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2016 (2) TMI 504 - ITAT MUMBAI

2016 (2) TMI 504 - ITAT MUMBAI - TMI - Bogus purchases - Held that:- FAA had raised certain objections like supply of goods for a particular period, absence of delivery challans or impossibility of production of finished goods. But, he had not given reasons for arriving at such conclusions. The assessee had produced all the delivery challans along with the inward register. The suppliers of the raw material had specifically mentioned that delivery was made at the work place and that they did not .....

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he 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 the CIT (A)-22, Mumbai the assessee has filed the present appeal. Assessee-company, eng .....

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s from Sendoz Steel (SS) and Ronak Industries (RI). As per the information received from Maharashtra Sales tax department purchases made by the assessee, from both the parties, were not genuine. He issued a show cause notice to the assessee as to why the purchases from SS and RI should not be treated as bogus. After considering the submissions made by the assessee, the AO added a sum of ₹ 1.47 Crores to the total income of the assessee and held that the suppliers had provided bills only an .....

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r 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 app .....

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nly on 31.03.2010, that invoices of GIL were raised only in the months of December, 2009 to January, 2010, that there was no possibility of aluminium being used for the transmission material supplied by SS, that in the case of KIL raw material was purchased in the month of February that the goods were claimed to be manufactured in March, that considering the time gap it was not possible for the assessee to manufacture the same, that the assessee had not purchased any goods from RI in earlier yea .....

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the AO. 4. During the course of hearing before us, the Authorised Representative (AR) of the assessee argued that the assessee had produced all the challans 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/ap .....

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submissions and perused the material before us. We find that the assessee had claimed to have purchased raw material from SS and RI, that it had supplied goods to KIL and GIL, that the Sales Tax Department had informed that the suppliers of raw material were providing hawala entries, that the AO made the addition to the income of the assessee treating the transactions with SS and RI as bogus purchases, that the FAA had confirmed the addition, that the assessee had furnished various documents bef .....

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also found that RI had made 'free delivery' at Pondha Factory of the assessee. It is also a fact that all the payments were made through the banking channels and AO has not brought evidence that money has travelled back to assessee's account. Page No.62-78 of the Paper Book provide detail of vehicle nos., challan nos., names of supplier of goods, particulars of material, net weight of the goods etc. We have also gone through the return of income and sales tax return filed by SS. The .....

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tigation about alleged bogus purchases after receiving information from sales tax department, so we are of the opinion that his order cannot be endorsed. We find that the FAA had raised certain objections like supply of goods for a particular period, absence of delivery challans or impossibility of production of finished goods. But, he had not given reasons for arriving at such conclusions. The assessee had produced all the delivery challans along with the inward register. The suppliers of the r .....

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he 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. Here, we would like to refer to the order of Rajeev G. Kalathil (ITA No. 6727/Mum/2012, dt.20.8.2014) wherein in similar circumstances the Tribunal has held as under : "2.4. We have heard the riva .....

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