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ACIT – 22 (3) , Mumbai Versus Late Sanjay O. Goel, L/H Sagar Sanjay Goel

2017 (2) TMI 217 - ITAT MUMBAI

Bogus purchases - Held that:- AO has not brought on record any material evidence to conclusively prove that the said purchases are bogus. Mere reliance by the AO on information obtained from the Sales Tax Department or the sworn statement of the parties before the Sales Tax Department, without affording the assessee any opportunity to cross examine those witnesses in this regard or the fact that these parties did not respond to notice under section 133(6) of the Act, would not in itself suffice .....

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s without the assessee being afforded any opportunity of cross examination of that persons and for non-response to notices under section 133(6) of the Act. - In the factual matrix of the case, where the AO failed to cause any enquiry to be made to establish his suspicions that the said purchases are bogus, the assessee has brought on record documentary evidences to establish the genuineness of the purchase transactions, the action of the AO in ignoring these evidences cannot be accepted - De .....

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d D.R. and the material on record. 2. The facts of the case, briefly, are as under: - 2.1 The assessee, engaged in the business of trading in hardware items used in sugar factories, filed the return of income for A.Y. 2010-11 on 13.10.2010 declaring total income of ₹ 18,90,380/-. The return was processed under section 143(1) of the Income Tax Act, 1961 (in short 'the Act') and the case was subsequently taken up for scrutiny. In the course of assessment proceedings, the Assessing Of .....

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following dealers, the details of which are as under: - Sr.No. Name of alleged supplier Amount (Rs. ) 1 Shiv Industries 4,67,888/- 2 Sidhivinayak Steels 1,84,950/- 3 Krish Corporation 3,82,500/- 4 Sagar Enterprises 1,51,313/- 5 Asian Steel 2,53,125/- 6 Siddhi Enterprises 3,76,875/- 7 Atlas International (I) 33,750/- 8 Deep Enterprises 1,15,650/- 9 Surat Tube Corporation 1,38,128/- 10 Shriti Enterprises 1,56,937/- 11 Skand Industries 3,87,000/- 12 Chanchal Tube Corporation 1,80,675/- 13 Manav Imp .....

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ch were filed, payments for which were made through normal banking channels, delivery of materials received and onward sales of the same were made to various sugar factories, public refineries in Maharashtra and Gujarat; which sales can be identified with purchases made. In order to ascertain the genuineness of these purchases, the AO issued notices to these parties to which there was no response. AO also recorded statement of the late assessee s son and Legal Heir, Shri Sagar Sanjay Goel, under .....

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he same to tax in the assessee s hands. The assessment was accordingly completed under section 143(3) of the Act vide order dated 20.03.2013, wherein the income of the assessee was determined at ₹ 53,44,750/-; which included the addition of ₹ 34,54,367/- on account of bogus purchases. 2.3 Aggrieved by the order of assessment dated 20.03.2013 for A.Y. 2010-11, the assessee preferred an appeal before the CIT(A)-34, Mumbai. The learned CIT(A), after considering the submissions of the as .....

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eing aggrieved by the order of the CIT(A)-34, Mumbai dated 12.03.2015 for A.Y. 2010-11, has preferred this appeal wherein it has raised the following grounds: - (1) On the facts and under the circumstances of the case and in law, the learned CIT(A) erred in deleting the addition of ₹ 34,54,367/- for A.Y. 2011-12 on account of bogus purchases without appreciating the fact that there was specific and verifiable information from the Sales Tax Department that the assessee had resorted to bogus .....

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did not respond to notices issued under section 133(6) of the Act issued by the AO and documentary evidence to support the purchases from these parties could not be verified, the genuineness of the said purchases is not established. Therefore, the AO was justified in treating the said purchases as bogus and bringing the same to tax in the assessee s hands. 3.3.1 We have heard the learned D.R. for Revenue and perused and carefully considered the material on record; including the judicial pronoun .....

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which there was no response. It is seen that the AO primarily relying on the information received from Sales Tax Department and statements/ deposition given before the Sales Tax Department by these parties, held the said purchases to be bogus. While it may be true that these parties did not appear before the AO for whatever reasons, the fact remains that the learned A.R. of the assessee/Legal Heir had submitted copies of purchase bills to evidence purchases for which payments were made by accou .....

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n record any material evidence to conclusively prove that the said purchases are bogus. Mere reliance by the AO on information obtained from the Sales Tax Department or the sworn statement of the parties before the Sales Tax Department, without affording the assessee any opportunity to cross examine those witnesses in this regard or the fact that these parties did not respond to notice under section 133(6) of the Act, would not in itself suffice to treat the purchases as bogus and make the addit .....

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