TMI Blog2016 (5) TMI 1380X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been filed regarding purchases and labour charges including name of the person in whose name the cheques were cleared, as seen from the bank statement of the appellant. It is further seen that on the cheques were cleared in the name of the parties to whom the payments were claimed to have been made. The AO without verifying such details, footed his conclusion only on Ward Inspector's Report which in itself seems to be done negligently without putting much efforts and application of mind. The AO's very basis for making the said additions is flawed and unsustainable. In the circumstances, there is no case for any such ad hoc disallowance. - Decided in favour of assessee. - I.TA Nos. 129 & 126/Mum/2013 - - - Dated:- 18-5-2016 - SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER Appellant by: Shri Vishwas Jadhav Respondent by: Shri Virag H. Shah O R D E R PER C.N. PRASAD, JM: These two appeals are filed by the Revenue against the order of the Ld. CIT(A)-35, Mumbai dated 3.10.2012 pertaining to assessment years 2008-09 2009-10. 2. The issue in the appeal of the Revenue for the assessment year 2008-09 is that the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us purchases and bogus labour charges inspite of the fact that the notices issued u/s. 133(6) were not received by the parties and the assessee did not produce the parties for verification. The Ld. Departmental Representative further submits that the Ld. CIT(A) erred in deleting the addition/disallowance of bogus purchases without appreciating the fact that the Sales tax Department carried out independent enquiries with respect to these parties and proved that these parties are indulged in providing accommodation entries only and not in real business. Therefore, he submits that disallowances are rightly made by the Assessing Officer. 6. The Ld. Counsel for the assessee submits that assessee furnished all the details in respect of these parties. In the course of assessment proceedings on 4.11.2010, assessee submitted various information such as details of sundry creditors, details of party-wise , item-wise purchases above ₹ 20,000/-, name, address and PAN of the concerned parties. The Ld. Counsel for the assessee submits that thereafter showcause notice dated 24.11.2010 was issued requiring the assessee to submit confirmations from the parties, copy of return of income and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into real business. In the absence of any such finding in the assessment order, it is totally unjustified making an allegation at this stage. The Ld. Counsel for the assessee submits that in an identical situation, the addition/disallowance made by the Assessing Officer on account of bogus purchases and labour charges for the immediate preceding assessment year 2007- 08 has been deleted by the Tribunal in ITA No. 3743 of 2010 by order dated 8.5.2013. The Ld. Counsel for the assessee submits that except M/s. Bhagwati Enterprises and M/s. Sandeep Trading Co., all other parties are same in the current assessment year. 7. We have heard the rival contentions, perused the orders of the authorities below and the Tribunal s order in assessment year 2007- 08. The Assessing Officer while completing the assessment disallowed ₹ 41,95,897/- ₹ 4,87,504/- towards bogus purchases and labour charges for the reason that the notice u/s. 133(6) could not be served on the parties in the address given by them. The Assessing Officer solely relied on the Inspector s report which stated that the parties are not available at the given address. It is the contention of the assessee that all t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmations were filled and no addition could be made without proving that there was bogus purchases and income tax returns of purchase parties. Further, the appellant made payments by DD or account payee cheques. There is not a single cash payment to any of the purchase or labour party. Complete details have been filed regarding purchases and labour charges including name of the person in whose name the cheques were cleared, as seen from the bank statement of the appellant. It is further seen that on the cheques were cleared in the name of the parties to whom the payments were claimed to have been made. The AO without verifying such details, footed his conclusion only on Ward Inspector's Report which in itself seems to be done negligently without putting much efforts and application of mind. The AO's very basis for making the said additions is flawed and unsustainable. In the circumstances, there is no case for any such ad hoc disallowance. I have also taken notice of Appeal Order dt. 24.02.2010, wherein my predecessor has passed a detailed order and allowed the appeal in favour of Assessment Year 2007-08. In view of the above facts circumstances of the case and discu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties. Most of the parties in respect of whom the addresses were given, were returned unserved. The A.O. made disallowance at the rate of 20% of the total expense under this head. The learned CIT(A) deleted the entire addition. Facts of this ground as also the decision taken by the ld. CIT(A) is mutatis mutandis similar to ground no.2. Here again, the learned CIT(A) deleted the entire addition by losing sight of the fact that in respect of several persons to whom the alleged payment was made, the assessee failed to furnish even the basic details such as addresses or bills. It is on certain selective material that the total addition came to be deleted. The assessee has filed fresh details before the ld. CIT(A), which have neither been commented upon by the ld. CIT(A) nor the remand report called from the AO. In our considered opinion, the ends of justice would meet adequately if the impugned order on this issue is also set aside and the matter is remitted to the file of A.O. We order accordingly and require him to decide this issue afresh as per law after allowing a reasonable opportunity of being heard . 9. Facts and circumstances being identical, we delete the disallowance/add ..... X X X X Extracts X X X X X X X X Extracts X X X X
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