TaxTMI 
TaxTMI 
2018 (3) TMI 2034
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....rties by the Sales Tax Department, only because these five parties had not paid VAT collected on the sales made to the assessee. 5. Before the AO, assessee furnished following documents to substantiate the genuineness of the purchases. 1. Photocopies of Purchase bills 2. Reconciliation of Stock Statement showing inward & outward movement of materials 3. Bank Statements depicting transactions made by way of Account Payee cheques & through banking channel only 4. Ledger Accounts of parties 5. Itemwise Quantitative details of purchases and sales. 6. However, AO made the addition of the purchases on the ground that VAT authorities have treated the sales as non-genuine since these suppliers had not paid VAT on the sales effected by them. Accordingly AO made addition of Rs. 2,16,32,006/-. 7. By the impugned order, CIT(A) deleted the addition after observing as under:- "6.3.2. I have considered the stand of the AO in the assessment order as well as the submissions of the appellant. I have also considered the judicial pronouncements referred and relied upon by the appellant. 6.3.2. The addition has been made on the bas....
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....ng VAT in the government treasury which does not mean that the purchases from these parties were bogus, since the parties could have given false statement to save them from the action of the Sales Tax Department. I find that the AO cannot make any addition just on the basis of presumption. Suspicion, however strong cannot take place of proof. This principle is reflected in the following judicial pronouncements; * Umacharan Shaw & Bros v. CIT (37 ITR 271) (SC) * Dhakeshwari Cotton Mills v. CIT (26 ITR 775) (SC) * SbeoNarainDuli Chand v. CIT (72 ITR 766) (All.) 6.3.4. It has been explained by the appellant that during the assessment proceedings, the assessee had requested the AO to give them copies of all the materials/ information/evidences, on the basis of which the AO has formed his opinion to make disallowance of above referred purchases. However, no such materials were supplied to the assessee before using the same against it. The submission of the appellant is that this was a clear violation of principles of natural justice and therefore the addition made by the AO and the impugned assessment order is unconstitutional and void. The appellant ....
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....ever be the basis upon which the AO has formed opinion to make disallowance of above purchases because any concrete the basis of addition except mere statement of suspicious dealers before Sales-tax authorities, were not supplied to the assessee for effective countering. Similarly, copies of Return of Income, Profit & Loss A/c, Bank statements and copy of ledger account in the books of accounts of such suspicious dealers have not been requisitioned by the AO and put across assessee for cross-verification or rebuttal. Since these were not provided to the appellant by the AO, this has led to violation of natural justice and non-providing of opportunity for cross examination and countering the conclusions of Sales-tax Department of Govt. of Maharashtra as well as the alleged suspicious dealer. 6.3.6. It has been vehemently argued by the assessee that the AO did not appreciate the evidence adduced by the appellant to substantiate his purchases from the said parties, including details such as details of bill-wise purchases; ledger accounts of the parties in question; copies of all purchase invoices and delivery challans of all the parties, copies of bank statements substantiati....
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.... ii) Statement of hawala dealers were made behind the back of the appellant. That the main reason for making disallowance of purchases from the said party claiming the same to be bogus purchases are based on the list of hawala dealers party as per the department. The said parties have been treated as hawala dealers on the basis of information and materials collected the back of the assessee. The said information and materials have been used against the assessee, that too, without giving any copy thereof and without giving it any opportunity to cross examine the said parties. The impugned assessment order is therefore in violation of principles of natural justice and hence bad in law on that score alone. iii) The appellant has asked for copies of various relevant documents found basis of addition. However, the AO has chosen to proceed without providing copy of any such documents. The AO has chosen to believe the statements of suspicious dealers to be sacrosanct which was taken behind the back of the assessee by the Sales-tax authorities, while ignoring the documents adduced before him/her by the assessee. iv) the Courts have laid down that while the AO has fu....
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....r enquiry and investigation and without reaching the logical conclusion. The finding of the Assessing Officer that sales tax registration no. had nothing to do towards that end was also neither correct nor tenable. The sales -tax registration nos. were printed on the bills. So it was the bounded duty of the Assessing Officer to enquire from the sales-tax department as to whether those sales tax registration nos. were allotted to non-existent persons or existing ones and whether the sales tax was collected and deposited and deposited into the Government exchequer or not, and if yes, by whom Such an inquiry should have been made by the department in order to know the truth, Failure to do so on the part of the Assessing Officer indicated that his observations and findings in respect of sales tax registration nos. were not based on solid material and cogent evidence. The assessee had furnished all the details and particulars of purchase and sales item-wise, amount-wise, quantity-wise, quantity-wise, stock folio-wise and had linkage and correlation between the purchases and sales. The assessee had explained that goods were purchased, materials were consumed and thereaf....
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....olio-wise and amount-wise and also Government order number-wise and the Assessing Officer had not any defects, irregularity and discrepancy in the statements and books of account, bills and vouchers, produced before him. These statement, giving all relevant particulars and details, were good pieces of evidence duly supported by books of account and unless and until they were controverted/:or their contents were disbelieved or disturbed by pointing out defects or by proving the defects with positive evidence, purchases could not be declared to be bogus. Thus the Assessing Officer was not justified in declaring the purchases to be bogus for the reasons given by him. The assessment order would show that the Assessing Officer was not sure of making a well-determined addition on account of bogus purchases. Firstly, he presumed the bogus purchases but when he was confronted with sales to a Government department along with purchases, he switched over to the presumption of concealed stock. But again, when he found that on the basis of the actual facts and figures, he might not succeed in applying the theory of concealed stock, he jumped to the third presumption of inflate....
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.... it was for the AO to further correspond with the sales-tax authorities asking them as to whether they had initially been giz>en sales-tax registration number without enquiring the addresses of the parties, the KYC details from their bank accounts and their earlier conduct regarding payment of VAT before tliey defaulted in paying VAT taxes. No adverse finding from the Sales-tax authorities on this score have been received by the AO nor such enquiries were conducted by the AO in respect of facts narrated above. (v) In the case of the appellant, the AO has used general information collected by the Economic Intelligence Unit of the Sales-tax department. No copy of whatever information received has been given to the appellant. No opportunity has been given to the appellant to rebut the same. The said information is used against the appellant and the purchases have been straightway treated as bogus. The AO has not allowed the appellant to cross examine the said parties. Under the circumstances the circumstances the addition / disallowance made by the AO, to the income of the appellant, treating purchases from the parties in question as bogus, cannot withstand the test of judici....
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....eliability. In the instant case, the Income-tax Officer made no independent enquiries and merely relief on the copy supplied by the sales tax department. In the earlier part of this judgment, the entries form the UchantiBahi communicated to the Income-tax Officer had been set out and these entries show that no particular had been given as to the transactions to which those entries related. The nature of the transactions between the parties was also to be investigated, in order to find out whether the assessee ]iad any occasion to pass on cash to G when the case of the assessee was that they used to sell iron and steel goods manufactured by Tatas. There was no material on the record for the Income-tax Officer to reach the conclusion that the amount in question had been passed on by the assessee-firm in cash to G. The Income-tax Officer also did not have the advantage of seeing the UchantiBhai, entries from which had been supplied to him, in order to find out whether that Bahi was a reliable document. He had admittedly not recovered it from G nor was it shown on this record as to who recovered it from that firm. No official of the sales tax department was examined to know about this ....
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....rossexamination. (vi) principle of natural justice has not been followed in the present case. The law requires that quasi judicial authorities should observe rules of natural justice in the conduct of the enquiry and if they do so, their decision is not liable to be impeached on the ground that the procedure followed was not in accordance with that which obtain in a court of law, stating it broadly and without intending it to be exhaustive, it may be observed that rules of natural justice require that a party should have the opportunity of adducing all relevant evidence on which he relies, that the evidence of the opponent should be taken in his presence find that he should be given the opportunity of crossexamining the withness examined by that party and that no material should be relied against him without Ins being an opportunity of explaining them, (Union of India vs. T R Verma AIR 1957 SC 882). (vii) In the case of State of Kerala vs. K T ShaduliYusuff (1977) 39 STC 478, 481 (SC), the Hon'ble Supreme Court has pointed out that the law is well settled that tax authorities entrusted with the power to make assessment of tax discharge quasi judicial functions....
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.... Tribunal (1987) 167 (1TR) 498 (SC) 498 (SC). In the present case, addition are merely base on the affidavit of third parties. It well known that affidavits are nothing more than a self-serving document. (xii) The Hon'ble Supreme Court in the case of Swadeshi Cotton Mills Co. Ltd vs Union of India (1981) 51 Comp Cas 210,255 (SCI and Hon'ble Gujrat High Court in the case of CIT vs. Vimlaben Bhagwandas Patel 118 ITR 134, 184 (Guj) have observed that aquasi judicial decision rendered or an order made in violation of the audialterampartem rule in null and void and the order impugned in such a case can be struck down as invalid on that score alone." 6.3.10. It has not been disproved by the AO that the suspicious parties in question were, at the time when the purchase were made, were holding a valid and lawful registration MVAT Act 2002 and the CST Act. The Sales Tax Department issues a registration certificate after strict verification of identity of the party, its place of business and place of residence, Bank account proof, Ration Card, Rent Receipts, Electric Bills and such various other documents. And after the registration certificate is issued. The office....
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.... considered in right perspective: The appellant explained that it had submitted copies of all purchase bills, ledger accounts, bank statements for the purchase made from these parties before the AO, Same were also produced during the proceedings also and from these documents it will be difficult to hold that the purchase from the parties in question were in genuine or bogus. 6.3.12, No discrepancy has been pointed out in the books of accounts nor the same were rejected by the AO for any good reasons. It has been explained by the appellant that although all the facts and evidences, bills, vouchers, books of accounts, bank statements etc. were adduced by the appellant during the assessment proceedings and verified by the AO, but the later those to make the disallowance of purchases from these parties, that too without rejecting the books of accounts and without disbelieving any sales of the appellant. The AO made additions on the basis of information of alleged Hawala dealers provided by the Sales Tax department on the basis of declaration/affidavits which were collected behind the back of the appellant and no copy thereof/ was given to the appellant either before or after u....
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.... of Orient Trading Co Ltd v CIT (49 ITR 723), Patna High Court in the case of Sarogi Credit Corporation v CIT (103 ITR 344), Madras High Court in the case of CIT v Gani Silk Palace (171 ITR 373), Allahabad High Court in the case of Daya C hand Jain Vaidya (98 ITR 280), it will not thereafter be for the assessee to explain further. The burden will shift on to the AO to show why the assessee's case cannot be accepted, but the same has not been discharged. It is well settled that a disallowance, without any valid reasons and without pointing out excessiveness or infirmity is not justified. Reliance is made and reference is placed on Neha Proteins Ltd. v. Asst. CIT 83 TTJ (Jd.)236, Speed Carries v. ITO (1987) 27 TTJ (Ahd) 387, Beta NaphtholOvt Ltd. v. Asst. CIT 50 TTf (Ind.) 375, Jupiter Textiles v. ITO (2002) 77 TTJ (Jd) 735.) Hence the disallowance made in the case of the appellant by the AO without pointing out any excessiveness or infirmity cannot be held as justifiable. 6.3.14. The AO has the ample authority vested by law in him/her, to issue summons to the parties and enforce attendance and requisite compliance. But the notices u/s 133(6) or 131 were not enf....
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....- "We have heard the rival submissions and perused the material before us. We find that AO had made the addition as one of the supplier was declared a hawala dealer by the VAT Department. We agree that it was a good starting point for making further investigation and take it to logical end. But, he left the job at initial point itself. Suspicion of highest degree cannot take place of evidence. He could have called for the details of the bank accounts of the suppliers to find out as whether there was any immediate cash withdrawal from their account. We find that no such exercise was done. Transportation of good to the site is one of the deciding factor to be considered for resolving the issue. The FAA has given a finding of fact that part of the goods received by the assessee was forming part of closing stock. As far as the case of Western Extrusion (supra) is concerned, we find that in that matter cash was immediately withdrawn by the supplier and there was no evidence of movement of goods. But, in the case before us, there is nothing, in the AO, about the cash trial. Secondly/ proof of movement of goods is not in doubt. Therefore, considering the peculiar facts and circum....
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....ame are stated as under by the Id, CIT(A) : "3. Ground No.l is against the addition of Rs. 1,74,01,436/- on account of bogus purchases. Brief facts in this regard are that during the assessment proceedings, inquiries were made u/s 133(6) from various parties from where the assessee has sliown purchase of metals. The notice issued to the five parties ie. M/s Montex Industries, M/s Roshan Steel Impex, M/s Mokesh Metal and Tubes, M/s Viraj Steel and Alloys and M/s Shivam Metals Industries returned back by the postal authorities with a remark "not known". Accordingly, the AO issued show cause notice to the assessee as to why the purchases from these parties should not be treated as non genuine and the same should not be added back. In response to the said notice, the assessee furnished ledger copy of purchases, signed by the respective parties and copies of sample purchase bills along with a few delivery challans and claimed that the purchases are genuine. However, the AO further inquired this matter through on the spot field inquires by the Inspector, who submitted that none of the parties exists at the given address and the inquiries with the nearby shops revealed that nobody is awar....
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....same would have been sourced out of undisclosed income of the assessee, in which case the provisions of sec. 69C of the Act would be attracted. Even though the assessee furnished a detailed reply in response to the remand report and also placed reliance on various case law, yet the id. CIT(A) concurred with the view taken by the AO. The Id. CIT(A) also concurred with the view of AO that the assessee would have made purchase from the grey market and such purchases would have made in cash resulting in violation of the provisions of section 40(A)(3) of the Act. He also agreed with the view taken by the AO that assessee has not explained the sources for making such purchases and hence the aggregate amount of purchases is liable to be assessed as unexplained expenditure under the provisions of section 69C of the Act. Accordingly, the Id. CIT(A) confirmed the addition made by AO on this issue. 6. We have heard the rival contentions on this issue and perused the record. The- AO placed reliance on the written submissions furnished before the Id. CIT(A) whereas the ld.:DR:placed strong reliance on the orders of authorities below. We notice that the assessee has furnished following ....
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....dditional evidences in paper book-Il as under : 1-TIN allotment letter in case of Montexlnds. 265-266 2 Acknowledgment of filing E returns with sales tax department alongwith registration under CST in case of Rohan Steel Impex. 267268 3 Acknowledgment of filing E returns with sale tax challans in case of Moksh Metal Tubes f269~270 4 Acknowledgement of filing E returns with sales tax and certificate of registration under CST and VAT in case of Viraj Steel Alloys 271-272 5 Acknowledgement of filing E returns with sales tax and certificate of registration under CST in case of Shivam Metals 273-275 6 Letters from RBS bank for clearing of cheques in names of 5 parties, dated 6.8.2012, U.8.12;25.6,12,18.7.12,17.7.12 276.303 7 Bank statement duly certifying the payments been made to parties 304 8 Certificate from depart of sales tax showing cancellation of registration by the parties 305-309 9 Ledger account of Hamali and cartage exp. Along with vouchers 310-318 F. The details of purchase and sales were submitted this once the sales are accepted the purchases cannot be doubted. Without prejudice to above once payment are made by account payee cheques no disallowance could be made merely b....
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....ales-tax and the acknowledgement are produce. In view of the above facts the assessee has discharged the nous of proof, therefore no addition should be made. Without prejudice to above if at all the addition can be sustained then it should be at net profit ratio in respect of purchase. Further once quantitative tally of sales is furnished, the same should be accepted (pg.78-107 of the written submissions). It is not open for AO to disregard the same. a. Babulal C Borana V/s ITO 282 1TR 251 (Bom) Where the identity of the persons from whom goods are purchases has been explained, payment are made by account payee cheques, transactions are recorded in books, no addition can be made.. ITO V/s Suhana Trading 92 ITD 212 (M.um)(para 98) Where a quantitative tally of sales is furnished, even if purchasers are not available, no addition could be made merely on assumptions or presumptions or surmises or conjectures. C, CIT V/s Leaders Valves (P) Ltd 206 CTR 463(P&H) Commissioner (A) deleted additions made by AO on account of bogus purchase from seven parties as also addition in trading account besides allowing triple shift allowance on machinery etc Tribunal concurred, with analysis and conc....
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....dustries and M/s Rohan Steel Impex since these partiers were having account with the said bank. The Id. AO has also mentioned that the Bank statements of the above parties provided by the Bank of Baroda, should that there was an immediate cash withdrawal against the cheque deposits. Your honour's attention is drawn to the fact that Bank of Baroda had provided tlie necessary details of the four parties with respect to the date of opening account numbers, bank statements etc. The existence of these parties is thus justified by an external indirect confirmation obtained by the Id. AO. Since the banks have mandated the KYC documents, the existence of these parties cannot be rules out merely on the report of the Inspector. The assessee cannot be penalized if the other party enters in any dubious transactions. The assessee as a purchase is concerned with the goods and the only obligation remains is to make the payment. Since the assessee does not have to recover money from these parties, hence he is not required to confirm on their creditworthiness. Moreover the assessee cannot sit over and investigate the genuineness of the party or their business transaction. The assessee as a busi....
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.... were not available in the given addresses. It is pertinent to note that the AO himself, during the course of remand proceedings, have obtained the bank statements of the above said five parties is in the common knowledge of everybody that the bank account, now a days, could be opened only on submission of proper documents. Further the assessee has furnished the Sales tax documents of the above said five parties and also their income tax details to prove their existence. Thus, it is seen that the assesses has furnished many documents to prove the existence of the parties and they have not been controverted by the assessing officer. 8. Be that as it may, another important factor the bank account copies collected by the assessing officer shows that the assesses had made the payments to the above said parties by way of account payee cheques. Thus, it is seen that the transactions have been routed through the bank accounts. Further, it is not the case of the assessing officer that the assessee has indulged in accounting of bogus purchases. Wlien the assessee submitted that he could not have effected the sales without making corresponding purchases, the AO has taken the view th....
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....ness. The AO noticed that the assessee made purchases to the tune of Rs. 28.08 lakhs from some of the parties, whose names found place in the list provided by the Sales Tax Department. The AO also considered the statements taken by Sales Tax Department from some of the parties. During the course of hearing, the AO deputed Inspector of Income Tax to serve notice u/s 133(6) of the Act. However, the Inspector reported that these parties were not available at given address. The AO also asked the assessee to submit delivery challans and stock register to prove the movement of stock and also asked to produce these parties. However, the assessee failed to furnish the details called for. Hence, by placing the reliance on the statements given by these parties before the Sales Tax Department, the AO took the view that the purchases to the tune of Rs. 28.08 lakhs have to be treated as unexplained expenditure. Accordingly, he assessed the same u/s 69C of the Act. 4. The Id. CIT(A) deleted the addition and hence the Revenue is in appeal before the Tribunal. 5. The Id, DR strongly placed reliance on the order of Assessing Officer. 6. On the other hand, the Id. AR submi....
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....ny at Bhiwandi was not a conclusive proof but it was a prima fade proof to arrive to a correct conclusion that the assessee purchased certain goods from certain parties at Bhiwandi. The assessee sold those goods to 'S' and adjusted the sale proceeds against the loan taken by it from that party. The assessee's books of account and the books of account of and the books of account of 'S' in which the entries of sale and adjustment were made, could not be discarded merely by saying that they were not genuine entries though neither the Assessing Officer nor the Commissioner (Appeals) opined anything in respect of those entries. Further, the purchase of the goods in the month of March 1935 did not make any difference. The assessee might not have carried on any business activities prior to March 1985, but that did not mean that the assessee was not entitled to carry on the business activity in March 1985. They could not be compelled to carry on the business activity throughout the year. There were no good reasons to disbelieve the sales made by the assessee to 'S'. No sales were likely to be effected if there were no purchases. A sale could be made if the goods were av....
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..... The AO noticed that the Sales Tax Department of Government of Maharashtra has listed out name of certain dealers, who were alleged to have been providing accommodation entries without doing actual business. The AO notice that the assessee made purchases to the tune of Rs. 38.69 Lakhs from two parties named M/s Umii/a Sales Agency Pvt. Ltd. and M/s Mercury Enterprises, whose names found place in the list provided by the Sales Tax Department. The AO placed full reliance on the enquiries conducted by Sales Tax Department in respect in Sales Tax Department in respect of the parties, referred above. Accordingly, the AO took the view that the purchases to the tune of Rs. 38.69 lakhs have to be treated as unexplained expenditure. Accordingly, he assessed the same u/s 69C of the Act. 11. The Ld. CIT(A) deleted the addition and hence the Revenue is in appeal before the Tribunal, 12. The Id. DR strongly reliance on the order of Assessing Officer. 13. On the other hand, the Ld. AR submitted that the addition made in the case other assesses on identical reasons have been deleted by the Co-ordinate Benches of the Tribunal in the following case : a) ramesh K....
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....orities. It is not in dispute that the survey action was conductedon a third party. It is also not in dispute that the assessee had business relation with Moxdiam Group, like so many other parties. It is also a fact that there is not even a iota evidence with the AO, to prove that the assessee did not have straight dealings with Moxdiam Group. It is also a fact that, that the assessee entered each of its transaction in its primary books, comprising of ledger and stock register. From the order of the AO, the DR could not establish before us that the transaction as recorded in the books was sham. We cannot accept a bald statement made by the AO 7 IT As 2239 & 2240/M/2012 M/s G V Sons ITA 2238/M/2012 M/s G.V Zaveri Rajpara that any transaction/business was also indulging in providing accommodation entries. Simply on the basis of statement given by the third party, that they were also proving accommodation entries as well, the conduct of the assessee cannot be doubted and held to be sham. 18. The assessee had conducted business, this is proved by various books of account produced before the AO which were original and primary books and not even the afterthought of the assessee,....
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....having accepted the finding in principle that there was involvement of cash to have purchase made from Undisclosed/unverifiable parties and purchases for the concerns of Shri Rakesh Gupta and family was only accommodation entries and not by actual purchase. 2. The Ld. CIT(A) erred in law as well as fact by not sustaining any addition on the peak value of cash involved in making purchase from the so called unidentifiable parties u/s.69." The department has also raised an addition ground in their appeals for the assessment year 200-03 to 2007-08 which reads as under: "On the facts and in the circumstances of the case, the Id. CIT(A) after having accepted the fact that the purchase made from or through Shri Rakesh Gupta and his family members are bogus, erred in law in not confirming the addition at least to the extent of peak of the purchases made from such parties on account of bogus purchases made in cash from the open market out of unaccounted cash in view of the decision held in Ahmedabad Hon'ble ITAT's C-Bench decision decided in tire case Vijay Proteins ltd. Vs ACIT 58 ITD 428." Briefly stated, the facts of the case are that the Asses....
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....ribunal in the case of M/s. Jeetendra Harshadkuniar Textiles deserved to be followed. 6.1 The Id. DR could not bring not bring any distinguishing facts or decision per the DR agreed that facts and 'issues are identical with the facts and issues in the case of M/s. Jeetendrm Jarshadkumar Textiles. 7. We have perused the assessment order and the order of CIT(A). we have also perused order of the Tribunal Mumbai "I" Bench in the case of M/s. Jeetendra Harshadkumar Textiles In ITA N. 771 and 2211/Mum/2011 for assessment year 2007-08 dated 21/11/2012. We find force in the contentions of the counsel that the facts and circumstances are identical though the figures may differ. The Tribunal had given its finding at para-8 on page-5 of its order which reads as under:- 8. We have carefully considered the rival submission in the light material placed before us it will be relevant to reproduce the letter received by the AO from Shri Rakesh Kumar Gupta, which is also reproduced in the assessment order. "1 am in receipt of your summons u/s 131 of the l.T. Act 1961 in the case of M/s. Jintendra Harshad Kumar Textiles Pvt. Ltd. asking me to attend before you....
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....he facts and circumstance of the case, we are of the opinion that additions made by the AO deserves to be deleted in its entirety. We decide accordingly." 9.1. On identical facts, and issues, this Bench has decided the appeal in the case of M/s. C. Chotalal & Co. in ITA Nos. ITA No. 3960 to 3967/Mum/2012 for Assessment years 2002-03 to 2009-10 dated 24/09/13 wherein one us (the Accountant Member) is a party to the said decision. Since the facts and issued being identical, we have no hesitation in following the order of our co-ordinate Beach Respectfully following the same all the appeals filed by the Assessee are Partly allowed and all the appeals filed by the Revenue are accordingly dismissed. 9.2. As we have decided the appeal on merits of the case, we do not find it necessary to decide common ground No. 1 raised by the Assessee for alt the years under consideration as it is only of academic interest." (viii) The Hon'ble jurisdictional Bombay High Court in the case of CIT Vs. Nikunj Eximp Enterprises P. Ltd., as reported in (2015) 372 ITR 619(Bom) on similar issue of bogus purchases, have also deleted the additions made by the AO on account of so-called bogu....
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.... stock statement i.e. the reconciliation statement to conclude that the purchases were genuine. Therefore, he submits that the question formulated is a substantial question of law and needs to be decided by this court. 7. We have considered the submission on behalf of the revenue. However, from the order of the Tribunal dated 30/04/2010, we find that the Tribunal has deleted the additions on not only on the basis of stock statement i.e. reconciliation statement, but also in view of the other facts. The Tribunal records that the Books of Accounts of the respondent -assessee have not been rejected. Similarly, the sales have riot been doubted and it is an admitted position that substantial amount of sales have been made to the Government Department i.e Defence Research and Development Laboratory, Hyderabad. Further, there were confirmation letters filed by the suppliers, copies of invoices for purchases as well as copies of banks statement all of which would indicate that the purchases were in/act made. In our view, merely because the suppliers have not appeared before the Assessing Officer or the CIT(A), one cannot conclude that the purchases were not made by the respondent-....
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.... material, however slight, was on the income-tax authorities and not on the assessee. The facts before the income-tax authorities were not sufficient to shift the burden of proof on to the assessee, There facts did not necessarily justify any prima facia inference that the past capital produced income during the accounting year. Before such an inference could be drawn, some foundation must be laid for the assumption that there was income from such capital during the accounting year. Therefore, on the facts and in the circumstance of the case, the Tribunal erred on confirming the additions of amounts in question." The AO has, in the case of the appellant, made disallowance without any substantial and irrefutable material; such disallowance / addition, therefore, cannot be sustained in the eyes of law. 6.3.17. Thus, keeping in view the present facts of the case and applying the ratio of the decision of Hon'ble jurisdictional ITAT of Mumbai as well as jurisdictional High Court of Mumbai where various legal issues arising out of additions of similar nature have been thread-bare discussed and also other decision of Hon'ble ITAT/High Courts/Supreme Court, it wil....
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....ion from the past GP ratio results. In the present case the appellant during the appellant proceeding has submitted the statement of Gross Profit for last 3 year, which is as under: A.Y. G.P. Ratio 2007-08 2.41 2008-09 2.52 2009-10 4.59 On perusal of the G,P. chart for last 3 year, it is seen that the appellant has shown the higher G.P. during-the year under appeal as compare to the last 3 year. In nutshell the appellant has not understatement income during the year under appeal. Keeping in view all the facts and circumstances of the case as well as various judicial pronouncements including the decision of jurisdictional ITAT as well as High Court of Mumbai which are binding, I feel that the addition made by the AO for the reasons stated in the assessment order cannot be sustained. Accordingly, the addition of amount of Rs. 2,16,32,006/- is directed to be deleted. 8. Against the above order of CIT(A), revenue is in further appeal before us. 9. We have considered rival contentions and carefully gone through the orders of the authorities below and found from record that AO has made addition on the basis of information by the Sa....