TaxTMI 
TaxTMI 
TaxTMI 
2017 (9) TMI 305
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.... 09/01/2016, disposing of assessee's objections against notice u/s 148 of the I.T Act, 1961 without any basis or justification. 2. The Learned CIT (A) has erred in upholding the AO's action of rejecting the Books of Accounts of the Appellant u/s 145 of the Income tax Act, 1961 without appreciating the fact that the books of accounts were maintained during the course of the business, were audited under the Companies Act as well as Income tax Act. 3. The Learned CIT (A) has erred in concluding that the Appellant's purchases are questionable and are accounted to bring down the profitability there by avoiding the payment of taxes when the Appellant's GP and NP ratios have gone up as compared to the previous years. 4. The Learned CIT (A) has erred in accepting the AO's conclusion that the purchases made from the two parties i.e. Rajeshwari Metal Industries and Amar Trading Corporation are fictitious without verifying the consumption statement filed and without appreciating the fact that the Appellant could not have executed the orders from Tata Power Ltd and BARC, Trombay. 5. The Learned CIT (A) has erred in upholding the addition of Rs. 15,08,045/- (24.7....
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....r Trading Corporation 27790199673V 40,19,774 Total 61,02,974 The A.O. observed that the TIN status with MVAT authorities of the above parties was found to be cancelled and these parties were engaged in the practice of only giving accommodation entries on fixed commission income basis and no real transactions were involved as no material/goods were supplied by these parties against the billing done by these bogus dealers, which conclusions were the result of investigations carried out by both MVAT authorities and Income-tax Department . The AO also observed that the Maharashtra VAT Authorities have also recorded the statement of these parties u/s 14 of the Maharashtra Value Added Tax Act, 2002, whereby these parties have confessed that they were only issuing bogus bills without supplying any material. In order to verify genuineness of these purchases, notices u/s 133(6) of the Act were issued by the A.O. to all these parties . However, these notices u/s 133(6) were returned un-served. The assessee was show caused as to why the alleged purchases made from the hawala parties should not be disallowed and added to the income of the assessee. In response, the assesse....
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....rchases which were made from the aforesaid parties were S S Plates and sheets which were consumed in fabrication at the assessee's factory located at R-534, TTC, Industrial Estate, MIDC, Rabale, Thane-400701. The assessee submitted before learned CIT(A) that details of raw material consumed and closing stock were duly filed before AO. The assessee also submitted that copies of invoice, delivery challans, ledger accounts confirmation from parties, copies of PAN status of these parties from website of I T Department, copies of bank statements with payment proof and delivery proof were all submitted before the AO. It was submitted that payments were made through crossed account payee cheques, proof of delivery by tempo/lorry with delivery challans were submitted and the material was consumed in the manufacture of goods during the course of business of the assessee. It was submitted that the parties were existing at the time when the purchases were made and the assessee did not had any doubt that these parties TIN were cancelled. It was submitted that fabrication and supplies to Tata Power could not have been made without the material purchased from the parties referred to above. It wa....
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.... did not object to the dismissal of ground no 1 raised by the assessee challenging legality and validity of reopening of assessment u/s 147/148 of the 1961 Act as not being pressed. 8. We have considered rival contentions and also perused the material available on record. We have observed that the assessee company is engaged in the business of sale of engineering goods, labour charges, erection and commissioning and fabrication. The assessee had filed its return of income u/s 139(1) of 12-10-2010, which was processed u/s 143(1) of the Act. Subsequently, information was received by the AO from DGIT(Inv) that the assessee had made purchases from the alleged hawala dealers whereby these hawala parties were only engaged in issuing bogus bills without supplying any material. The details of the parties are as under:- Sr No. NAME OF THE SUPPLIER TIN AMOUNT 1 Rajeshwari Metal Industries 27140353242V 20,83,200 2 Amar Trading Corporation 27790199673V 40,19,774 Total 61,02,974 Notices u/s 133(6) of the Act were issued by the AO to all the aforesaid parties who have allegedly issued bogus purchase bills to the assessee, but the said notices u/s 133(6) were re....
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....n view entire factual matrix of the case. The question boils down to the fair and reasonable estimate of additions which could serve and meet the end of justice to both the parties. Reference is drawn to decision of Hon'ble Supreme Court in the case of Kachwala Gems v. Jt. CIT [2007] 288 ITR 10/158 Taxman 71 (SC), wherein Hon'ble Lordships held as under : "4. The facts of the case are in a short compass. The appellant-assessee deals in precious and semi-precious stones. In the course of assessment, the Assessing Officer noticed the following defects in the books of account of the assessee : '1. The assessee has not maintained and kept any quantitative details/stock register for the goods traded in by the assessee. 2. There is no evidence on record or document to verify the basis of the valuation of the closing stock shown by the assessee. The assessee is not able to prepare such details even with the help of books of account maintained, purchase bills & Sale Invoices. 3. Provisions of section 145(3) are clearly attracted in this case. 4. The genuineness of purchases to the extent of Rs. 42 lakhs (approx.) is not proved without any doubt. 5. The GP rate ....