AI Drafter 
TaxTMI 
TaxTMI 
2017 (3) TMI 1712
X X X X Extracts X X X X
X X X X Extracts X X X X
....,40,779/ being peak credit available with the Appellant, a) in the facts and the circumstances of the case and in law, the ld. A.O. erred in adding Rs. 97,40,779/- being peak credit available with the Appellant by treating the same as non-genuine only on the basis of the information on the web site www.mahavat.gov.in about suspicious dealers whose copy of statement recorded were not furnished to the appellant. b) In the facts and circumstances of the case and in law, the learned AG. erred in adding Rs. 97,40.779/- being peak credit available with the Appellant by treating the same as non-genuine even though the same has been fully allowed by the jurisdictional Mumbai Tribunal in many cases. c) In the facts and circumstances of the case and in law, the learned AO. erred in adding Rs. 97,40,779/- being credit available with the Appellant on the basis of third party statements without issuing notices u/s 133(6) and 131 by himself 3) In the facts and circumstances of the case and in law, the learned Commissioner of Income Tax(A) erred in confirming the addition by overlooking several case laws submitted, 4) The AG wrongly charged interest u/....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ment made u/s 148 2) To delete the addition of Rs. 3,43862/- being peak credit available with the Appellant and against decided cases of Mumbai ITAT. 3) To delete interest charged u/s 234 and initiation of penalty u/s 271(1) (c). [C] General:- * The appellant reserve rights to add alter or delete any portion of this appeal before its conclusion. * This appeal is filed in time and m2x please be allowed in full. * A Detailed paper book along with case laws will he submitted at the time of hearing. ITA No. 5295/Mum/2016 for A.Y 2009-10 [A] Grounds of Appeal: 1)In the facts and the circumstances of the case and in law, the learned AO, erred in passing the order s 143 r.w.s 147 and therefore rendering the whole reassessment had in law after 4 years on borrowed satisfaction. 2) In the facts and the circumstances of the case and in law, the learned AO. erred in adding Rs. 15,64,068/- being peak credit available with the Appellant, a) In the facts and the circumstances of the case and in law, the learned A.O. erred in adding Rs. 15,64,0681- being peak credit available with the. Appellant by treatin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed. 4) The AO wrongly charged interest us 234B mid C and initiated penalty us 271(1 (C). [B] Relief Prayed: 1) To quash the re-assessment made u/s 148 2) To delete the additions on account of peak credit system in the off chance that SL1h modification occurs to the additions to this appeal with respect to changes in the appeals of AY. .2007-08,2008-09, 2009-10. 3) To delete interest charged us 234 and initiation of penalty u/s 2.71(l) (c) [C] General: - * The appellant reserve rights to add alter or delete any portion of this appeal before its conclusion. * This appeal is filed in lime and may please be allowed in full. * A Detailed paper hook along with case laws will be submitted al the lime of hearing. ITA No. 5297/Mum/2016 for A.Y 2011-12 [A} Grounds of Appeal: 1) in the facts and the circumstances of the case and in Jaw. the learned A.O erred in passing the order u/s 143 r.w.s 147 and therefore rendering the whole reassessment bad in law. 2) In the facts and the circumstances of the case and in law, the learned A.0 erred in adding Rs. 9,73,906/- being peak credit avai....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Thereafter, AO reopened the case u/s 148 on 26.3.2014 after recording the reasons for the same. The assessee filed its new return of income pursuant to section 148 on 23.4.2014 declaring total income of Rs. 6,33,680/-. The case was selected for scrutiny and the order u/s 143(3) r.w.s 147 was completed on 04.03.2015 for A.Y 2007-08, assessing the total income of the assessee at Rs. 1,03,74,459/- after making additions of Rs. 97,40,779/- on account of bogus purchase made from hawala dealers. The additions were made by the AO on the basis of information received from Sales Tax (VAT) Department, State of Maharashtra whereby above mentioned purchases were disallowed by treating them as bogus purchases on the basis of Addition in respect of infusion of cash from alleged hawala parties on the basis of peak credit method treating as income from other sources. 5. Aggrieved by the order of the AO, assessee filed appeal before CIT(A) and the CIT(A) after considering the case of both the parties had dismissed the appeal of assessee. 6. Aggrieved by the order of CIT(A), the assessee has filed the present appeal before us on the grounds mentioned herein above. Although, the assessee h....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in order to show the place of delivery made by the respective suppliers through brokers. The ld. AR further relied upon the case laws which are mentioned in submissions and reproduced below: - a. In the case of Rajeev M Kalathil 672 7/M112. it was held that, "We have heard the rival submissions and perused the material before us. We find that 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. 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." b. In the case of Ganpatraj A Sanghavi [I.T.A. No.2826/Mum/2013] it was held that, "A perusal of the orders passed by the tax authorities would show that they have suspected the genuineness pur....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ied in confirming the dis allowance of purchases. Accordingly, we set aside the order of Ld. CIT(A) on this issue and direct the AC) to delete the dis allowance of purchases. c. In the case of Ramesh Kumar & Co [VIA No 1959/Mum/2014] it was held that "In our considered opinion, the purchases are supported by proper invoices duly reflected in the books of account. The payments have been made by account payee cheque which are duly reflected in the bank statement of the assessee. There is no evidence to show that the assessee has received cash book from the suppliers. The additions have been made merely on the report of the Sales Tax Department but at the same time it cannot be said that purchases are bogus. We, therefore, set aside the findings of the 14+ CIT(A) and direct the AO to delete the addition of Rs. 4,98,80,892/-." d. In the case of Smt. Ramila P Shah [ITA No 5246/M/2013] it was held that, "In view of the facts discussed above as well as binding judicial pronouncements of the jurisdictional ITAT Mumbai Bench as well as Hon'ble Mumbai High Court and other legal precedents, the addition made by the Assessing Officer amounting to Rs. 28,08,071/ - cannot h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ements given by the third parties before the Sales Tax Department, without conducting any other investigation. In the instant case also, the assessing officer has made the impugned addition on the basis of statements given by the parties before the Sales tax department. We notice that the ld. CIT(A) has taken note of the fact that no sales could be effected without purchases. He has further placed reliance on the decision rendered by Hon'hle Gujarat High Court in the case of CIT Vs. M.K. Brothers (163 ITR 249). He has further relied upon the decision rendered by the Tribunal in the case of ITO Vs. Premanand (2008) (25 SOT 11 ) (Jodh), wherein it has been held that where the AO has made addition merely on the basis of observations made by the Sales tax dept and has not conducted any independent enquiries for making the addition especially in a case where the assessee has discharged its primary onus of showing books of account, payment by way of account payee cheque and producing vouchers for sale of goods, such an addition could not be sustained. The Ld. CII'(A) has also appreciated the contentions of the assesee that he was not provided with an opportunity to cross examine ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....egree cannot take place of evidence. He could have called for the details of the hank 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 AO 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" g. Moreover, also in the case of Tarla Shah [1TA No. 5295/Mum12013] it was held that, "We are of the view that the facts of case of the assessee are same as in the foregoing decisions and thus the case of the assessee is squarely covered by these decisions of the tribunal. We, therefore, find no reason to interfere in the order of the Clf(A) and uphold the same by dismissing the appeal o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erits of the addition, the other ground raised by the assessee challenging the initiation of proceedings under section 147/148 of the Act is rendered academic and is not being adjudicated for the present." i. Same additions were also deleted in the case of Govind RathodELlA NO :439/MUM/2016 in which it was held that, "Considering, the various decisions of coordinate bench, we are of the view that the facts of case of the assessee are similar and the ratio decided in all the cases is squarely applicable on the Facts of the present case. Thus, we hold that the addition made by AO and sustained by Id CIT(A) is liable to be deleted. In the result, the appeal of the assessee is accepted. As the assessee has succeeded on the merits of the addition, the other ground raised by the assessee challenging the reopening u/s 147/148 has become academic." j. Recently. In the case of Mahesh K. Shah [ITA No, 5194/Mum12014] it was held that, "Purchases cannot be treated as bogus merely on the basis of the statements and affidavits filed by the alleged vendors before the sales-tax department. The said statements cannot be relied upon without cross-examination of the parties. The fac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he orders passed by revenue authorities we found that the AO had made the additions on peak credit of the suppliers balances and by holding the purchases made by the assessee to be bogus. As per the facts of the present case, we find that the only basis of the AO for holding the purchases made by the assessee to be bogus is the information of the names of the suppliers appearing on the website of sales tax Department. The AO has neither supplied nor furnished or confronted the alleged statements made by the suppliers to the assessee and no opportunity of cross-examination of suppliers was ever given to the assessee. In the present case the the assessing officer had already accepted the sales of the assessee and it is an undisputed fact that all the payments were made by the assessee to the suppliers through banking channel and the assessing officer has also overlooked the fact that quantitative tely of material was available bill to bill on record. We have also gone through all the judgements cited by both the parties the material placed on record by way of paper book and from the cumulative reading of all the documents placed on record, we are of the view that the purchases made b....