TaxTMI 
TaxTMI 
2021 (2) TMI 533
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.... under the head Profits and Gains from business or profession. Assessee filed its return of income on 26.09.2010 declaring total income of Rs. 5,11,360/-/-. The return was processed u/s 143(1) of the Act. Further the case was selected for scrutiny and statutory notices were issued and served on the assessee. In response, AR of the assessee filed the relevant information as called for. 4. After verification of details filed by the assessee, AO disallowed the following expenses and added to the total income. i. Rs. 20277/- i.e. 10% of Rs. 202771/- on account of depreciation on car for want of verification as the element of personal use in respect of car cannot be ruled out. ii. The information has been received from DGIT (Investigation)/ Sales Tax Department regarding Hawala Billers who had given accommodation entries to assessee in the following cases. S.NO NAME OF THE PARTY PROPRIETORY CONCERN TIN F.Y. AMOUNT 1. NIRAJ DINESH LIMBACHIYA SHEETAL TRADING CO . 27250554020V 2009-10 . 218453/- 2. KAMLESH KISHORBHAI SHETH AMBIKA TRADE IMPEX 27350705382V 2009-10 54501/- 3. VINIT VINAYAK GAWADE SOMNATH....
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.... section 69C is not applicable as payments for purchases were made through banking channels and further Assessee had filed purchases bills, delivery challan and weigh bridge receipts and bills to prove that purchase were genuine and hence addition of Rs. 1,76,790/- is may be deleted. 2.1 The learned CIT(A) erred in confirming addition u/s. 69C of alleged bogus purchases of Rs. 1,76,790/- made from M/s. G.R. Trade Link without appreciating that said addition was made by Assessing officer in gross violation of principles of natural justice as no opportunity of cross-examination of Shri Gopal Singh Rawat, proprietor of M/s. G.R. Trade Link was provided to the Assessee and hence addition of Rs. 1,76,790/- may be deleted. 3. Without prejudice to above, the learned CIT(A) erred in sustaining addition of entire amount of alleged bogus purchases from M/s. Bhumi Sales Corporation and M/s. G.R. Trade Link. 4. The appellant craves leave to add, amend, alter or delete any of the above grounds of appeal. 8. Before us, Ld. AR brought to our notice page 4 of the statement of facts filed before Ld. CIT(A), in which assessee has objected for 100% addition of alleged pu....
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....ce, we are inclined to sustain the addition @ 6% similar to the other alleged purchases. Accordingly, addition is sustained @ 6% to the alleged purchases. Therefore, the grounds raised by the assessee are partly allowed. 11. Consequently, the appeal filed by the assessee is partly allowed. 12. Now coming to ITA No. 2365/Mum/2019 for Assessment Year 2011-12 filed by the assessee. 13. The brief facts of the case are, during this assessment year, AO received information from the sales tax Department that assessee has indulged in bogus purchases. On verification, AO observed that assessee has made purchases from M/s Payal Enterprises of Rs. 3,17,872/- and M/s Payal Enterprises is a hawala dealer, issuing bills without actual sales of goods. Accordingly, AO made 100% disallowance to the alleged purchases. 14. AO further observed that assessee has claimed labour charges of Rs. 11,24,133/- and this labour charges were paid to various labourers on day to day work and payments were made in cash and all the vouchers were self made which were not independently verifiable. Accordingly, he disallowed an amount of Rs. 75,000/- 15. AO further observed that assessee has claimed depr....
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....d. 4. The appellant craves leave to add, amend, alter or delete any of the above grounds of appeal. 18. Before us, Ld. AR submitted that assessee has purchased material from M/s Payal Enterprises during this year, AO treated the purchases as bogus purchases. He brought to our notice that assessee has purchased from the same supplier in earlier assessment year also and in that assessment year, Ld. CIT(A) has sustained the addition @ 6%. In this year, Ld. CIT(A) again treated the above said purchases from the same parties as bogus but sustained addition 100% of the purchases as bogus. With regard to other disallowance, he submitted that AO cannot disallow the adhoc disallowance without there being any reason. It is a normal business expenditure incurred for the purpose of business. With regard to motor car expenses, he prayed that further relief may be granted to the assessee. 19. On the other hand, Ld. DR submitted that all the disallowances were made based on the report of Sales Tax Department and it is fact that all these parties were hawala operators supplied bills without making any sales. He relied on the orders passed by the revenue authorities. 20. Considere....