TaxTMI 
TaxTMI 
2017 (9) TMI 368
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....the same is liable to be set aside on this ground alone. ii) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in confirming disallowance of purchase of Rs. 39,07,412/-, by estimating G.P. @ 25% of Rs. 1,56,29,649/- as Bogus Purchasers and confirming the addition under section 69C of the Income Tax Act 1961 by rejecting the evidence produced in respect of the disposal of Purchases from alleged hawala dealers namely M/s. Shiv Sagar Steel (India), M/s Prime Steel Impex, M/s Asian Metal and Industry & M/s Deep Metal and Tube to the sellers by producing the Sales and Purchases identification item wise. iii) The learned CIT*(A) erred in confirming the addition of Rs. 39,07,412/- on the basis of the certain information received from Sales Tax Department without providing either the copies of alleged statements of hawala dealers admitting in affidavit that after deducting due commission of 1 % they have refunded back the balance in cash to the buyer/ the Appellant or not giving any opportunity to cross examine the said alleged hawala dealers. iv) The learned CIT (A) erred in invoking provisions of section 145 (3) of the Incom....
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....shtra as hawala operator and their names were appearing in the website of the State Government and were providing accommodation entries. According to the information received, the assessee obtained bogus purchase bills from following parties: i) Shiv Sagar Steel (India) (AY-2009-10) Rs.7,84,042/- ii) Prime Steel Impex(AY-2009-10 Rs/12,91,945/- iii) Asian Metal Industries (AY-2009-10) Rs.66,33,280/- iv) Deep Metal and Tube (AY-2009-10) Rs.69,20,382/- During the course of assessment proceedings, the AO found that the assessee has debited total purchases of Rs. 5,81,79,603/- which included purchases of Rs. 1,56,29,649/- made from the hawala entries providers. The assessee was asked to specifically during the course of assessment proceedings to prove the purchase from the above four parties with documentary evidences but the assessee could not prove and furnish the evidences. Finally, the AO came to the conclusion that the purchase made by the assessee from these four parties of Rs. 1,56,29,649/- were not genuine as the same were made from the parties who were declared hawala operators without taking actual delivery of materials and added the same....
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....0), which appears to be quite reasonable, in the line of business under dispute. Keeping in mind the various rulings, as discussed above, facts of the case, appellant's inability to furnish the requisite details in the prescribed format, unavailability of hawala parties for examination 1 verification etc, in my considered opinion, the disallowance of 25% i.e. Rs. 39,07,412/- out of total hawala purchases of Rs. 1,56,29,649/-, will be reasonable to meet the justice, in view of the decisions of the Hon,ble High Court in the case of Vijay Protein, Sanjay Oil Cake Industries etc as above. Accordingly, the appellant will get relief of Rs. 1,17,22,236/(Rs.1,56,29,649/- Less Rs. Rs. 39,07,412/-) and balance disallowance of Rs. 39,07,412/is hereby upheld. All the grounds of appeal, as raised above, are decided accordingly." 7. We have heard the rival submissions and perused the material placed before us including the impugned orders. We find that the in the present case, the ld.CIT(A) rejected the books of the assessee u/s 143(5) for the reasons that the assessee failed to furnish the quantitative details of purchase and sales, closing stock, item wise and party wise details and the....
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....equired to be completed on time. Accordingly, when the material is required in emergency the telephonic orders are placed upon the parties who supply the materials at site. The corresponding consumption of materials in respect of which the purchases were affected by the assessee firm have not been doubted by ld. AO. Neither any document information has been provided by the AO nor he has given any opportunity to the assessee to cross examine the said party and AO has concluded that the purchases by assessee company from the said party is bogus merely on the basis of information from Sales Tax Department. The AO has not conducted any independent enquires for making the addition especially since the assessee has discharged its primary onus of showing books of account, payment by way of account payee cheque and producing bills for purchase of goods. From the record we found that the gross profit of the assessee has been consistently growing year after year which is depicted in the table below and which has been accepted by the Department: Assessment Year Sales Gross Profit GP Ratio 2008-09 21,59,13,671 2,06,07,377 9.54% 2009-10 30,70,57,145 3,91,87,695 ....
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....ioner of Income-tax v. M.K. Brothers (Gujarat High Court) (163 ITR 249), held as under:- [ Section 69 of the Income-tax Act, 1961 - Unexplained investments - In relevant assessment year assessee made certain purchases from some parties and made payment through cheques - ITO found that parties were not available to cross-examine and that though purchases were claimed to have been made on credit ".- basis, payments were shown to have been made after substantial lapse of time after date of purchase - ITO held those transactions to be bogus and added back amount spent on purchases as income of assessee - Whether Tribunal was justified in deleting aforesaid addition to income of assessee on ground that there was no evidence to show that vouchers given by those parties to assessee were bogus or that any part of those payments came back to the assessee-Held, yes" 13. In view of the detailed finding recorded by CIT(A), which has not been controverted by ld. DR by brining any positive material on record, we do not find any reason to interfere in the order of CIT(A). Applying the proposition of law discussed in the above judicial pronouncements to the facts of the instant c....