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Income Tax Officer, Mumbai Versus Shri Paresh Arvind Gandhi

2015 (7) TMI 362 - ITAT MUMBAI

Disallowance invoking the provisions of 69C - FAA deleted the addition - Held 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 .....

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ces of the case under appeal,we are of the opinion that the order of the FAA does not suffer from any legal infirmity and there are not sufficient evidence on file to endorse the view taken by the AO.So,confirming the order of the FAA - Decided against revenue. - ITA No. 5706/Mum/2013 - Dated:- 13-5-2015 - I. P. Bansal, JM And Rajendra, AM,JJ. For the Appellant : Shri Bhupendra Shah For the Respondent : Shri J Premanand, DR ORDER Per Rajendra, AM. Challenging the order dt.18/7/2013 of the CIT(A) .....

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ppellant's case are different from the facts of the above case law. 3.On the facts and in the circumstances of the case and in law, the ld.CIT(A) grossly erred in not appreciating the fact that notices under 133(6) issued to parties from whom alleged bills were received, were returned undelivered by the postal authorities. 4.On the facts and in the circumstances of the case and in law, the Id. CIT(A) grossly erred in not appreciating the fact that the assessee failed to produce the parties f .....

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iving income from business and other sourses. He filed his return of income on 28.9.10,declaring total income of ₹ 18.40 lacs. The AO completed the assessment u/s.143(3) of the Act on 1/3/ 2013,determining the income of the assessee at ₹ 1,56,05,880/-. The effective GOA is about deleting the addition of 1.37 crores made by the AO,u/s. 69C of the Act. During the assessment proceedings the AO directed assessee to furnish a list of persons from whom he had made purchases. He found that .....

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6. Vardhman Trading Company 46,73,578/- 7. Vitarag Trading Company 32,02,628/- Total 1,37,65,667/- In view of the above information,vide his show cause notice dt.6.2.13,the assessee was asked as to why the alleged purchase from the above mentioned sever parties aggregating to 1.37 crores should not be treated as unexplained expenditure. The AO provided the assessee the copies of statement recorded by the sales tax department.In response to the above,the assessee filed a letter dt.12.2.2013 and .....

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that same was not acceptable, that the sales tax department had carried out investigation about the above mentioned seven parties, that the sales tax authorities had concluded that those parties had not indulged in genuine sales/ purchase of goods,that the assessee had not produced the parties, that the purchases made by the assessee, per se,was not the issue, that the alleged purchases where not to be treated as bogus, that the assessee had not purchased the goods from the alleged suppliers, t .....

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he head unexplained expenditure,as per the provisions of sec. 69C of the Act. 3. Aggrieved by the order of the AO,the assessee preferred an appeal before the First Appellate Authority(FAA).Before him,it was contented that all material purchase and issuance made were duly recorded and accounted for in inward and outward movement register,that the assessee submitted material register before the AO showing the receipt of material from the parties mentioned in the show cause notice. He also furnishe .....

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e assessee relied upon the cases of Bajrang Oil (12 ITD 631), Milk Food (65 TTJ 848), M/s. Balaji Textile Ind.(49 ITD 117) and Nahar Spinning Mills Ltd. (8 SOT 6) After considering the submissions of the assessee and the assessment order,the FAA held that the purchases had been made through A/c.payee cheques that were duly reflected in the bank statement of the assessee, that the assessee had produced register of material purchased, copies of VAT returns,IT returns and confirmation of parties fr .....

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8), M/s.Balaji Textile Ind. (49 ITD 117); M.K.Brothers (163 ITR 249); Premanand (25 SOT 11). He further held that the assessee had produced the evidence of making payments from his bank account, that the source of the said money was not doubted by the AO, that the expenditure on purchases could not be treated as unexplained, that the assessee was not given any opportunity to cross examine above referred seven parties despite the fact that assessee had specifically asked the same.The FAA relied u .....

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/2013,dated 27.03.2015).He further argued that the payments were made through banking channels,that cross examination of the above referred seven parties was not allowed even though the assessee had requested for the same. 5. We have heard the rival submissions and perused the material before us.We find that the AO had not doubted the genuineness of the purchase but had made the disallowance of ₹ 1.37 crores invoking the provisions of 69C of the Act.We find that in similar circumstances th .....

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d upon the order of the G Bench of Mumbai Tribunal delivered in the case of Western Extrusion Industries.(ITA/6579/Mum/2010-dated 13.11.2013). Authrorised representative (AR) contended that payments made by the assessee were supported by the banker s statement, that goods received by the assessee from the supplie was part of closing stock,that the transporter had admitted the transportation of goods to the site.He relied upon the case of Babula Borana (282 ITR 251) , Nikunj Eximp Enterprises (P) .....

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