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TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 839
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....aring as may be advised from time to time. B. Relief claimed 1. The addition confirmed to the tune of Rs. 6,04,182/- by the CIT(A)-2 Pune Camp Office Thane on account of alleged hawala purchase being not warranted by facts be deleted. 2. Any other relief as deemed fit by the authority." 4. The brief facts of the case are that the assessee filed its return of income on 26.09.2009 declaring total income to the tune of Rs. 9,56,900/-. The return was processed u/s 143(1) of the I.T. Act, 1961. The case of the assessee was reopened u/s 148 of the Act by issuance of notice dated 20.03.2013 which was served upon the assessee. The case of the assessee was reopened on the basis of information received from the Sales Tax Department of Maharashtra in which the name and address and other details of the certain persons were given who provided the entries of bogus purchases bills to a large number of bogus purchases. The assessee was also one of beneficiary. The assessee purchased the material from 3 parties in sum of Rs. 6,04,182/-. The claim of the parties are hereby mentioned as under.:- Sr. No Name of the Entry Provider Maharastra VAT A.Y. Amount in the purchase bills taken b....
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....tatement on oath of these hawala suppliers and in their statement, they had clearly admitted that they were merely lending their name and signature with regard to the transactions carried out in the name of the said concerns. These hawala operators also admitted that transactions are only on paper and no materials were actually supplied. The Assessing Officer during the assessment proceedings gave opportunities to the assessee to explain the hawala purchases but no submission was filed before the Assessing Officer. 5.4 On the basis of facts noted by the Assessing Officer as well as verification made by the Sales Tax department, following facts emerge: I. The alleged suppliers had himself admitted before the Sales Tax authority that they were not supplying any material but were issuing bills for the purpose of earning some commission. ii. The appellant could not otherwise prove during the assessment proceedings or appellate proceedings, the genuineness of the supply made. iii. No confirmation etc. of the supplier was filed other during the assessment or appellate proceedings. iv. The evidences produced in the form of inward register, copy of ledger account etc. are all sel....
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.... ITAT Pune bench in a recent decision in the case of M/s. Chhabi Electricals Pvt. Ltd and Ors. in ITA No.795/PUN/2014 dated 28.04.2017 has laid down following guidelines for making disallowances in the cases of hawala purchases: In case no information is received by the Assessing Officer from the Sale Tax Department and no copy of statement recorded or any other evidence is received from the Sales Tax Department. then no addition is to be made on the basis of name of hawala dealer in the list prepared by the Sales Tax Department, where the assessee had asked for the said information during assessment proceedings. Where the Assessing Officer had received the statements of persons who had admitted to have just issued bills of sale without any delivery of goods. In view of such evidence, where the assessee had not entered into rea! transaction of purchase of goods and in the absence of any delivery of goods, the sales are bogus and the entire sales are to be added in the hands of assessee. Admittedly the dealer had not even paid VAT against such passing of goods. iii. The case where the Assessing Officer had confronted the information received from the Sales Tax Department and h....
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....06/2016 in which the Hon'ble Court has recognized the principle that if an expenditure including purchases is proved to be bogus under the IT Act then the provision of Section 69C does not permit allowing partial expenditure. The relevant portion of the decision of the Hon'ble Court reads as under: "The Tribunal in the case of Vijay Proteins Ltd. vs. CIT has observed that it would be just and proper to direct the Asses:4n° Officer to restrict the addition in respect of the undisclosed income relating to the purchases to 25% of the total purchases. The said decision was confirmed by this Court as well. On consideration of the matter, we find that the facts of the present case are identical to those of M/ s. Indian Woollen Carpet Factory (supra) or M/ s. Vijay Proteins Ltd. In the present case the Tribunal has categorically observed that the assessee had shown bogus purchases amounting to Rs. 2,92,93,288/- and taxing only 25% of these bogus claim goes against the principles of Sections 68 and 69C of the Income Tax Act. The entire purchases shown on the basis of fictitious invoices have been debited in the trading account since the transaction has been found to be bogus. The Tri....