TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 1632
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....ngineering goods and filed its return of income for A.Y. 2009-10 on 16/9/2009 declaring total income of Rs. 3,04,92,010/-. The return was assessed u/s 143(1) of Income Tax Act, 1961 (hereinafter referred to as 'the Act') accepting returned income. Thereafter, information was received from the Maharashtra Sales Tax Department which had conducted enquiries in the cases of several dealers located all across Maharashtra resulting into unearthing of a racket involving more than 1935 Hawala dealers and more than 33,700 beneficiaries. 'Hawala' entails making bogus invoices to allow a trader to claim tax credits. In this racket, the Hawala operator posing as the "seller" exists only on paper, issues fake bills to the concern and gets commission in return. The beneficiary, in turn, gets the input tax credit on the material he had never purchased in reality. It has been identified by the Sales Tax Department that there are more than 37,700 such beneficiaries who had used fake invoices to fraudulently claim tax deduction on such purchases. The list of beneficiaries contain the total amount of Hawala availed by the beneficiary for respective Financial Years. The information received fr....
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....e documents which they have not done. The Ld. AR further demonstrated that there has been movement of goods and invited our attention to paper book, 'A-2' at page 28 where bills of the transporter is attached. However, bills do not depict any amount. Since that bill has to be raised at Pune during relevant period. The Ld. AR also submitted that they have accepted bogus purchases made at the time of survey and have offered additional income to tax in the revised return filed, it is on account of stress and duress imposed upon them by the Revenue Authorities. They have made reiteration before the Ld. CIT(A) through an affidavit filed which is also placed before us in the paper book. 6. Per contra, the Ld. DR contended that on going through the statement recorded u/s.133A of the Act, statement has been taken on oath from the assessee and at the verification part; he has categorically stated that every statement has been made in a sound state of mind and without undue pressure, coercion or duress. That even the CA of the assessee has signed verification along with the assessee and the statement was recorded only as per procedure laid down in the Act. The Ld. AR has stated that undue ....
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....iew of the above said ratios, the present issue of bogus purchases is to be decided on the basis of facts of each case. The first aspect is the information received by the Assessing Officer from the Sales Tax Department in respect of alleged hawala dealers. In many cases, the Assessing Officer has not even received the copy of statement recorded or any other evidence from the Sales Tax Department, except the list of hawala dealers and on the basis of the said list, the assessment proceedings have been completed in the hands of assessee, who had made the purchases from the said parties. In case, no such evidence has been received by the Assessing Officer before making addition, then there is no warrant in making aforesaid addition in the hands of assessee merely on the basis of so called list of hawala dealers. There are other cases, where the Assessing Officer had received the statement of the persons who were hawala dealers and who had admitted to have just issued bills of sale without delivery of goods. In such circumstances, there is evidence against the respective assessee that where the seller of the goods, has admitted not to have entered into real transaction of sale of good....
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.... 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 real 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 had supplied copies of statements recorded and had also issued notice under section 133(6) of the Act, where hawala dealer was not traceable and in the absence of the assessee failing to file any documentary evidence of delivery of goods, addition is to be upheld in the hands of assessee on account of such bogus purchases. IV. The next instance is the case of goods which have been admittedly sold by the hawala dealer and has been received by the assessee, who in turn had maintained quantitative details and also evidence of its movement i.e. transportation details and quality control details of consumption of the said material or exa....
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....1(1)(c) of the Act, it is the ground of the Revenue that it is only after the detection of bogus purchases and survey action, the assessee offered additional income to tax which otherwise, he would have concealed. 13. The Ld. AR on the other hand, submitted that though they have reiterated the statement on the bogus purchases but immediately after admission on oath and accepting additional income, they have filed revised return of income offering for taxation. Therefore, they do not have 'mens ria' or ill motive to defraud revenue. Rather, the assessee always co-operated with the Revenue and by filing revised return there is no concealment of income neither furnishing of inaccurate particulars of income. 14. We have perused the case records and heard the rival contentions on the issue. We have given considerable thought to the issue of penalty being imposed u/s. 271(1)(c) of the Act and have taken guidance of the Hon'ble Apex Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd. reported at 322 ITR 158 (SC). It is not that in all facts and circumstances, penalty can be levied. That from the circumstances of the case there has to be derived elements of 'mens ria' a....