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2016 (2) TMI 504

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..... ve not made any enquiry with the recipient of the finished goods. In our opinion, the information received from sales tax was a good starting point for making further investigation, but it was not taken to the logical end. If the evidences produced by the assessee are vague against the conclusions drawn by the AO/ FAA it becomes clear that the assessee had discharged the burden cast upon it. Therefore, reversing the order of the FAA we decided the effective Ground of appeal in favour of the assessee - ITA No. 2771/Mum/2014 - - - Dated:- 3-2-2016 - Rajendra, AM And Ram Lal Negi, JM For the Appellant : Shri V G Ginde For the Respondent : Pradeep Kumar Singh ORDER Per Rajendra, AM Challenging the order dt.03/02/2014 of .....

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..... d. (KIL), copy of sales bills and purchase order from Gammon India Ltd. (GIL), copies of ledger of SS and RI along with the copies of purchase bills, delivery challans and goods inward registers. It was claimed that the payments were made through banking channels, that steel and aluminium were purchased to complete the purchase order/work orders from KIL and GIL. After considering the submissions of the assessee and documents and the assessment order, he held that the assessee had purchased aluminium from RI and steel from SS, that copy of contract/work order was furnished during the appellate proceedings, that that the work order of KIL was of ₹ 5.89 Crores, that work order of GIL was of ₹ 4.01 Crores, that that GIL had given a .....

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..... lans before the tax authorities, that the inward register was made available to the AO/FAA, that the transportation charges were paid by the seller, that the IT and VAT returns of SS were filed by the assessee, that sales were accepted by the Department, that the delivery challan with regard to KIL and GIL were furnished during the assessment/appellate proceedings, that no investigation was made with regard to the turnover of the assessee, that the goods from SS were purchased for two AY.s. He referred to Page Nos. 26, 27, 62-78, 79-91 and 24-51 of the Paper Book. He relied upon the case of Shri Hiralal Chunilal Jain (ITA/4547/Mum/2014 AY.s 2009-10, 2010-11 dt.1.1.2016). The Departmental Representative (DR) supported the order of FAA and st .....

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..... the goods etc. We have also gone through the return of income and sales tax return filed by SS. The assessee has also placed on record the agreement entered with KIL and GIL. Ignoring all these documentary evidences, the AO had made the addition solely relying on the information supplied by the Sales Tax Department. We do not know as to whether the statements of the directors/partners of SS and RI were recorded or not by the Sales tax authorities. It is also not known as to whether they had alleged that the assessee had purchased the goods from them. As the AO had failed to carry out any investigation about alleged bogus purchases after receiving information from sales tax department, so we are of the opinion that his order cannot be endors .....

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..... epartment. 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 Industries. (supra)is concerned, we find that in that matter cash .....

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