TaxTMI 
TaxTMI 
2017 (6) TMI 519
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....pt. 2) The Learned CIT(A) erred in holding that 25% of the purchases made by the assessee from the above parties were to be disallowed without appreciating that no disallowance was warranted on facts of the case. 3) The Learned CIT(A) failed to appreciate that - a) The entire purchases made by the assessee from the above party were supported by purchase invoices and detailed stock statement and the transportation/octroi receipts were also furnished in respect of some purchases and hence, there was no reason to doubt the genuineness of the said purchases. b) The payments to the said parties were made through bank cheques and the A.O. had not brought any evidence on record to show that the payments made by the assessee to these parties were withdrawn by it and returned to the assessee in cash and hence, in the absence of any contrary evidence, there was no reason to doubt the genuineness of the payments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) The above suppliers had not paid VAT and hence, they had left their registered premises and hence, the addition made by ignoring the various documentary evidences furnished by the assessee was not justified mer....
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....id purchases from the said dealers. The assessee was one such purchaser of goods allegedly from the bogus dealers. The Assessing Officer during the course of assessment proceedings show caused the assessee as to why the purchases made from the hawala parties being bogus transactions should not be added in the hands of assessee. The assessee explained that against the said purchases, the payments have been made through banking channel and there is no merit in relying on the statements of said persons without giving an opportunity to cross-examine. The assessee also filed the trail of goods and even the copies of transportation receipts and Octroi receipts wherever available. The assessee also produced statement showing quantitative details of material purchased and corresponding sales in order to establish the genuineness of transactions. The Assessing Officer however, made addition on account of bogus purchases of Rs. 24,31,891/- and Rs. 11,85,773/- in assessment years 2010-11 and 2011-12. 8. The CIT(A) after taking note of various judicial precedents on the issue, restricted the addition to GP rate @ 25% on the said purchases. 9. The assessee is in appeal against the order o....
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....e 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 show caused the assessee to explain the purchases from six parties on the basis of information received from the Sales Tax Department. The list of parties totaling Rs. 31,98,665/- is as under:- Name of the Party Amount 1) Sandoz Steel 10,79,483 2) Adijin Enterprises 2,39,460 3)....
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....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 assessee is able to establish the transportation of goods by way of weighbridge bills, copies of transportation bills and further, where the assessee has also made available the evidence of sale of said goods which were purchased from six parties, then prima facie the assessee has established its case. Another aspect to ....
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....e 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 added in the hands of assessee and the said addition would meet the ends of justice, as the purchases are admittedly made from hawala parties. The Assessing Officer is directed to compute the quantum in respect of evidences furnished by him to the assessee in the form of statements recorded of the other persons. Where no such statement....