TaxTMI 
TaxTMI 
2018 (8) TMI 1626
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.... The Appellant craves leave to add, amend and modify the above grounds of appeal. 3. Rival contentions have been heard and record perused. Facts in brief are that assessee is carrying business of trading of stainless steels and consignee agent and business of trading of ferrous and non ferrous metal. Assessee usually purchases goods from well known concerns of Jindal Group named JSL Limited and Remi Edelstahi Tubalars Limited. Jindal Stainless Limited is one of the largest integrated manufacturers of stainless steel in India. 4. The department got information regarding bogus supplier, therefore, a survey was also conducted u/s.133A by Income Tax Department on assessee where no adverse documents found at assessee premises. Assessing officer send notices to those defaulter which shown as not served. Further during the assessment Ld. A.O. further wanted to verify all other supplier purchases other than Jindal Group amount to Rs. 48,39,52,303/-. Assessee submitted all details in respect of those purchases but Assessing officer was still unsatisfied with the submissions so filed by assessee. Hence for peace of mind, assessee agreed for addition of 0.10%-0.15% of alleged purchase....
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....not covered under Excise duty hence where in local Purchases no Excise Duty are levied hence there is not Excise duty invoices in remaining purchases of goods. As per learned AR making comparison between two bills which is incomparable itself is bad in Laws. All sales of assessee were accepted and corresponding sales is not doubted by Assessing Officer. 7. With regard to the bogus purchases, it was contended by learned AR that the assessee was using the company for the purpose of providing sale bills for which he was collecting some margin. At the time of survey no evidence was found to suggest that the assessee was engaged in real commission business. No other source of income was also found. 8. As per learned AR, this issue of determination of rate of commission in case of accommodation transaction arose before the ITAT in case of Sanjay Kumar Garg vs. ACIT [2011] 12 taxmann.com 294 (Delhi) wherein Tribunal held as under:- "-49. The next issue arises for estimation of commission income. In the statement the assessee at the time of survey under section 133A had stated that he charged 25p as commission for providing accommodation entries and out of that 25p he ....
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....s of bogus provider. Therefore, in the absence of any such material on record, the statement given by the assessee on oath during the course of survey proceedings has to be given credence. The assessee has floated the bogus concerns and has controlled the accounts. During the course of survey, no material was found on the basis of which it could be said that the assessee had passed on. 1 per cent commission to the persons in whose names the bank accounts were maintained. In the absence of any evidence having brought on record, we are unable to agree with the assessee that the assessee had passed on commission of 10 Ps. to the persons in whose names dummy concerns were floated. However, in the business of entry provider certain expenditure has to be incurred which has been stated to be 5p during the course of survey. Therefore, credit of 5p out of 25p received as commission has to be allowed. Therefore, the Assessing Officer is directed to estimate commission income by applying 0.2 per cent net commission on turnover determined by the Ld. CIT (A) for both the assessment yea....
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.... AR also relied on the following judicial pronouncements in support of the contention that no addition can be made without evidence. * ITO V/s Permanand [2008 25 SOT 11] * IT V/s M K Bros. [163 ITR 249] CIT V. Kashiram Textile Mills P Ltd. [2006] ITR 61 (GUJ) Saraswathi Oil Traders V. CIT [2000] 284 * 254 ITR 259 (SC),174 CTR 108 (SC) 13. As per learned AR merely on the information of third party without providing opportunity of cross examination, no addition can be made. For this purpose, reliance was placed on the following judicial pronouncements. * Kishan Chand Chella Ram v. CIT [1980] T25ITR713 (SC) * Marneedi Satyam V/s Masimukkula Venkataswami [ AIR 1949 Mad 689] * ITO V/s Permanand [2008 25 SOT 11] 14. As per learned AR since all the payments were made through account payee cheque, this fact would overshadow all other short comings. For this purpose reliance was placed on the following judicial pronouncements. * Mather & Platt (India) Ltd. vs CIT 168 ITR 493 Cal * ITO V/s Kashmir Ind. Palace 99 Taxmann (Chd) (Mag) * RamanandSagar V/s DCIT 256 ITR 134 (Bom) * CIT-I v.Nangalia Fabr....
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....dered rival contentions and carefully gone through the orders of the authorities below. We had also deliberated on the judicial pronouncements referred by lower authorities in their respective orders as well as cited by learned AR and DR during the course of hearing before us. From the record, we found that there was a survey at the assessee's premises with respect to the information regarding bogus purchase bill. The AO found that assessee has taken bogus purchase bill as per the information of the Sales Tax Department. Assessing officer send notices to those defaulter which shown as not served. Further during the assessment Ld. A.O. further wanted to verify all other supplier purchases other than Jindal Group amount to Rs. 48,39,52,303/-. Assessee submitted all details in respect of those purchases but Assessing officer was still unsatisfied with the submissions so filed by assessee. Hence for peace of mind, assessee agreed for addition of 0.10%-0.15% of alleged purchases. However, the AO added 1.83% of entire purchases which is Rs. 103,49,27,162/- i.e. amount of Rs. 1,89,39,167/-. However, CIT(A) after relying on the decision of Gujarat High Court in case of Smith P ....
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....ents. * ITO V/s Permanand [2008 25 SOT 11] * ITO v. Vinod Kumar, Prop., Vinod Brothers, Sriganganagar, [ITA No. 623/Jodh. Of 2005 * ITO V/s Arora Alloys Ltd. [2012] [12 ITR(trib) 263] 26. As per learned AR when there is a quantity tallied with regard to purchase and sales, no addition is warranted. For this purpose, reliance was placed on the following judicial pronouncements. * Balaji Textile Industries (P) Ltd v. ITO(1994) 49 ITD 177 (Bom) * DCIT v. Adinath Industires (2001) : 252 ITR 476 (Guj) * CIT v. M K Brothers (1987) : 163 ITR 249 (Guj * DCIT v. Adinath Industries (2001) : 247 ITR 35 * DY.CITV. BRAHMAPUTRA STEELS (P) LTD. [20O2] 122 TAXMAN 32 IATA - Gauhati) 27. From the record we found that before AO, assessee has filed following details with documentary evidence. * Comparative Trading Account with GP Ratio * Purchases from suppliers whose name is not appearing in list of Hawala Dealers * Corresponding Sales of suppliers whose name is not appearing in list of Hawala Dealers ; * Purchases from suppliers whose name is appearing in list of Sales Tax Departme....
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....nbsp; 734 181,162,039 0.12 Shree Sundha Steels Private Limited F.Y. 2010-11 A. Y. 2011-12 Trading Account on the basis of Genine Purchases grid Sales as per Assessee whose name is not appearing in VAT ( hawala Dealer of Mahavat but addition made by A.O. Particulars Qty. (M.T.) Amount Particulars Qty (M.T.) Amount GP To Opening Stock By Sales 2,513 497,196,347 To Purchases 2,513 548,943,313 By Closing Stock Less: Purchases Return 64,991,010 483,952,303 To Gross Profit 13,244,044 2512.601 497,196,347 2,513 497,196,347 2.66 Shree Sundha Steels Private Limited F.Y. 2010-11 A. Y. 2011-12 Trading Account on the basis of Purchases and sales on which sellers have not paid VAT as pe....