TMI Blog2016 (10) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... t and affidavit filed by hawala dealer before Sales Tax Department have evidentiary value. In fact such evidence was not available before Assessing Officer or before ld CIT (A). The copies of such statements or affidavits were never confronted with the assessee either by Assessing Officer or by ld CIT(A). Even otherwise, if it is considered for the sake of consideration for a moment that the statement or the affidavit filed before the sale tax Department has any relevance, the assessing officer should have carried out independent enquiry and to provide opportunity to the assessee to counter the same. - Decided in favour of assessee - I.T.A. No. 439/Mum/2016 - - - Dated:- 14-10-2016 - Shri Rajendra, AM And Shri Pawan Singh, JM Appellant by : Shri Bhupendra Shah Respondent by : Shri Arvind Kumar ORDER Per Pawan Singh, J. M 1. The present appeal under section 253 of Income Tax Act ( Act ) is directed by the assessee against the order of Commissioner of Income Tax (Appeals) 3, Thane, dated 05/11/2015. The assessee has raised as many as 8 grounds of appeal. However, as per our considered opinion there is only three effective grounds of appeal, the rest of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(3) read with section 147 of the act. Aggrieved by the order of AO the assessee filed appeal before the CIT(A), but the same was dismissed vide order dated 15 November 2015 impugned in the present appeal. 3. We have heard ld AR of the assessee and the ld DR for revenue and perused the material available on record. The Learned AR of the assessee argued that AO has not rejected the books of account of the assessee. The notice under section 133(6) sent to the parties were duly served. Section 69C of the Act has no application on the facts of the present case. The AO disallowed the entire purchases. The AO failed to appreciate that the purchases were made by account payee cheques which cannot be termed as a bogus. The AO relied on the information of third-party which is not admissible against the assessee. The AO has not made any independent enquiry or details of the bank accounts of the supplier to find out whether there was any immediate cash withdrawal from their accounts. The ld AR of the assessee further relied upon the decision of Hon ble jurisdictional High Court in Nikunj Eximp Enterprises Private Limited reported vide 372 ITR 619(Bom) and various decisions of this Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied out independent enquiry and to provide opportunity to the assessee to counter the same. The coordinate bench of this Tribunal in DCIT Vs Rajeev M. Kalathil in ITA No.6727/Mum/2012 (AY-2009-10) dated 20.08.2014 in which the similar addition was made on the basis of information available on website of Sales Tax Department, Government of Maharashtra, was deleted by the Tribunal, holding as under:- We have heard the rival submissions and perused the material before us. We find that AO had made the addition as one of the supplier was declared a hawala dealer by the VAT Department. We agree that it was a good starting point for making further investigation and take it to logical end. But, he left the job at initial point itself. Suspicion of highest degree cannot take place of evidence. He could have called for the details of the bank accounts of the suppliers to find out as whether there was any immediate cash withdrawal from their account. We find that no such exercise was done. Transportation of good to the site is one of the deciding factors to be considered for resolving the issue. The FAA has given a finding of fact that part of the goods received by the assessee was fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tity details of purchases and sales have been reconciled by the assesee. Further, various case law relied upon by the assessee also supports his case. Under these set of facts, we are of the view that the ld. CIT(A) was not justified in confirming the disallowance of purchases. Accordingly, we set aside the order of the ld. CIT(A) on this issue and direct the AO to delete the disallowance of purchases. Further in ACIT Vs. Talra R Shah in ITA No.5295/Mum/2013dated 28.11.2014, similar addition to the tune of ₹ 4,98,80,892/- was deleted by the Tribunal holding as under:- 8. We have carefully perused the orders of the lower authorities and the relevant documentary evidences brought before us. We find that the AO has made the addition as some of the suppliers of the assessee were declared Hawala dealer by the Sales tax Department. This may be a good reason for making further investigation but the AO did not make any further investigation and merely completed the assessment on suspicion. Once the assessee has brought on record the details of payments by account payee cheque, it was incumbent on the AO to have verified the payment details from the bank of the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Ganpatraj A Sanghavi V/s ACIT in ITA No. 2826/Mum/2013 (AY- 2009-10) dated 5.11.2014 In all the above said cases, the Co-ordinate Benches of the Tribunal has held that the AO was not justified in making the addition on the basis of statements given by the third parties before the Sales Tax Department, without conducting any other investigation. In the instant case also, the assessing officer has made the impugned addition on the basis of statements given by the parties before the Sales tax department. We notice that the ld.CIT(A) has taken note of the fact that no sales could be effected without purchases. He has further placed reliance on the decision rendered by Hon ble Gujarat High Court in the case of CIT Vs. M.K. Brothers (163 ITR 249). He has further relied upon the decision rendered by the Tribunal in the cae of ITO Vs. Premanand (2008)(25 SOT 11)(Jodh), wherein it has been held that where the AO has made addition merely on the basis of observations made by the Sales tax dept and has not conducted any independent enquiries for making the addition especially in a case where the assessee has discharged its primary onus of ITA. No.5920/Mum/2013 and 6203/Mum/2013 7 showing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods to the site. He relied upon the case of Babula Borana (282 ITR251), would Nikunj Eximp Enterprises (P) Ltd. (216Taxman171) delivered by the Hon ble Bombay High Court. 2.4. We 13 ITA No.5295/Mum/2013 ACIT Vs. Tarla R Shah have heard the rival submissions and perused the material before us. We find that AO had made the addition as one of the supplier was declared a hawala dealer by the VAT Department. We agree that it was a good starting point for making further investigation and take it to logical end. But, he left the job at initial point itself. Suspicion of highest degree cannot take place of evidence. He could have called for the details of the bank accounts of the suppliers to find out as whether there was any immediate cash withdrawal from their account. We find that no such exercise was done. Transportation of good to the site is one of the deciding factor to be considered for resolving the issue. The FAA has given a finding of fact that part of the goods received by the assessee was forming part of closing stock. As far as the case of Western Extrusion Industries (supra)is concerned, we find that in that matter cash was immediately withdrawn by the supplier and there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
