TaxTMI 
TaxTMI 
2017 (7) TMI 1431
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....ical. However, for the sake of deciding the issue, reference is being made to the facts and issue in ITA Nos.1365/PUN/2015 & 1407/PUN/2015. 4. The assessee in ITA No.1365/PUN/2015 has raised the following grounds of appeal :- On facts and in law, 1] The learned CIT(A) erred in partly confirming the disallowance made by the A.O. on account of purchases made from three alleged hawala parties on the basis of information obtained from Maharashtra Sales Tax Dept. 2] The learned CIT(A) erred in holding that the Gross Profit rate on the alleged hawala purchases of Rs.2,45,93,371/- made from the above parties was to be considered @ 5% as against 0.69% declared by the assessee and thereby confirming the addition of Rs.10,59,974/-. 3] The learned CIT(A) failed to appreciate that the entire purchases made by the assessee from the three parties were genuine and the same were duly supported by documentary evidences and hence, in the absence of any contrary evidence brought on record by the dept., no disallowance was warranted on facts of the case. 4] The learned CIT(A) ought to have appreciated that - a. The alleged hawala suppliers had g....
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.... case the CIT(A) was justified in deleting the purchases treated as bogus when the appellant had not been able to produce the certain parties from whom purchases were made when letters sent to the parties were returned undelivered or the parties did not respond ? iii) Whether the Ld. CIT(A) should have considered the fact that the onus was on the assessee to get the purchases verified when required to do so especially when such purchases were very substantial in amount, in some years roughly about 50 of the total purchases ? iv) Whether the Ld CIT(A) erred in assuming that the purchases were only inflated when it was clear from the conduct of the assessee, the parties found missing and results of the investigation of another Govt. Department (Sales Tax), that the purchases could not be proved as genuine and therefore the disallowance by the AO was justified ? v) Whether the Ld CIT(A) erred in presuming that simply because no addition was made in case of Sales, it was accepted as genuine and further assuming that thereby purchases should be genuine ? vi) Whether the Ld. CIT(A) erred in accepting the affidavits from suppliers without any explanatio....
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.... During the course of assessment proceedings, information was called from the said parties from whom the assessee had claimed to have made purchases. However, the letters were returned by the postal authorities with the remarks 'Left/Refused/not known. The assessee was asked to produce the above parties but the assessee could not produce any of the parties. Hence, the Assessing Officer made an addition of Rs.2,45,93,371/-. 7. The CIT(A) after referring to various judicial precedents on the issue and the facts of the case noted that in the instant case, the assessee purchased the goods i.e. industrial oil against confirmed orders received. The CIT(A) took note of the counter affidavits / notarized certificates from the suppliers confirming the sales made by them and also stating that original affidavits were forcibly obtained by the Sales Tax authorities. The CIT(A) noted that the Assessing Officer had not disputed the sales and hence, it was not case of bogus purchases and at best it could be a case of inflation of purchases. The CIT(A) was of the view that gross profit shown by the assessee at 0.69% was very low in the particular kind of trade. Considering the facts and circums....
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....ifferent parties. In other words, the factum of making the purchases is not doubted. The basis of the Assessing Officer in rejecting purchases in the hands of assessee was the investigation carried out by the Sales Tax authority, under which it had compiled the list of bogus suppliers, who in turn, had stated to have only issued bills for supplies without making actual supplies of the goods to various beneficiaries. The list of beneficiaries was also drawn by the Sales Tax Department. The Assessing Officer has also taken note of the fact that before the Sales Tax Department, the said suppliers had also by way of affidavits confirmed that they were only issuing bills without making any supplies of goods. In the case of assessee, in view of the above said information, reopening of assessment was made under section 147/148 of the Act. The Assessing Officer show caused the assessee to justify the purchases made by it from the alleged hawala parties. The assessee was show caused in this regard and was also asked to produce the persons. The assessee was unable to produce the same. The assessee claims that it produced the affidavits from three dealers from whom it had made the purchases, ....