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2017 (5) TMI 1263
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....e orders passed under section 143(3) r.w.s. 147 of the Act. Further, another appeal filed by the assessee in the case of Shri Deepak Tanaji Rainak is against the order of CIT(A)-2, Pune, dated 15.12.2015 relating to assessment year 2010-11 against the order passed under section 143(3) r.w.s. 147 of the Act. 2. This bunch of appeals relating to the different assessee on similar issue were heard together and are being disposed of by this consolidated order for the sake of convenience. ITA No.302/PUN/2016, relating to assessment year 2009-10 M/s. Chetan Enterprises (Revenue's appeal) 3. The Revenue in ITA No.302/PUN/2016 has raised the following grounds of appeal:- 1. The Ld. ClT(A)-2, Nashik was not justified in observing that after removing the impugned purpose, the gross profit would rise to 12.27 without giving any basis as what would be the correct percentage of the gross profit of such businesses. The Ld.CIT(A) has erred in imposing of profit margin of 10% of the impugned purchases to be added to the income without including initial capital employed, the peak investment and considering the turnover cycle. (T.E. in this case is Rs. 17,17,236/- which is exclusive....
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....on record to show that the payments made by the assessee to these parties were withdrawn by them and returned to the assessee in cash and hence, in the absence of any contrary evidence, there was no reason to doubt the genuineness of the payments made by the assessee to these parties. c. These parties had not paid VAT and hence, they may have left their registered premises and hence, in view of the various evidences furnished by the assessee, there was no reason to doubt the genuineness of the above purchases merely because these parties were not found at their registered addresses. 4] The learned CIT(A) ought to have appreciated that the disallowance made merely on the basis of statements of the nine parties recorded by the Sales Tax Dept. was not justified at all for the following reasons - a. The A.O. had not provided the copies of statements recorded by the Sales Tax Authorities in respect of six out of nine parties and hence, the reliance placed on such statements without confronting the same to the assessee was not justified in law. b. The A.O. had not provided the opportunity of cross examination of the various parties in spite of specific....
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....pliers which were not responded by the said parties. The assessee was not able to produce the suppliers before the Assessing Officer. Hence, the Assessing Officer made addition of Rs. 56,13,536/- by treating the said purchases to be non-genuine or bogus. 9. The CIT(A) considering the evidence filed by the assessee i.e. copies of invoices issued by suppliers on various dates, bank statement showing payment by bank cheque, extract of suppliers account in the audited books of assessee, weighbridge receipts and transportation receipts in respect of impugned goods purchases, was of the view that 10% of the alleged hawala purchases should be added in the hands of assessee. The plea of the assessee that in the absence of any statements or evidence being provided in respect of impugned purchases to the extent of Rs. 41,54,454/-, wherein the assessee had requested the Assessing Officer to allow cross-examination, which was not allowed, then in view of the decision of Hon'ble Supreme Court in M/s. Andaman Timber Industries Vs. Commissioner of Central Excise, Kolkatta- II, Civil Appeal NO.4228 of 2006, judgment dated 02.09.2015, the plea of the assessee was that the addition in such ci....
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....the copy of bank statement was furnished in this regard. The assessee further claims that no case has been made by the Assessing Officer against the said payments made by the assessee to the said persons that cash had been withdrawn and handed over to the assessee. Another aspect which the assessee points out is that when he came to know that the VAT collected by the said dealers has not been deposited with the Sales Tax Department, he voluntarily revised his return under MVAT Act by withdrawing the set off of claim in the earlier return and paid the taxes with interest. Another exercise carried out by the assessee with regard to purchases and sales was that the same quantity of goods received were sold to their customers, wherein the quantity of goods purchased from so- called hawala dealers tallied with the supplies made by the assessee to its customers. The transportation expenditure in respect of goods purchased from the said parties was incurred by the assessee through account payee cheques. The bills of transportation including Octroi were made available by the assessee. In this regard, the assessee claims that the purchases made by it were genuine. The Assessing Officer had ....
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....efore the CIT(A) also, the claim of assessee was that no statements or evidence in respect of impugned purchases to the extent of Rs. 14,32,856/- has been provided. This aspect came to the knowledge of Tribunal only while deciding the present appeal and in view thereof, the matter needs to be set aside to the file of Assessing Officer for verifying the copies of statements supplied to the assessee and thus, the total amount of purchases in this regard. In case the basic documents are not available with the Assessing Officer, then merely on the basis of allegation of impugned purchases from hawala dealers, no addition is warranted in the hands of assessee. However, in case the Assessing Officer has copies of statements, the same needs to be supplied to the assessee in order to give chance to the assessee to prove his case. In case any of the statements are not available with the Assessing Officer, no addition to the extent of purchases made from the said parties is warranted in the hands of assessee, in the absence of any evidence. 11. Now, coming to the claim of assessee vis-à-vis the impugned purchases, where the said purchases are backed by purchase bills and the ....
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....g Officer and further, no evidence in the form of delivery challans furnished by the assessee and hence, the purchases were added in the hands of assessee. 13. The facts of the present case as pointed out in the paras hereinabove are at slight variance. The first aspect was the said parties are hawala dealers and the assessee has made purchases from such hawala dealers, who though collected VAT but had not deposited in the Government Treasury, is common in respect of the cases. However, in the present case before the Tribunal, the assessee claims that it had made available the evidence proving the genuineness of purchases made by it by way of copies of transportation receipts, weighbridge receipts and also the bills of transportation. Another aspect which is at variance from the other cases is that the payment in the case has been made by cheque. In view of the above said circumstances, where the assessee can establish its case of delivery of goods and its onward transmission by way of sale bills of nearly the same quantity, the entire purchases cannot be disregarded. In the paras hereinabove, the addition to the extent of 10% of the quantum of hawala purchases has been ad....
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.... statement, 7/12 extract, books of account. The assessee produced the invoices and delivery challans but could not produce the lorry receipts and stock registers. In the absence of the same, the Assessing Officer was of the view that the transaction cannot be verified and hence, the purchases of Rs. 20,06,939/- were treated as bogus. 16. The CIT(A) took note of various evidences filed by the assessee and the plea of the assessee that merely because it was not maintaining day-to-day stock records and lorry receipts, the impugned purchases could not be added in the hands of assessee. The CIT(A) held that the Assessing Officer was not justified in making the addition on the basis of information received from the Sales Tax Department of whole purchases. The assessee before the CIT(A) accepted that the additional income @ 10% of said purchases be added in the hands of assessee in order to buy peace of mind. The CIT(A) accordingly, restricted the addition in the hands of assessee. 17. The Revenue is in appeal against the said order of CIT(A). 18. We have already decided this issue in the case of M/s. Chetan Enterprises in the paras hereinabove. In the facts of the present case, ....