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Shailesh Keshavlal Shah Versus The ITO, Ward-2, Patan

2016 (4) TMI 347 - ITAT AHMEDABAD

Bogus purchases - addition made on the basis of Maharastra VAT authorities to the effect that assessee’s suppliers have issued bogus invoices without involving any actual delivery of goods - hawala dealers - Held that:- It emerges that he is mainly a suppliers of finished goods from purchasers to sellers without involving any stock being maintained at his behest. There is further no dispute that assessee’s sales in question corresponding to the impugned purchases already stand accepted. There is .....

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ircumstances that the CIT(A) has erred in confirming the impugned addition of bogus purchases, See Hiralal Chunilal Jain vs. ITO [2016 (1) TMI 1089 - ITAT MUMBAI], ACIT vs. Ramila P. Shah [2015 (3) TMI 1116 - ITAT MUMBAI] and DCIT vs. Rajiv Jee Kalathil (2014 (8) TMI 807 - ITAT MUMBAI) - Decided in favour of assessee - ITA Nos. 1877 to 1879/Ahd/2015 - Dated:- 8-3-2016 - Shri N.K. Billaiya, Accountant Member and Shri S. S. Godara, Judicial Member For The Revenue : Mr. R.P. Maurya, Sr. D.R. For Th .....

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x Act, 1961; in short the Act . 2. Both the parties express agreement at the outset that relevant facts and circumstances involved in all the three appeals are identical. We accordingly treat ITA 1877/Ahd/2015 as the lead case. 3. We come to relevant facts first. The assessee-individual deals in semi-whole sale of iron, steel, alloy steel, steel hardware and tools as well as its allied products. He filed return on 30-07-2009 declaring income of ₹ 3,41,180/-. The same was processed. The Ass .....

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as beneficiary of this bogus billing in the names of his proprietary concern M/s. S.N. F. Engineering Co. involved five billing instances of different amounts aggregating to the impugned sums of ₹ 52,93,515/-. This culminated in issuance of section 148 notice dated 23-04-2013. The assessee appears to have strongly contested the same by producing the relevant evidence of having executed sale of purchased goods sought to be treated as bogus, books of accounts, confirmation and proof of paym .....

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de by the appellant and the case laws relied upon. AO had reopened the assessment on the basis of information in respect of bogus purchases along with statement recorded u/s 14 of Maharashtra VAT Act, 2002 of 2060 Hawala dealers received from the Maharashtra VAT Department. During the investigation, the Assistant Commissioner of Sales Tax-15, Investigation Branch-B, Mumbai has recorded the statement of (i) Shri Ramesh Jaichand Ashra Prop, of R. D. Steel Corporation, (ii) Shri Tushar Ramesh Ashra .....

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mation in respect of non-genuine bills/ bogus purchase received from VAT Department, Mumbai. It was noticed that appellant was one of the beneficiary of bogus billing and had obtained bogus bills for purchase amounting to ₹ 52,93,515/- from the parties involved. Appellant failed to produce before the AO and AO proceeded to make the addition as proposed by him. On the other hand appellant contended during the appellate proceedings it is not a manufacturer and do not require any rawmaterial .....

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hom purchase/sates have been made, as well as copy of Bank statements reflecting payment made for purchases are already furnished. Relevant bill/voucher files were also produced for verification in respect of L.R. Receipts, Vouchers, Gate-Pass, Delivery Challan and vouchers before Assessing Officer. As regards the stock register, Appellant contended that day-to-day stock register is not maintained by the Appellant, however, Appellant had furnished a detailed Chart showing disposal (Sale) of the .....

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s, to which AR of the appellant has shown his inability to produce the evidences called for. Further, AR of the appellant was also requested to produce a copy of the VAT order in their favour for allowabiiity of its claim of purchases. Again the AR of the appellant was not in a position to bring on record of the undersigned the order passed by the VAT department. Appellant has totally failed to substantiate its claim made before me during the appellate proceedings with evidences which were calle .....

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der which has already been reproduced above in para.4.1 of the appellate order, however, the main contention of the AO is once again briefed as under: _ Appellant had disclosed such matter before the Government office with filing of affidavit on oath that due to financial crunch appellant started working through these firms and issued bogus tax invoices without involvement of goods. The three parties had filed affidavits the Notary of High Court, Mumbai with the identity, hence there was no doub .....

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that appellant's Head Office is at Patan and branch office at Mumbai and debited ₹ 72,000/- on account of office rent. Appellant had not shown any property i.e. office building or godown in the balance sheet. The nature of business of appellant is such that it is not possible to maintain business at different places i.e. Patan and Mumbai and further it is not possible that the office is available on an annual rent of ₹ 72,000/- at Mumbai. In such facts, it is not possible for the .....

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seller to place of purchaser located out of Mumbai. In such circumstances, action of the AO in making the addition of ₹ 52,93,515/- as bogus purchases is held justified and the addition made is hereby confirmed. The relevant grounds of appeal are hereby rejected. 5. We have rival contentions. Both ld. representatives reiterate their respective stands against and in support of the impugned bogus purchases addition of ₹ 52,93,515/- made on the basis of Maharastra VAT authorities to th .....

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