. The CIT(Appeals) erred in upholding the levy of penalty u/s.271(1)(c) of Rs. 35,96,103/-. 2. The CIT(Appeals) failed to appreciate the submissions made before him and in the process erred in upholding the penalty u/s.271(1)(c). The appellant reserves its right to add, amend, alter or modify any of the grounds stated hereinabove either before or at the time of hearing. 8.1. Brief facts of the case are that the AO while framing the assessment vide order dated 24/12/2009 made disallowance of Rs. 1,04,16,233/- on account of bogus purchases and initiated penalty proceedings. Subsequently, AO levied a penalty of Rs. 35,06,103/- u/s.271(1)(c) of the Act. Against the said assessment order, assessee filed an appeal before the ld.CIT(A), who after considering the submissions, dismissed the appeal. Now, the assessee is further in appeal before this Tribunal. 8.2. The ld.counsel for the assessee submitted that the ld.CIT(A) was not justified in confirming the penalty made by the AO. He submitted that the penalty has been levied on the ground that the ld.CIT(A) has confirmed the bogus purchases. He further submitted that before the ld.CIT(A) one of the grounds was that the ass....
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....2008 with retrospect effect from 1.4.1989, if an order of assessment contains direction for initiating of penalty proceedings under clause (c) of Sub-section (1) then such an order of assessment shall be deemed to constitute satisfaction of AO for initiation of penalty. In the present case, such directions have been given by the AO in the penalty order and there is no default on this count." 9.1. We find that the assessee has placed on record letter(s) dated 22/12/2009 addressed to ITO with account of Rushi Enterprises with enclosures, letter dated 12/09/2009 addressed to ITO from Jolex Traders with enclosures, letter dated 21/11/2009 addressed to ITO from Umiya Steel Traders with enclosures, letter dated 167/11/2009 addressed to ITO from Maruti Traders with enclosures and letter dated 21/11/2009 addressed to ITO from Mahakali Steel Corporation with enclosures. In the letter dated 12/09/2009 purportedly to have been given the details of M/s.Ruchi Developers by Jolex Traders. PAN is also written in the case of Umiya Traders. Similarly, in the case of Maruti Traders PAN was written. The assessee has also placed on record the confirmations by the concerned parties. The AO made additi....
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.... is failure by the assessee to give an explanation. However, the addition made on this count automatically cannot justify the penalty levied u/s 271(1)(c). Hon'ble High Court further held that for levy of penalty u/s 271(1)(c) two factors must co-exist (i) there must be some material or circumstances leading to the reasonable conclusion that the amount does represent the assessee's income. It is not enough for the purpose of penalty that the amount has been assessed as income and (ii) the circumstances must show that there was animus, i.e. conscious concealment or act of furnishing of inaccurate particulars on the part of the assessee. Explanation 1 to section 271(1)(c) has no bearing on factor no.1 but has a bearing only on factor no.2. The explanation does not make the assessment order conclusive evidence that the amount assessed was in fact the income of the assessee. No penalty can be imposed if the facts and circumstances are equally consistent with the hypothesis that the amount does not represent concealed income with the hypothesis that it does. If the assessee gives an explanation which is unproved but not disproved i.e. it is not accepted but circumstances do not ....