TaxTMI 
TaxTMI 
2017 (11) TMI 1347
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....ed in giving full relief to the assesses whereas in similar issues in the cases of CIT Vs. Bholanath Poly Fab Pvt. Ltd. 355 ITR 290 (Guj.) CIT Vs. Simit Seth 356 ITR 451 (Guj.), the Tribunal have decided that though the purchase might have been made form bogus parties, the purchases themselves were not bogus and Hon'ble Tribunal was of the opinion that not the entire amount, but the profit margin embedded in such purchase amount would be subjected to tax. 3. On the facts and in the circumstances of the case in law, the Ld. CIT(A) has failed to appreciate the fact that the Hawala dealers have admitted on oath before the Sales Tax Authorities that they have not sold any material to anybody." 3. The short facts of the case are that the return of income was filed by the assessee on 30/09/2009 declaring total income of Rs. 79,76,375/-. The case was selected for scrutiny on the basis of information received from Maharashtra Sales Tax Department that the assessee has entered into bogus purchase transactions with 13 parties totaling to Rs. 2,06,78,079/-. After recording reasons, the assessment was reopened by issue of notice u/s 148. During reassessment proceedings, the Ass....
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....n account of bogus purchase made by the A.O. in A.Y. 2010-I1, The relevant part of the decision is reproduced as under: "We have considered the rival content ions of the parties and perused the material avai lable on record. The A.0. while making the assessment observed that assessee had affected the purchases from following parties which were identified by the Sales Tax Department as under: Sr. No. Name of the party Amount so called purchases made (Rs.) 1 V3 Enter prises 9,48,886 2 Shri Sai Trading Co. 9,33,814 3 Rohit Enterpirses (material) 9,3 6,287 4 Niddhish Impex Pvt. Ltd. 9,42,568 5 Deep Enterprises 9,36,062 6 Colourshop Trading Co. Pvt. 25,62,560 Total 72,60,177 The AO issued notice to all the parties out of which the notices were served upon two parties, two notice retuned back un-served and the remaining two on which notice were served, no reply was received. The AO further observed that assessee failed to produce the parties for verification, the genuineness of the expenses were not proved and treated the entire expenditure as unexplained expenditure from these si....
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....ial point itself. Suspicion of highest degree cannot take place of evidence. He could have called for the details of the bank account of the suppliers to find out as whether there was any immediate cash withdrawal from their account. We find that no such exercise was done. Transportation of good to the site is one of the deciding factor to be considered for resolving the issue. The FAA has given a finding of fact that part of the goods received by the assessee was forming part of closing stock. As far as the case of Western Extrusion Industries. ITA/6727/Mum/2012/RGK 4(supra) is concerned, we find that in the matter cash was immediately withdrawn by the supplier and there was no evidence of movement of goods. But, in the case before us, there is nothing, in the order of the AO, about the cash trail. Secondly, proof of movement of goods is not a doubt. Therefore considering the peculiar facts and circumstances of the case under appeal, we are of the opinion that the order of the FAA does not suffer from any legal infirmity and there are not sufficient evidence on file to endorse the view taken by the AO. So, confirming the order of the FAA, we decide ground no. 1 against the AO." ....
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.... was not fair. We find that in the similar situation, it has been decided by ITAT in the case of Ramesh Kumar & Co vs. ACIT in ITA No.2959/M/2014 and Rajeev G. Kalathin in ITA No.6727/M/2013 wherein it is held as under: "5.1 Now the issue before us is whether the aforesaid case of the assessee is covered in favour of the assessee by the various decisions cited by the Id. Counsel. In the case of 1TA No.6727/Mum/2012 (Ay 2009-10) dated 20.08.2014 we find that the similar addition was made on the basis of information available on website of Sales Tax Department. Government of Maharashtra, which was deleted by the Tribunal. The relevant para 2.4 is extracted as below. "2.4 We have heard the rival submission and perused the material before us. We find that the AO had made the addition as one of the supplier was declared a hawala dealer by the VAT Department. We agree that it was a good starting point for making further investigation and take it to logical end. But, he left the job at initial point itself. Suspicion of highest degree cannot take place of evidence. He could have called for the details of the bank account of the suppliers to find out as whether there was ....