TaxTMI 
TaxTMI 
2018 (4) TMI 277
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....ly issue raised in the present appeal is against the addition made on account of bogus purchases. 4. Briefly, in the facts of the case, the assessee was engaged in the business of manufacturing of steel products. The Assessing Officer received information from Sales Tax Department, Govt. of Maharashtra that certain persons were involved in providing bogus purchase bills to the beneficiaries. The assessee was one of such beneficiaries and the total purchases made by the assessee were to the extent of Rs. 10,00,142/-. The case of assessee was reopened under section 148 of the Act. The Assessing Officer in view of information received under section 133(6) of the Act, held the assessee to have accepted bogus accommodation bills of purchases and entire purchases of Rs. 20,00,492/-, (original hawala of Rs. 10,00,142/- and new hawala of Rs. 10,00,142/-) were added in the hands of assessee. 5. The CIT(A) applied GP rate of 25% on the aforesaid purchases and reduced the addition to Rs. 5,00,123/-. 6. The assessee is in appeal against the same. 7. The learned Authorized Representative for the assessee pointed out that no addition is warranted on account of hawala purchases since the copy....
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....fore us is that in order to establish the genuineness of purchases, it had supplied ledger accounts of suppliers - copies of bills of purchases, movement of goods received, purchase orders, bank statements showing payments made through bank to supplier, purchase register and production flow chart with drawing and quantity used statement. The assessee also sought copy of statement which was recorded, on the basis of which the said person was called as hawala dealer. The assessee also sought an opportunity to cross-examine the alleged hawala dealer. The assessee regarding the fact that the letters were received back with a remark that 'parties were not traceable' pointed out that the purchase bills and proof of payments through bank established the case of purchase of goods from the said parties. In view of above said evidences being filed by the assessee which establishes the movement of goods and where the CIT(A) has also noted the consumption details filed by the assessee and where the assessee had sought copies of statements recorded which were not supplied to the assessee, then under such circumstances, no addition is warranted in the hands of assessee in respect of aforesaid al....
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....s made by the assessee to the said persons that cash had been withdrawn and handed over to the assessee. Another aspect which the assessee 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 totalin....
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....ibunal only while deciding the present appeal and in view thereof, the matter needs to be set aside to the file 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 wh....
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.... hereinabove are at slight variance. The first aspect was the said parties are hawala dealers and the assessee 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 furn....