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2015 (4) TMI 1080 - ITAT MUMBAI

2015 (4) TMI 1080 - ITAT MUMBAI - TMI - Unexplained expenditure relating to purchases - Held that:- The assessing officer has made the impugned addition only on the basis of information given by the Sales tax department, he did not make independent enquiry with the sales tax department, the assessee was not given opportunity to cross examine the officials of sales tax department, the evidences furnished by the assessee to prove purchases of sands and its movement were not disproved, the evidence .....

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y on the reasoning that the assessee has failed to furnish the details. The case of the assessee before the Ld.CIT(A) was that he was having all the relevant details. We notice that the first appellate authority has deleted this disallowance without verifying those details. Since this addition was made for want of evidences and details and since the details, if any, available with the assessee were not examined by the tax authorities, we are of the view that this issue requires to be restored to .....

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hri Love Kumar For the Assessee : Shri R S Sharma O R D E R Per B.R.BASKARAN, Accountant Member: The appeal filed by the Revenue and cross-objection by the assessee are directed against the order dated 7.5.2013 passed by the ld. CIT(A)-35, Mumbai and they relate to the assessment year 2010-11. 2. The revenue is aggrieved by the decision of ld.CIT(A) in deleting the following additions: a) Unexplained expenditure relating to purchases of ₹ 63,87,826/- and b) Adhoc addition from out of purch .....

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urnish the list of persons from whom the sand was purchased. The AO noticed that the assessee has purchased sand from certain persons who were listed by the Sales Tax Department of Government of Maharashtra as suspicious dealers, who indulged in issuing bogus bills without supplying goods. The aggregate amount of purchases made by the assessee from the parties listed out by the Sales Tax Department of Government of Maharashtra was ₹ 63,87,826/-. Accordingly, the AO proposed to assess the a .....

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f the assessee are not the issue here and these alleged purchases are not being treated as bogus. The Sales Tax Department has come down hard on the pernicious practices indulged in by these unscrupulous traders figuring in the list of suspicious dealers and it is evident that the assessee has not purchased the goods from these alleged suppliers. It is equally true that the goods have somehow entered in the assessee regular business. The assessee has been unable to give any convincing or cogent .....

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C and added to the total income of the assessee. Penalty proceedings u/s 274 r.w. 271 (1)(c) are separately initiated for concealing particulars of income 5. The Ld.CIT(A) noticed that the assessing officer has not disputed the fact of purchase of goods and further they have been duly recorded in the books of account. He further noticed that the assessing officer has made the impugned addition only for the reason that the name of the suppliers finds place in the list of suspicious dealers releas .....

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y he deleted the addition of ₹ 63,87,826/- made by the assessing officer. 6. We heard the parties on this issue and perused the record. We notice that this bench of Tribunal has considered an identical issue in the case of Deepak Popatlal Gala, in ITA No. 5920/M/13 and Tribunal, vide its order dated 27.3.2015, has held as under:- 10. The next issue relates to disallowance made out of purchases and assessed u/s 69C of the Act. We heard the parties and perused the record. The total purchase .....

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the list provided by the Sales Tax Department. The AO placed full reliance on the enquiries conducted by Sales Tax Department in respect of the parties, referred above. Accordingly, the AO took the view that the purchases to the tune of ₹ 38.69 lakhs have to be treated as unexplained expenditure. Accordingly, he assessed the same u/s 69C of the Act. 11. The ld. CIT(A) deleted the addition and hence the Revenue is in appeal before the Tribunal. 12. The ld. DR strongly placed reliance on the .....

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5.11.2014 In all the above said cases, the Co-ordinate Benches of the Tribunal has held that the 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. In the instant case also, the assessing officer has made the impugned addition on the basis of statements given by the parties before the Sales tax department. We notice that the ld.CIT(A) has taken note of the fact that no sal .....

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cially in a case where the assessee has discharged its primary onus of showing books of account, payment by way of account payee cheque and producing vouchers for sale of goods, such an addition could not be sustained. The Ld CIT(A) has also appreciated the contentions of the assessee that he was not provided with an opportunity to cross examine the sellers, which is required to be given as per the decision of Hon ble Kerala High Court in the case of Ponkunnam Traders (83 ITR 508 & 102 ITR 3 .....

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asis of information given by the Sales tax department, he did not make independent enquiry with the sales tax department, the assessee was not given opportunity to cross examine the officials of sales tax department, the evidences furnished by the assessee to prove purchases of sands and its movement were not disproved, the evidences furnished by the assessee to prove the payments made against purchases by way of account payee cheques were also not disproved. Under these set of facts, by followi .....

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