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M/s ZV Steels Pvt Ltd Versus DCIT, Circle 7 (3) , Mumbai

2015 (7) TMI 318 - ITAT MUMBAI

Validity of reopening of assessment - Held that:- The assessee was duly provided the copy of reasons recorded for issuance of notice under section 148 of the Act on 16.04.2013. In para 4.2 of the assessment order, it has also been mentioned that the AO had specifically asked the A.R. of the assessee whether he has any objection for issuance of notice under section 148 of the Act, and in reply to that the Ld. A.R. has stated that he was not taking any objection in relation to reopening of the ass .....

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eve that the income of the assessee relating to the purchases made from the above three parties had escaped assessment. Moreover, as stated above, the assessee had not raised any objection relating to reopening of the assessment during the assessment proceedings. We, therefore do not find any infirmity in the order of the Ld. CIT(A) in upholding the action of the AO for reopening of the assessment under section 147 of the Act. - Decided against assessee.

Addition on bogus purchases - .....

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sales, gross profits and net profits and there being no incriminating material or discrepancy in stock found at the time of survey have not been examined by the AO. The matter is therefore restored to the file of the AO for the purpose of verification of the above documents and if the above contentions of the assessee are found to be correct from the evidences submitted, the additions in this case on account of bogus purchases will not be warranted.- Decided in favour of assessee for statistical .....

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nvolved therein are identical in nature, hence the same are taken together for disposal with this common order. For the sake of convenience the facts have been taken from ITA No.6091/M/2014 for A.Y. 2008-09. ITA No.6091/M/2014 for A.Y. 2008-09 2. The assessee has taken the following grounds of appeal: "1. Upholding the validity of the re-assessment order u/s 143(3)/147 despite the fact that the assessment was completed u/s 143(1), that the primary information concerning the re-assessment wa .....

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he assessee the right to challenge this information. iii. merely on the alleged admission made by these 3 parties to the Sales Tax authorities that they were in the business of giving accommodation bills, without giving the assessee an opportunity to cross-examine these parties. iv. despite the fact that the assessee had requested the AO to issue summons to these parties for verification, for which the parties' new address was also given. v. without considering that all purchases were made b .....

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, copies of bank statements of Union Bank of India evidencing payments to these parties, copy of bills of the transporter Manoj Transport along with bank statement, monthly quantitative statements and inventory of closing stock. viii. Merely because there is no mention of stock register in the Tax Audit Report ignoring that quantitative details of stocks was given in the Tax Audit Report as well as in the notes to the audited financial statements and all the basic details that go into the stock .....

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x Act, (ii) agitating the addition of ₹ 1,15,63,283/- made by the Assessing Officer (hereinafter referred to as the AO) on account of bogus purchases. 4. The brief facts of the case are that the assessee is a wholesale dealer of CRCA coils. During the year under consideration, the assessee had purchased goods from various parties and also sold the goods to various parties. The aggregate value of the purchases made during the year was at ₹ 37,88,51,683/- which inter-alia included purc .....

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of the assessee on 13.12.2012. In the course of survey proceedings, it was found that the assessee company has entered into transactions with the parties who according to sales tax department used to issue bogus bills and did not supply the material. The alleged bogus dealers even did not pay any VAT on the sales made to the assessee. The AO therefore recorded the reasons that the income arising from the purchases shown by the assessee in the name of three parties namely M/s. Ali Steels, M/s. Ru .....

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A.R. of the assessee whether he has any objection for issuance of notice under section 148 of the Act, and in reply to that the Ld. A.R. has stated that he was not taking any objection in relation to reopening of the assessment under section 147 of the Act. Thereafter, a notice under section 142(1) was issued to the assessee to furnish the required details. In this case, a specific information was received by the Income Tax Authorities that certain parties were engaged in issuing bogus bills fo .....

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o not find any infirmity in the order of the Ld. CIT(A) in upholding the action of the AO for reopening of the assessment under section 147 of the Act. This issue is accordingly decided against the assessee. 6. The second issue is relating to the addition made in the hands of the assessee on account of bogus purchases. During the assessment proceedings under section 147 of the Act, the assessee provided evidences to prove the genuineness of the purchase transactions including the details of the .....

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eceived such goods and having consumed. b) That the assessee did not make any request for cross examination. c) The assessee has also not produced its Stock Register. d) The assessee has also failed to produce any satisfactory evidence to show actual purchase of material, its transportation and consumption details." Aggrieved by the order of the AO, the assessee preferred appeal before the Ld. CIT(A). 7. The Ld. CIT(A), however, observed that there were certain discrepancies/blank columns i .....

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before us. 8. The Ld. A.R. of the assessee, before us, has submitted that the statement if any, made by the M/s. Ali Steels was made before the Sales Tax Authorities no such statement had been recorded in this respect by the Income Tax Authorities. The assessee was not given opportunity to confront the said persons by way of cross examination. The assessee had specifically requested the AO to issue summons to the said parties for verifications. All the payments were made through cheques which we .....

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tative details of the stocks were given in the audit report as well as in the notes to the audited financial statement and therefore all the basic details that go into the stock register were duly submitted before the AO. He has further contended that even the sales made from these purchases and the profit thereupon was accepted by the AO. He has also relied upon the decision of the Hon'ble Bombay High Court in the case of "CIT v. M/s. Nikunj Eximp Enterprises Pvt. Ltd." ITA No.560 .....

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ended that during the survey action conducted at the premises of the assessee, no incriminating evidence was found against the assessee. The assessee had made all the purchases through banking channel. The assessee has further contended that the copies of the invoices even the bills of the transporter and the evidences of the payment made including bank statements of the respective parties had been produced before the AO. He has further contended that the assessee had also produced the monthly q .....

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uent year has been shown of 3.23%. The gross profit for the A.Y. 2008-09 & A.Y. 2009-10 are more than that of the earlier three assessment years. The net profit for the year under consideration has also increased to 0.447% of the sales from that of 0.385% declared for the previous assessment year. The net profit has also been declared at the same rate for the subsequent year also. So far the question of purchases is concerned, there is corresponding increase in sales also. The Ld. A.R. has, .....

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was no evidence that the said concerns gave bogus vouchers to the assessee and even the statements made by the alleged suppliers in no way implicate the transaction with the assessee then under such circumstances it cannot be said that entries for the purchase of goods made in the books of account of the assessee were bogus and no addition in this respect can be made. 10. We agree with the contention of the Ld. A.R. that solely on the basis of unconfronted and general statements of alleged supp .....

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