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2017 (2) TMI 541 - ITAT MUMBAI

2017 (2) TMI 541 - ITAT MUMBAI - TMI - Addition on the basis of statements recorded by the Sales Tax Department (STD) from two of the suppliers of the assessee - Held that:- FAA called for a remand report, that in the report the AO did not comment upon the statements of the suppliers, that the assessee was not given any opportunity to cross examine the parties who had supplied the goods to it, that the AO had not rejected the books of accounts of the assessee, that he had accepted the sales made .....

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ments were produced before him-though he stated that same are being reject - ed. Without giving the details of the documents and reasons for rejecting the same is arbitrary use of the powers. The information received from the STD was a good starting point for making further investigation. But same had to be taken to the logical end the documents produced by the assessee had to be rebutted. - Decided against revenue - I. T. A. /4064/Mum/14 - Dated:- 8-2-2017 - Sh. Rajendra, Accountant Member and .....

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g its income at ₹ 1. 24 Crores. 2. Effective ground of appeal is about deleting the addition of ₹ 74. 28 lakhs. During the assessment proceedings, the AO found that assessee had made purchases of ₹ 74. 28 lakhs (Rs. 64. 98 lakhs from Nutan Metal + ₹ 9. 29 lakhs from Magnitude Trading Private Ltd. ) from two parties, that as per the information received from the Sales Tax Department (STD) the purchases made by the assessee from the above referred to parties were bogus, tha .....

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rchases shown. He held that purchases made by the assessee were not verifiable by supporting evidences, that the suppliers had agreed before the STD that they provided bogus bills to the assessee, that the submissions made by it had to be rejected. Finally, he made an addition of ₹ 74. 28 lakhs to the total income of the assessee. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority(FAA). Before him, it made elaborate submissions and st .....

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fore the STD, that it was not permitted to cross-examine the suppliers, that the statements were general in nature about accommodation entries, that in the statement the suppliers had nowhere mentioned that concerned parties had provided accommodation bills to the assessee. The FAA called for a remand report from the AO for carrying out a comprehensive enquiry. In his report dated 12/09/2013, the AO expressed his inability to carry out any enquiry as the notices were returned by the postal autho .....

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ers of producing the parties partly was on him, that he was seeking to rely on the statement of the suppliers, that he was bound to provide an opportunity to the assessee to cross-examine those two parties, that he was also bound to allow access to the statements of the suppliers, that the assessment order was silent on that matter, that the documentation produced by the assessee were specific, that documents were produced before him also during the appellate proceedings, that the AO had failed .....

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)and Jagdamba Trading Company[2006-(ID 2)-GJD-0689-T JOD] and deleted the addition made by the AO. 4. Before us, the Departmental Representative(DR)relied upon the order of the AO and stated that the assessee did not produce the suppliers before him. . The Authorised Representative (AR)supported the order of the FAA and stated that assessee had produced all the necessary evidences before the AO, that statements of the suppliers were not given to the assessee, that the suppliers had made general .....

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/ 2017). 5. We have heard the rival submissions and perused the material before us. We find that the AO had made the addition on the basis of statements recorded by the STD from two of the suppliers of the assessee, that the AO had directed the assessee to produce them, that documentary evidences like purchase bills, delivery challans, account payee cheques, Ledger accounts were not considered by the AO during the assessment proceedings, that nonproduction of the suppliers of the goods and their .....

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sessee specifically or the statements were general in nature. In case the statements were about providing accommodation entry in general, in our opinion, the issue should have been investigated further. The assessee had produced documentary evidences including the proof of payment through banking channel. We further find that the AO has not mentioned in his order as to what documents were produced before him-though he stated that same are being reject - ed. Without giving the details of the docu .....

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