TaxTMI 
TaxTMI 
2016 (9) TMI 1582
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.... the Bench on the earlier occasion. 2. Brief facts of the case are that the assessee is a partnership firm engaged in the trading of steel products filed its return of income for the assessment year 2007-08 on 15.11.2007 admitting income of Rs. 30,07,110/-. Subsequently the case was taken up for scrutiny and the assessment was completed under section 143(3) of the Act, wherein the learned Assessing Officer made additions of Rs. 4,98,76,465/- towards unexplained cash credit standing in the name of i) Shree Ganesh Steels Rs. 2,79,06,603/- ii) M/s. D.G.Traders Rs. 2,19,69,862/- and Rs. 17, 20,000/- due to disallowance under section 40A(3) of the Act. 3. The assessee has raised several grounds in its appeal, however, they are concised ....
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....ided by the assessee. However, the inspector could not locate the concern M/s. D.G.Traders. On enquiry in the locality, it was revealed that no such concern operated in that area. ii) When the same was informed to the assessee firms' partner Mr. M.R.Goyenka though he requested for time for producing the sundry creditors, he was not able to do so. iii) With respect to the letter sent to M/s. Sree Ganesh Steels, it was replied by them that they did not have any dealings or transaction with the assessee firm. iv) On examining the payment made to M/s. Sree Ganesh Steels from the current account maintained by the assessee in its bank A/c., it was revealed that the amount was paid to various individuals other than M/s S....
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....its quantitative purchase, sales and stock tally before the Revenue. v) The assessee has discharged its prima facie burden for proving the genuineness of the purchase. Since there was a time lag for making enquiries and the purchases related to scrap which is in the business falling in unorganized sector, it was difficult to locate the sundry creditors. vi) The purchases made by the assessee were also not doubted by the Central Excise authorities. vii) The sales tax registration and CST registration of the sundry creditors were furnished to the Revenue which proved that the identity of the sundry creditors. Further the learned Authorized Representative submitted a paper book containing 1 to 60 pages which were ....
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....in of profit in the nature of business of the assessee is minimal as less as one per cent or even lesser. There is also no finding by the Revenue that the assessee had not purchased scrap but the only doubt was with respect to the genuiness of two sundry creditors who had supplied raw materials to the assessee. Further the assessee has submitted the following materials to show that the sundry creditors were genuine:- i) Order of the Assistant Commissioner of Sales Tax dated 12.9.2016 and notice of demand from ACST dated 12.9.2016 to show the genuineness of the local purchases of iron & steel (at page No.196 & 198 of the paper book) ii) Details of TIN number, CST Number and PAN of M/s. DG Traders and M/s.Sree Ganesh Steels ....
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....8 of the Act with regard to both these sundry creditors. Thus, the issue is decided in favour of the assessee. 10. With respect to the other grounds raised by the assessee in the appeal, we do not find it necessary to interfere with our earlier orders because there is no mistake apparent on record with respect to those issues. Therefore, the same order is repeated once again. "Ground No.3: Disallowance of Rs. 17,20,000/- under section 40A(3) of the Act: 5. During the course of assessment proceedings, it was observed by the learned Assessing Officer that the assessee has paid cash to various individuals. It was explained by the assessee that it had paid cash through its employees to M/s. Sree Ganesh Steels against purcha....