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Asstt. Commissioner of Income Tax-25 (2) Versus Shri Ramila Pravin Shah, Mumbai

2015 (3) TMI 1116 - ITAT MUMBAI

Unexplained expenditure made u/s 69C - CIT(A) deleted the addition - Held that:- AO was not justified in making the addition on the basis of statements given by the third parties before the Sales Tax Department, without conducting any other investigation

It has to be appreciated that (i)Payments were through banking channel and by Cheque,(ii) Notices coming back, does not mean , those Parties are bogus, they are just denying their business to avoid sales tax/VAT etc, (iii) Statement b .....

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- Dated:- 5-3-2015 - SHRI B.R.BASKARAN (AM) AND SANJAY GARG, (JM) For the Petitioner : Shri Love Kumar For the Respondent : Shri Bhupendra Shah ORDER Per B.R.BASKARAN, Accountant Member: The appeal of the Revenue is directed against the order dated 21.5.2013 passed by the ld.CIT(A)-35, Mumbai and it relates to assessment year 2010-11. 2. The revenue is aggrieved by the decision of ld.CIT(A) in deleting the disallowance of ₹ 28.08 lakhs relating to unexplained expenditure made u/s 69C of th .....

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out doing actual business. The AO noticed that the assessee made purchases to the tune of ₹ 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. .....

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e ld. CIT(A) deleted the addition and hence the Revenue is in appeal before the Tribunal. 5. The ld. DR strongly placed reliance on the order of Assessing Officer. 6. On the other hand, the ld. AR submitted that the additions made in the case of some other assesses on identical reasons have been deleted by the Co-ordinate Benches of the Tribunal in the following cases : a) Ramesh Kumar and Co V/s ACIT in ITA No.2959/Mum/2014 (AY-2010-11) dated 28.11.2014; b) DCIT V/s Shri Rajeev G Kalathil in IT .....

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f statements given by the parties before the Sales tax department. We notice that the ld.CIT(A) has properly analysed the facts prevailing in the instant case and for the sake of convenience, we extract the same below:- 5.3.11. I have also gone though the judicial pronouncements relied upon by the Ld AR and find that the facts of the above referred judicial pronouncements are similar to the present facts of the case and, therefore the ratio of judgments of the above referred two cases are fully .....

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d, the Purchases cannot be treated as ingenuine in those cases where the appellant had submitted all details of purchases and payments were made by cheques, merely because the sellers/suppliers could not be produced before the A.O. by the assessee. Further, I have also gone through the judgment in case Balaji Textile Industries (P) Ltd. Vs Income Tax Officer by Hon. ITAT, Mumbai (1994) 49 lTD (BOM) 177 which was made as long back as 1994 and which still holds good in which was held that- "I .....

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, could not be discarded merely by saying that they were not genuine ent r i es though nei ther the As ses s ing Of f i cer nor the Commissioner (Appeals) opined anything in respect of those entries. Further, the purchase of the goods in the month of March 1985 did not make any di fference. 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 .....

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