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Keshavlal Jivraj Versus State of Gujarat

2016 (12) TMI 884 - GUJARAT HIGH COURT

Validity of assessment order - whether the AO can make additions solely relying upon the third party statement and without any further corroborative evidence - Held that: - solely on the basis of information gathered by another officer on the basis of visit made outside the State in the premise of T.R.Somani & Sons and Bhavna Trade Agencies, in which, there is reference of sale by them to appellant-assessee, the addition is made - Identical question came to be considered by this Court in the cas .....

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t was recovered from the third party premises. - In the present case, there is no other corroborative evidence collected by the AO justifying the addition in exercise of powers on reassessment, more particularly, with respect to sale of the goods by T.R.Somani & Sons and Bhavna Trade Agencies alleged to have been made to the appellant. Without giving any opportunity of being heard to the appellant to confront the said material and / or without giving any opportunity to cross examine them, st .....

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-11-2016 - M. R. Shah And B. N. Karia, JJ. M/S Wadiaghandy & Co, Advocate for the Appellant Mr. Hardik Vora Asst. Government Pleader for the Opponent JUDGMENT ( Per : Honourable Mr. Justice M. R. Shah ) 1.0. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Gujarat Value Added Tax Tribunal, Ahmedabad dated 27.02.2007 passed in Second Appeal No. 415 of 1997 and the subsequent order dated 23.10.2007 passed by the learned Tribunal passed in Rectificat .....

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on for escapement of turnover would include mere statement of third party claiming any transaction without any supporting evidence thereof ? 3. Whether on the facts and in the circumstances of the case, Appellate Tribunal was justified in holding that there was no mistake apparent on record in the case of the Appellant ? 2.0. The facts leading to the present Tax Appeal in nutshell are as under: 2.1. The appellant is engaged in the business of reselling tea. For the period of 199091 regular asses .....

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ing the addition, the AO added unaccounted purchase from one T.R.Somani & Sons and Bhavna Trade Agencies solely relying upon the information received by the officer of the Department on making visit of aforesaid T.R.Somani & Sons and Bhavna Trade Agencies outside State. Considering the books of account of aforesaid T.R.Somani & Sons and Bhavna Trade Agencies, in which, there was reference to sale by them to the assessee - appellant which were not reflected in the books of account mai .....

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e First Appellate Authority, the appellant preferred Second Appeal before the learned Tribunal being Second Appeal No.415 of 2007. A Specific contention was raised before the learned Tribunal that before relying upon the books of account / material with respect to T.R.Somani & Sons and Bhavna Trade Agencies and while making the addition with respect to the purported unaccounted purchase from T.R.Somani & Sons and Bhavna Trade Agencies, the appellant was neither furnished such material / .....

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order it was observed that the said position has not been disputed by the appellant and that the appellant has preferred to remain silent on the aforesaid point, being aggrieved by the said observations, the appellant preferred Rectification Application before the learned Tribunal being Rectification Application NO. 12 of 2007, which also came to be dismissed by order dated 23.10.2007. 2.4. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Tribunal pas .....

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ould include mere statement of third party claiming any transaction without any supporting evidence thereof ? 3. Whether on the facts and in the circumstances of the case, Appellate Tribunal was justified in holding that there was no mistake apparent on record in the case of the Appellant ? 3.0. Shri Tanvish Bhatt, learned advocate for the appellant has appellant has vehemently submitted that the learned Tribunal has materially erred in confirming the reassessment order making the addition with .....

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appellant specifically disputed any purchase from T.R.Somani & Sons and Bhavna Trade Agencies before relying upon any information and / or material based on such information from the third party i.e. T.R.Somani & Sons and Bhavna Trade Agencies, the appellant assessee was required to be given an opportunity by furnishing third party information gathered / received by the concerned officer and / or appellant assessee was required to be given opportunity of cross examination. 3.2. It is su .....

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ppellant that in the present case opinion has been formed by the AO as well as by the Tribunal that the appellant has not maintained the regular books of account without any further evidence and solely on the basis of alleged purported unaccounted transaction/ purchase from T.R.Somani & Sons and Bhavna Trade Agencies. It is submitted that therefore, the reassessment order can be said to be in breach of principles of natural justice. Making above submissions, it is requested to answer questio .....

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decision of the Division Bench of this Court in Tax Appeal No. 233 of 2013 and Tax Appeal No. 910 of 2013. 4.0. Shri Hardik Vora, learned Assistant Government Pleader has tried to oppose the present appeal by submitting that in the present case the learned Tribunal on the basis of material available on record has found that the assessee has not maintained regular book of accounts and that he was not able to give details of outside State business from whom he has made purchases nor the books of .....

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ed order passed by the learned Tribunal. 6.0. At the outset, it is required to be noted that in the reassessment order, addition came to be made in the case of the appellantassessee for purported unaccounted purchase from T.R.Somani & Sons and Bhavna Trade Agencies. From the order passed by the Assessing Officer, it appears that such addition is made solely relying upon information received by the officer of the department visit of aforesaid T.R.Somani & Sons and Bhavna Trade Agencies si .....

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pellantassessee has not been given opportunity by furnishing material / information gathered by the concerned officer and even books of account / material with respect to T.R.Somani & Sons and Bhavna Trade Agencies. The assessee has not been afforded the opportunity of cross examination. The assessee has specifically disputed having purchased any goods from the T.R.Somani & Sons and Bhavna Trade Agencies. However, solely on the basis of information gathered by another officer on the basi .....

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IT(A) deleted the the said additions by stating that in the absence of any other corroborative evidence, the said addition cannot be made on the basis of presumption and on the basis of statement of any third party and particularly when seized document was recovered from the third party premises. The Division Bench confirmed the order passed by the CIT(A) further confirmed by the learned ITAT. 6.1. In the present case, there is no other corroborative evidence collected by the AO justifying the a .....

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