TaxTMI 
TaxTMI 
2016 (12) TMI 1667
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....e addition was made by the Assessing Officer on the basis of information received from DIT(Invest.) and the Sales Tax Department of Maharashtra Government with respect to bogus purchases made by the assessee from suspicious dealers, wherein, goods were actually not supplied. The crux of the argument is that assessee could not prove the genuineness of the purchases before the Assessing Officer. 2.1. On the other hand, the ld. counsel for the assessee, Shri Rahul H. Hakkani, defended the impugned order by contending that the Ld. Commissioner of Income Tax (Appeal) duly considered the factual matrix, various case laws, as discussed in the order including from Hon'ble jurisdictional High Court in the case of Nikunj Eximp Enterprises Pvt. Ltd.. 2.2. We have considered the rival submissions and perused the material available on record. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, we find that the assessee is engaged in the business of civil construction, on sub-contract basis, fr....
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....tract of the judgment is as under: "Whether on the facts and in the circumstances of the case and in law the Tribunal was right in deleting the addition made by the Assessing Officer of Rs. I,33,41,917/- towards bogus purchases even though the suppliers were non-existent and one of the parties had categorically denied having any business dealings with the Appellant Company". ............. We have considered the submissions on behalf of the revenue. However, from the order of the Tribunal dated 30.04.2010, we, find that the Tribunal has deleted the additions on account of bogus purchases not only on the basis of stock statement i.e. reconciliation statement, but also in view of the other facts. The Tribunal records that the Books of Accounts of the assessee appellant have not been rejected. Similarly, the sales have not been doubted and it is an admitted position that substantial amount of sales have been made to the Government Department i.e. Defence Research and Development Laboratory, Hyderabad. Further, there were confirmation letters filed by the suppliers, copies of invoices for purchases as well as copies of bank statement all of which would indicate that the purchase....
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....ed which clearly establishes the assessee's case that the purchases as recorded by the assessee in the books of accounts are genuine. The ratio laid down by Hon'ble Apex court in the case of Dhakeswari Cotton Mills Ltd. Vs Commissioner of Income Tax, West Bengal reported at 26 ITR 775 (SC) The relevant para of the order is reproduced hereunder:- "we are in entire agreenei1 with the learned Solicitor- General when he says that the income-tax Officer is not fettered by technical rules of evidence and pleadings, and that he is entitled to act on material which may not be accepted as evidence in a coon of law, hut there the agreement ends, because it is equally clear that in making the assessment tinder sith-section ('3) of Sectioii 23 of the Act, the Income-tax Officer is not entitled to make a pure guess and make an assessment without reference to any evidence or any material at all. There must he something more than hare suspicion to support the assessment under Section 23(3)." Likewise, the Mumbai Bench of the Tribunal in the case of Hiralal Chunilal Jain & Others vs. ITO & Others (2016) 46 CCH 0020 (Mum) wherein the Tribunal held as under: "2. Assessee, an indivi....
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....red 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 accounts 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." In the present case also the AG had made the addition on the basis of information received from the Sales tax department, but, he did not make any independent inquiry. He did not follow the principles Of natural justice before making the addition. The FAA had reduced the addition to 20%, but he has not given any justification except stating that same was done to plug the probable leakage revenue. Considering the peculiar facts and circumstances of the case, we are reversing the order Of the FAA Effective ground of appeal is decided in favour of the assessee." In another case, the Mumbai Bench of the Tribunal in the case of DGIT vs. Rajeev G. Kalathil reported at (2014) 41 CCH 0552 (Mum), wherein it was held as under: "2.3 Before us, ....