TaxTMI 
TaxTMI 
2018 (5) TMI 2010
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.... in the circumstances of the case and in law, the Ld. CIT (A) erred in confirming interest charged under section 234A, 234B and 234C. 3. The assessee craves leave to add, alter or amend the existing grounds of appeal on or before the date of hearing. 2. As per the facts of the present case, the assessee is engaged in the business of metals and filed his return of income for the year under consideration declaring total income at Rs. 3,55,984. The return was processed u/s 143(1) of the I.T. Act and subsequently, the AO received information from the Sales Tax Department through DGIT(Vig), Mumbai that the assessee had procured bogus purchase bills totaling to Rs. 1,04,46,243/- from 5 parties. Consequently, the AO issued notice u/s 148 of the....
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....se sales and purchases, copy of ledger account of parties alongwith extract of bank statement showing that the payments had been made to the parties through banking channel. It was further submitted by Ld. AR that the material purchased by the assesse is genuine but the AO disallowed the purchases made from the above parties and levied tax by wrongly estimating GP @ 12.5% on purchases from the above 5 parties. It was further submitted that additions @ 12.5% on the purchases would shot up the GP @ 14.59% as assessee had already disclosed GP @ 2.09%, therefore such high GP is abnormal and not feasible. Hence, the estimation of GP passed by the revenue authorities is on surmises and conjecture and therefore is liable to be set aside. 5. On th....
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.... ITR 0274 dealt with similar case where some of the alleged suppliers who had issued bills to the assessee were not genuine as they were not traceable. The goods must have been received from other parties. The likelihood of the purchase price of these alleged purchases being inflated could not be ruled out and therefore the Hon'ble High Court has upheld the decision of CIT(A) and the ITAT disallowing 25% of the payments made to such parties. The Hon'ble High Court of Gujarat in the case of CIT vs. Simit P. Sheth 356 ITR 0451 held that once the sale is accepted by the AO, the very basis of purchases could not be questioned. Not the entire purchase price could be disallowed but only the profit element embedded in such p urchases could....
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..... Adinath Industries [2001] 252 ITR 476 (Guj.), CIT v. Precious Jewels Corpn. 17 taxmann.com 264 (Raj.), CIT v. Rajesh P. Soni [Tax Appeal No.1107 of 2006, dated 27-2-2012. 9. On identical facts and circumstances, the Hon'ble Jurisdictional High Court as well as the Tribunal, Mumbai Bench, has deleted the addition made under section 69C, in the following cases:- i) CIT v/s NikunjEximp Enterprise Pvt. Ltd. 372 ITR 619 (Bom.); ii) ACIT v/s Tarla R. Shah, ITA no.5295/Mum./2013, dated 2nd February 2016; and iii) Shri HarilalChunilal Jain v/s ITO, ITA no.4547/Mum./2014, dated 1 January 2016. 10. It is evident from the assessment order that on the basis of information obtained from the Sales Tax Department, Assessing Officer issued no....
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....to make further investigation to ascertain the genuineness of the transactions. Without making any further enquiry or investigation the Assessing Officer cannot sit back and make the addition by simply relying upon the information obtained from the Sales Tax Department and issuing notices under section 133(6) of the Act. As the Assessing Officer has failed to make any enquiry or investigation to prove the fact that the purchase transactions are not genuine whereas the assessee has brought documentary evidences on record to prove genuineness of such transactions which are not found to be fabricated or non-genuine, the action of the Assessing Officer in ignoring them cannot be accepted. When the payment to the concerned parties are through pr....
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....s of law. However, we are further of the view that in order to check possible revenue leakage, certain additions may be sustained in the present case on the basis of comparative analysis of GP of the present year compared to the earlier years. 11. Ld. AR drawn our attention to the decision of the Coordinate Bench of Hon'ble ITAT 'F' Bench in ITA No. 3699, 4276 4917 & 4760/Mum/16 titled M/s Geolife Organics Vrs. ACIT, Vikram N. Chandan Vrs. ITO, Jabarsingh B Daiya vrs. ITO & Rajendra Nemichandji Chandan Vrs. ITO, Hon'ble ITAT 'J' Bench in ITA No. 1177/Mum/17 case titled M/s SVPHN Steel Service vrs. ITO and ITA No. 1864/Mum/17 case titled Jabarsingh Vrs. ITO, wherein the Hon'ble ITAT has taken a consistent view an....