TaxTMI 
TaxTMI 
2014 (2) TMI 1296
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....o appreciate that the statement of the assessee were recorded on four occasions clearly showing that the statements were voluntary in nature and that the assessee has participated in such proceedings. 5. The Ld. CIT(A) failed to place the order of Ld. CIT (A), Valsad before the AO and hence violated the provisions of the Rule 46A of the I.T. Rules. Therefore, the order of the Ld. CIT(A) is bad in la w. 6. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. 2. From the above grounds it is gathered that the main grievance of the department relates to the deletion of addition made by AO of Rs. 59,88,389/- in respect of labour charges and Rs. 2, 32,35,817/- in respect of purchases 3. Facts of the case in brief are that the original assessment in this case was framed u/s 143(3) of IT Act, ( hereinafter referred as the Act) and passed on 16.10.2008 at an income of Rs. 2,03,6 6,040/-, which was shown in the return by the assessee. Thereafter the AO received an intimation from DCIT, Navsari Circle, Navsari that labour charges payment and purchases payments made by the assessee to Shri Anilkumar Chahwalla, Proprietor of M/s Parth C....
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....herein the transactions of Mr. Anilkumar Chahwalla with the assessee were held to be genuine and addition made therein was deleted. The assessee furnished the copy of the assessment order and CIT(A)'s order in the case of Mr. Anilkumar Chahwalla, before the Ld. CIT(A). 6. Ld. CIT(A) after considering the submissions of the assessee observed that from the body of the assessment it is very much evident that the AO has not adduced any reasons of his own for assessing the disputed amounts as assessee's income except reproducing the extract of intimation received from DCIT, Navsari and that the huge additions were made in a casual manner without any enquiry or discussion in the assessment order. He further observed that the assessee brought to the knowledge of AO that Mr. Anilkumar Chahwalla, whose statement was supposed to be the basis of reopening of the assess ment u/s 147 of the Act, retracted from the statement given by him before the DCIT, Navsari. He also pointed out that the assessee filed copies of affidavits dated 27.12.2008 and 15.12.2009 of Mr. Anilkumar Chahwalla, giving details of such retraction. He further pointed out that the A O had not considered at all the materia....
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....an affidavit dated 27.12.2008 and, therefore, the statement recorded by the AO during the assessment proceedings alone cannot form the basis of additions made by the AO. The Ld. CIT(A) extracted the finding of Ld. CIT(A) Valsad, given i n para 10 and 10.1 his order passed in the case of Mr. Anil Kumar Chahwall a in para 5.1 in the impugned order. For the sake of repetition the same is not reproduced herein. The Ld. CIT(A) accordingly held that the transactions between the assessee and Mr. Anilkumar Chahwalla, Proprietor of M/s Padmavati Gems were genuine and there was no reason to consider the said transactions as bogus and accommodative in nature. 8. As regards the labour charges paid to M/s Part h Corporation, the Ld. CIT(A) observed that payments were made duly by cheques copies of the bank statement highlighting the said payments w ere also produced before the AO and a certificate dated 15.07.2005 is sued by ITO ward -1, Navsari, addressed to the assessee permitting the deduction of TDS at a lower rate till 31.3.2006 under section 197 of the IT Act on labour charges paid by the assessee to M/s Parth Corporation, indicated that M/s Parth Corporation, Proprietor concern of Mr.....
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....S at a lower rate, therefore, the addition made by AO was rightly dele ted. As regards the admission of additional evidence, the Ld. Counsel f or the assessee submitted that if the additional evidence furnished by the assessee before the appellate authorities is in the nature of clinching evidence leaving no further room for any doubt or controversy, no useful purpose would be served in performing the ritual or forwarding the evidence or material to AO and obtaining his report. Reliance was placed on the decision of ITAT's Mumbai Bench of Tribunal in the case of ITO Vs. Industrial Roadways [2008] 305 ITR 219 (Mumbai). 11. We have considered the submissions of both the parties and have carefully gone through the material on record. In this instant case it is an admitted fact that the AO did not invoked the provisions of section 145(3) of the Act. He has also accepted the opening stock, closing stock, sales and gross profit shown by the assessee and if all other constituents of trading account were accepted then there was no occasion to doubt the purchases. Moreover, the addition was made by the AO merely on the basis of statement of Mr. Anilkumar Chahwalla who i s a proprietor of....