TaxTMI 
TaxTMI 
2025 (12) TMI 801
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....t by issuing notice under Section 148 of the Act on 04.11.2015, which was not complied with by the assessee. Again, reminder dated 08.12.2015 was given, which was complied with by submitting a letter dated 28.02.2016, that original return filed on 30.09.2013, and revised on 02.02.2016, may be treated as return filed in response to notice u/s 148 of the Act. Thereafter, notice under Section 143(2) and 142(1) of the Act were issued along with questionnaire calling for the copy of bank account/statement along with details of deposits therein. Accordingly, assessee provided the bank statement of current account number 1539 with PNB Ramgarh Branch. The learned Assessing Officer noted that as per the investigation conducted by the ITO (I & CI) report, there was a huge deposit in the name of Mr. Annad Agarwal and Amit Purohit and then the cash was transferred to the current account of M/s Mahalaxmi Steel and then advanced Rs. 2,49,79,400, to the assessee's account. Thereafter, during the assessment proceeding the learned Assessing Officer noted that the assessee has stated that it had received payment to the tune of Rs. 4,16,27,400/- from M/s Mahalaxmi Steel during the A.Y. 2013-14 and th....
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.... bank accounts without quoting PAN. On verification and through local enquiries conducted by the ITO (I&CI), it was revealed that all the three persons are fictitious/bogus as the query letters issued to them were returned un-served with the remarks "not known". On further perusal of the transaction in the bank accounts of the above persons it was noted that huge cash deposits were made and then on the very same day or on the next day, the cash was transferred to the current account of M/s Mahalaxmi Steels, Prop: Shri Shriram Naththu Kale, S/o Shri Naththuji Laharuji Kale, Balaghat. The report concluded that M/s Shri Mahalaxmi Steels is a bogus concern and never had any business activity at the address brought on record. The said bogus entity opened a current account bearing no. 9120200296338954 with the Axis Bank Limited, Chankhuri branch on 04- 06-2012 and during the period from 08-06-2012 to 15-01-2013 a total of Rs. 7,20,46,000/- was deposited in cash. Further deposits through RTGS /Cheques were also made by various bogus persons / entities as named in the assessment order. Hence the total amount of credit in the said current account was stood at Rs. 34,13,13,634/ which is incl....
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....es in the form ledger account of M/s. Mahalaxmi steels in the books of the appellant, Copy of bank statements, road permit issued by VAT Authorities, sales invoices detailing truck number, quantity, rate, CST, Form-C etc. submitted that the amounts credited in the bank account represents the sale consideration to the said party. However, inspite of all the documents submitted, Assessing Officer has not brought on record any evidence to prove that the transactions entered by the appellant which are otherwise supported by proper documents including third party documents are collusive/sham transactions so as to fasten the liability u/s. 68 of the Act. Further, the assessing officer having failed to bring on record any material to prove that the transaction of the appellant was a collusive transaction could not have rejected the evidences submitted by the appellant. Certain facts as narrated in the report of NIT(I&CI) may appear highly suspicious but cannot take the place of evidence, and hence the addition made on surmise and suspicion by debunking all the direct evidences cannot be sustained. Moreover, the AO failed to accord cross examination of the party on the basis of which impug....
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.... further investigations to confirm any such loan transaction. In view of the above, no error whatsoever, was found with the order of the Commissioner (Appeals), and therefore, the same was hereby confirmed. The Hon'ble ITAT, Jaipur Bench in the case of P.V. Jewellers Vs. ITO [1993] 45 TTJ 541 (JP) held that Where revenue had made additions under section 69 on basis of photocopies of documents, statements and oath given by a foreigner, such additions could not be sustained unless assessee had been given an opportunity either to see original documents or even to cross-examine party in whose books of account these entries were made. The Hon'ble ITAT, Mumbai Bench in the case of ACIT Vs. I & E Trade Consultants (P.) Ltd. [2017] 88 taxmann.com 638 (Mumbai-Trib.) held that- Where director of searched company gave statement that they were providing accommodation entries to assessee by way of paper entry of bills allegedly for providing services to assessee's customers, but said statement of searched person was not furnished by Assessing Officer to assessee nor cross-examination was allowed, challenge to reopening of concluded assessment by assessee was to be ....
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....during the year the learned Assessing Officer also noted that there were deposits of Rs. 34,07,12,420/- in the account of M/s Mahalaxmi Steel and the said party had also filed the return of income with the Department. We also note that the assessee was not given any opportunity to cross- examine person, whose statement was relied by the learned Assessing Officer to make the addition. Therefore, we do not find any infirmity or defect in the order of learned CIT (A) and accordingly, uphold the same by dismissing the appeal of the Revenue. The case of the assessee find support from the decision of the co-ordinate bench of this Tribunal in case of DCIT Vs. Sincon Infrastructure Pvt. Ltd. in ITA No.212/PAT/2025 for A.Y. 2021-22, vide order dated 26.08.2025, wherein the similar issue has been decided by the assessee by observing and holding as under: - "2.3 After hearing the rival contentions and perusing the materials available on record, we find that in this case the assessee has made purchases from the seven parties aggregating Rs. 4,98,11,922/- which according to the AO have not filed their returns of income and also have not replied to the notices under section 133(6) of th....