TaxTMI 
TaxTMI 
TaxTMI 
2016 (12) TMI 493
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....HE SALES TAX DEPARTMENT WHICH WAS BEYOND THE CONTROL OF ASSESSEE. THERE IS NO CLINCHING EVIDENCE AS REGARDS TO THE CONCEALMENT. 2. AFTER A LAPSE OF PERIOD OVER A TIME WHEN SUPPLIER WERE DECLARED HAWAL TRADERS ASSESSEE EXPRESSED INABILITY TO PRODUCE THE PARTIES FOR CROSS-EXAMINATION. IT IS TO BE VIEWED IN THE CONTEXT THAT THE PARTIES WERE NOT DIRECTLY KNOWN TO THE ASSESSEE. IN THE CONTEXT OF THE PROVISIONS OF SECTION 68 OF THE ACT, IT WOULD NOT BE OUT OF PLACE TO MENTION THAT ONE HAS TO KEEP IN MIND THE LEGAL MAXIM; "LEX NON COGIT AD IMPOSSIBILlA" (WHICH MEANS THE LAW DOES NOT COMPEL A MAN TO DO WHICH HE CANNOT POSSIBLY PERFORM). EXPERIENCING THESE DIFFICULTIES THE ASSESSEE SURRENDERED THE AMOUNT FOR TAXATION. AS SAID IN THE PETITION, THE PURPOSE WAS TO BUY PEACE AND AVOID LITIGATION THE ASSESSING OFFICER DID NOT RECORD ANY FINDING THAT THE EXPLANATION OFFERED BY THE ASSESSEE WAS FALSE AND THE BONA FIDE WAS NOT PROVED. AS SUCH, THE CONDITIONS PRECEDENT FOR INVOKING EXPLANATION 1 TO SECTION 271(l)(C) OF THE ACT DID NOT EXIST IN THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. ONCE IT IS HELD THAT THE CASE OF THE ASSESSEE FALLS BEYOND THE KEN OF EXPLANATION 1 TO SECTION 271(l}(C), T....
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....oceedings issued notices u/s 133(6) of the Act to the above parties seeking details of the transaction done by the parties with the assessee for the period from 01-04-2009 to 31-03- 2010 alongwith copy of ledger, bank statement, balance sheet with schedules and acknowledgment of income-tax return for assessment year 2010-11 , but the notices returned back with the remark 'left addresses'. The assessee was confronted with the same and accordingly the assessee submitted new addresses of the parties and again notices were issued by the AO u/s 133(6) of the Act to these parties on new address , which again returned back with the remarks 'non-known/not claimed'. The A.O. asked the assessee to produce the these parties and justify the expenditure for purchases from these parties amounting to Rs. 25,98,278/-, but the assessee neither produced the parties nor furnished any documentary evidences to establish the genuineness of the purchases from above three parties. The A.O. observed that the assessee has failed to establish that the three parties namely M/s Arihant Traders, M/s Adinath Trading Co. and M/s. Harsh Corporation are in existence and that the purchases made from them are genuine....
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....e and as the parties from whom purchases were made were declared hawala dealers by sales tax department and thereafter not traceabe, the assessee expressed its inability to produce them . It was submitted that the conditions precedent for invoking Explanation 1 to section 271(1)(c) of the Act did not exist in the facts and circumstances of the present case. Thus, the assessee prayed that the penalty levied should be set aside and relief may be granted. The assessee relied upon decision in the case of K.P.Madhusudhanan v. CIT (2001) 251 ITR 99(SC) and also in the case of CIT v. Suresh Chandra Mittal (2001) 251 ITR 9(SC). The ld. CIT(A) observed that the assessment was completed u/s 143(3) of the Act wherein the AO disallowed an amount of Rs. 25,98,278/- treating expenditure on purchase of spare parts as bogus/non genuine against which the assessee did not file appeal before the CIT(A) and therefore such order passed by the AO stands final on merits as far as quantum additions were concerned. The Revenue disallowed the expenses based upon the information/material supplied by DGIT (Inv.) Mumbai and held that the assessee had only taken accommodation entries. The AO relied on the info....
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....ggrieved by the appellate order dated 11.01.2016 passed by the ld. CIT(A), the assessee is in appeal before the Tribunal. 7. The ld. Counsel for the assessee submitted that the assessee is engaged in the business of renting of Boom and Scissor Lifts which are used in the infrastructure projects. The assessee purchased the spare parts for use in the crane which is for the purposes of his business. The said expenses of Rs. 25,98,278/- was disallowed by the A.O. on the ground that these were bogus purchases made from hawala dealers. It was the say of learned counsel for the assessee that AO has alleged that no supply of material was made by the supplier and only accommodation bills were submitted. The entire purchases were added by the A.O. during the assessment proceedings which has not been challenged by the assessee by filing first appeal before the ld. CIT(A) in order to buy peace and avoid protracted litigation. Thus, it was submitted bu learned counsel for the assessee that the quantum assessment was accepted by the assessee and no appeal was filed in order to buy peace and avoid protracted litigation. The ld. Counsel submitted that the purchase of spare parts were made for the....
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....orities as given by DGIT(Inv.), Mumbai, the suppliers were stated to have given only bogus bills without supplying any material and these purchases were merely accommodation entries to suppress/reduce profits to evade taxes. The assessee did not file any evidence to prove that these were genuine transactions undertaken by the assessee. We have observed that the A.O. issued notices u/s 133(6) of the Act twice to verify the transactions of the assessee but these notices returned un-served and returned back by the postal authorities and the assessee also could not produce these parties before the authorities below. The A.O. had given sufficient opportunity to produce the parties during assessment proceedings but the assessee failed to discharge his onus. The primary onus is on the assessee to provide cogent evidences/explanations that these were genuine transactions for the purchase of spare parts which are used for the business of the assessee. The Revenue has doubted the genuineness / bonafide of the purchase transactions which are alleged to be accommodation entries/ bogus purchases. The onus is on the assessee to justify the consumption of the spare parts for the purpose of the bu....