2017 (2) TMI 803
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.... The Ld. CIT(A) has erred on facts and in law in deleting the disallowance made by AO u/s 69(c) of the act of Rs. 2,04,85,861/- without appreciating the fact that the assessee has failed to prove the genuineness of the .purchases by not producing purchase parties for verification. 4. The Ld. CIT(A) has erred on facts and in law in deleting the disallowance made by AO U/S 69(c) of the act of Rs. 2,04,85,861/- without appreciating the fact that the parties have been declared as bogus hawala provider by the Sales Tax department on the basis of the corroborative evidence available with them and inference based on the finding of such agencies cannot be constituted as suspicion. 2. The brief facts of the case are that assessee is individual and proprietor of M/s Paras Engineering Company. The assessee is engaged in the business of fabrication of engineering parts. The assessee filed return of income for relevant AY on 31.10.2007 declaring total income of Rs. 54,58,981/-. Subsequently, during the assessment proceeding, the assessee filed revised return of income of Rs. 89,30,387/-. The assessment was completed u/s 143(3) of the Act on 18.05.2009 assessing the total income of Rs. 92,07....
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.... order of AO and argued that despite deducting tax at source on the payment made to M/s Microtec International Ready and M/s Metal Tube and Rolling Mills, the assessee not deposited the sum within the statutory period in the government treasury and the same was rightly disallowed by AO. On the other hand, ld. AR of the assessee argued that TDS has been paid before the due date of filing of return. Ld. AR of the assessee relied upon the decision of Hon'ble Delhi High Court in CIT vs. Ansal land Mark Township P. Ltd. (2015) 377 ITR 635. 4. We have considered the contention of the parties and gone through the order of authorities below. The Hon'ble Delhi High Court in CIT Vs Ansal Land Mark Township (supra) held: "The second proviso to Section 40(a) (ia) was inserted by the Finance Act 2012 with effect from 1st April 2013. The effect of the said proviso is to introduce a legal fiction where an Assessee fails to deduct tax in accordance with the provisions of Chapter XVII B. Where such Assessee is deemed not to be an assessee in default in terms of the first proviso to sub-Section (1) of Section 201 of the Act, then, in such event, "it shall be deemed that the assessee has deducted a....
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....n Ansal land Mark Township P. Ltd. The assessee has deposited the amount before due date of filing of return u/s 139(1) and then it was covered by clause-A of section 40(a)(ia) of the Act no disallowance was warranted. Thus, respectfully following the decision of Hon'ble Delhi High Court, we do not find any illegality or infirmity in deleting the disallowance u/s 40(a)(ia) by ld. CIT(A). Thus, Ground No. 1 & 2 of the appeal is dismissed. 6. Ground No.3 & 4 relates to deleting the disallowance u/s 69C of Rs. 2,04,85,681/-. The ld. DR for the Revenue supported the order of AO and would argue that the name of parties from whom the assessee has purchased the goods were included in the list of suspicious/hawala dealers in the VAT/Sales Tax Department, Government of Maharashtra. Those parties were not carrying out the genuine business of purchase and sale of goods to work merely issuing bills without actual sale and purchase of goods. The registration of all dealers was cancelled by the Sale Tax Department. The assessee despite giving opportunity failed to prove the genuineness of purchases. Thus, AO made the disallowance of purchases. The ld. CIT(A) deleted the entire disallowance. On ....
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....s, delivery challans, laboratory tests attribute, comparative statement of three years showing the material consumption during the three years. The additional evidence of the assessee was forwarded to the assessing officer for ascertaining the veracity of the facts and verification of the evidences by the Assessing Officer. The Assessing Officer submitted his report vide report dated 1 August 2014. After considering the remand report with regard to the disallowance of alleged bogus purchases of Rs. 2,04,85,861/- and considering the other material available on record the ld CIT(A) passed the following order; "4.4 I have considered the assessment order, submission made by the appellant, the AO's remand report and the counter comments of the appellant thereon, on appreciation of the facts, it is not in dispute that appellant had purchased the material and actually used for the purpose of manufacturing, the fact has not been denied by AO. It is also found from the facts that gross profit ratio of the appellant has increased since the year under consideration as against the preceding previous year and therefore, prime facie it is not a case where appellant has introduced purchases to r....