TaxTMI 
TaxTMI 
TaxTMI 
2020 (12) TMI 522
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....tement given to sales tax department, without providing an opportunity to cross examine those parties, disregarding the law laid down by Honorable Supreme Court in the case of Kishanchand Chellaram v. CIT (1980) 125 ITR 713 and Andaman Timber Industries v. Commissioner of Central Excise (Civil Appeal No. 4228 of 2006.) and Bombay High Court in the case of H. R. Mehta v. ACIT (2016) 72 taxmann.com HO(Bombay) and CIT v. Ashish International (Bom HC -IT APPEAL NO.4299 OF 2009). 2. Without prejudice to ground no. 1, in the facts and circumstances of the case and in law, the Learned CIT(A) has erred in upholding the addition of the whole of the purchases of Rs. 56,17,397/- being alleged hawala purchases, disregarding the fact that without cons....
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....to make enquiries about the purchases claimed by the assessee and notices under section 133(6) were issued to some of the sellers. However, these notices were returned unserved by the postal service with the remarks 'not known' or there was no compliance. The AO noted that the following four parties also appeared in the list of hawala dealers as identified by the Sales Tax Department, Mumbai:- SI. No. Name of the Party Amount of Purchase (in Rs.) 1 Suraj Tube Corporation 19,86,005 2 Chanchal Tube Corporation 22,72,653 3 Sidhivinayak Steel 9,25,579 4 Paras Sales Corporation 4,33,160 Total 56,17,397 The AO confronted the assessee regarding the above vide notice under section 142(2) dated 01/02/2013. In this n....
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....also mentions the modus operandi of these persons. The AO has attached a copy of this affidavit as Annexurc-3 to the order of assessment. In view of the above discussion is the AO held that the assessee has only obtained accommodation entries from these four hawala dealers and after discussing the case laws especially those relating to the test of human probabilities, the AO held that the alleged purchase of Rs. 56,17,397/- to be bogus and the same was added to the taxable income of the assessee. 7. The AO also noted that yet another purchase of Rs. 21,19,723/- had been claimed by the assessee as made from one M/s Asian Steel, Pune. The AO issued a notice under section 133(6) to this party for confirmation of the facts. This supplier has r....
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....-, the assessee had not deducted the relevant TDS in many cases and respect of the other had of expense i.e. 'wages & labour'. The AO noted that during the previous year the assessee had made aggregate payments exceeding Rs. 50,000/- to 127 labour parties. The amount involved was Rs. 1,10,44,091/-. The AO issued necessary show-cause to the assessee as to why this amount net be disallowed as an expense for nondeduction of TDS under section 194C of the Act. The assessee contended that the labour force is not contractual and therefore no TDS was done. The AO noted that these persons have been employed on a daily basis at various work sites of the assessee and there was no employer-employee relationship. The AO also noted that the asses....
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....t no infirmity whatsoever has been found in the assessee's contract work done. Hence, he submitted that 100% disallowance in this case should not be done. 12. Per contra, learned Departmental Representative relied upon the order of learned CIT(A). 13. Upon careful consideration we find that the authorities below have treated the purchases to be bogus primarily on account of information from Sales Tax Department and non-response by the concerned suppliers to the notice of the Assessing Officer. The assessee has duly submitted the purchase invoices and payments were also done through banking channel. It also noted that the assessee has done contract work and as per the contract specification assessee was required to provide materials and la....