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M/s. Imperial Imp & Exp. Versus The ITO 20 (1) (5) , Mumbai.

2016 (3) TMI 1095 - ITAT MUMBAI

Addition being estimated profit on unexplained purchases - purchases treated to be bogus based on the purported enquiries conducted by the Sales Tax Department of the Government of Maharashtra - Held that:- Ostensibly, the Assessing Officer ought to have brought on record material which is relevant to the transactions of the assessee with the aforesaid four parties instead of making a general observation about the information received from the Sales Tax Department of the Government of Maharashtr .....

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icer. - Assessing Officer was not justified in making additions merely on the basis of information obtained from the Sales Tax Department of the Government of Maharashtra without conducting any independent enquiries. Before the CIT(Appeals), one of the points raised by the assessee was with respect to an opportunity to cross examine the four parties, but we find that no such opportunity have been allowed. Considering the entirety of facts and circumstances of the case and the aforesaid prece .....

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Assessment Year 2009-10, which in turn has arisen from the order passed by the Assessing Officer dated 16/03/2015 under section 143(3) of the Income Tax Act, 1961 (in short the Act ) . 2. In this appeal, although the assessee has raised multiple Grounds of appeal, but the substantive grievance is against the action of the CIT(Appeals) in confirming an addition of ₹ 4,19,356/- being estimated profit on unexplained purchases. 3. In brief, the relevant facts are that the appellant is a partn .....

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to tax had escaped assessment, in as much as, assessee had taken accommodation purchase bills from four parties, totalling to ₹ 77,51,496/-. In the ensuring assessment, the Assessing Officer has held that purchases declared by the assessee of ₹ 77,51,496/- from four parties, detailed in para-1 of the assessment order are bogus purchases. According to the Assessing Officer, assessee did not make actual purchases from such four parties because as per the information received from the .....

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rdingly, the Assessing Officer brought to tax the profit margin in relation to such non-genuine purchases, which he computed by applying the rate of 12.5% on the total amount of ₹ 77,51,496/-, which came to ₹ 9,68,937/-. 3.1 The plea of the assessee before the Assessing Officer as well as before the CIT(Appeals) was that the purchases in question were duly supported by the bills of purchase. Moreover, the assessee pointed out that all its sales were by way of exports and that there w .....

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T Department. Additionally, the CIT(Appeals) also noticed that assessee could not prove the existence of the suppliers and, therefore, the circumstantial evidence also suggested that the entire purchases from the four parties was unverifiable. However, he restricted the addition to 5.41% of the amount of such unexplained purchases, instead of 12.5% adopted by the Assessing Officer. The CIT(Appeals) has applied the rate of 5.41% being the gross profit rate of the assessee for the year under consi .....

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having been listed as hawala operators by the Sales Tax Department of the Government of Maharashtra, but there is no clear evidence to suggest that the transaction with the assessee were bogus. It is pointed out that in the cases of some other assessees, under identical circumstances, the Coordinate Benches of the Tribunal have deleted the additions. In this connection, reliance have been placed on the following decisions:- (1) ITO vs. Shri Deepak Popatlal Gala inITANo.5920/Mum/2013 (A.Y 2010-11 .....

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ther hand, the Ld. Departmental Representative supported the orders of the authorities below by pointing out that the addition has been made on account of the enquiries conducted by the Sales Tax Department of the Government of Maharashtra and no effort has been made by the assessee to controvert such information. 6. We have carefully considered the rival submissions. The entire discussion in the assessment order reveals that purchases from four parties namely Dhruv sales Corporation - ₹ 1 .....

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