TMI Blog2019 (3) TMI 1632X X X X Extracts X X X X X X X X Extracts X X X X ..... 6) TMI 514 - ITAT PUNE] we hold addition @10% of the alleged hawala purchases, over and above the GP shown by the assessee for the year. We therefore, set aside the order of Ld. CIT(A) and hold as aforesaid. Levy of penalty u/s.271(1)(c) - bogus purchases HELD THAT:- AO has not brought out any cogent specific reason for imposing penalty. The reason of the Assessing Officer is on assumption. Penalty u/s.271(1)(c) cannot be levied on assumption. There has to be something more which can justify such levy of penalty. Here, we have already decided that there were bogus purchases and relying on our decision in the case of M/s. Chhabi Electricals Pvt. Ltd. (supra), we have arrived at findings that addition @10% of the alleged hawala purchases, over and above the GP shown by the assessee should be done by the Assessing Officer. Any penal action is not warranted in the case of assessee. The Hon'ble Apex Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd [ 2010 (3) TMI 80 - SUPREME COURT] has held that all omissions cannot warranty the levy of penalty u/s.271(1)(c) of the Act. In the instant case, the assessee field revised return offering the additional income to tax im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hawala availed by the beneficiary for respective Financial Years. The information received from Sales Tax Department was duly examined and verified from record and detail of suppliers and their statements were examined and it was revealed that the assessee had claimed purchases of ₹ 3,51,57,380/- excluding VAT for financial year 2008-09 relevant to A.Y.2009-10 in their books whereas no material as against these purchases were received by it in actual. The verification revealed that the assessee has inflated its expenses to the extent of the bills issued from hawala dealers. Therefore, notice u/s 148 was issued to the assessee on 28/3/2013 and was served on it. The AO has recorded reasons to believe that income has escaped assessment before issue of notice u/s.148 of the Act. 4. Considering the quantum of bogus purchases and circumstances of the case, survey under section 133A of the Act was conducted in the business premises of assessee on 13/08/2013 to 14/08/2013. During the course of survey, statement on oath of Mr. Mahesh S. Deshmukh, Director of assessee Company was recorded and during the course of statement, he accepted following purchases as bogus purchases a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with the assessee and the statement was recorded only as per procedure laid down in the Act. The Ld. AR has stated that undue pressure or influence has been exercised for making such statements. However, he is unable to demonstrate, as to how the statements were recorded in a manner not prescribed within the ambit of the Act. That in absence of such evidences, per contra, as shown in the records, statements has been made u/s.133A of the Act by the assessee regarding bogus purchases and revised return offering additional income for tax is also filed. Therefore, the Ld. DR placed strong reliance on the orders of Sub-ordinate Authorities. 7. We have perused the case records and heard the rival contentions and evidences brought out on records clearly suggest that the Maharashtra Sales Tax Department had provided information regarding bogus transactions/purchases being conducted throughout the State of Maharashtra and there are umpteen number of beneficiaries with regard to these bogus purchases. In the case of the assessee, first a notice u/s.148 of the Act was issued on 28.03.2013. Thereafter, survey took place on 14.08.2013. During survey, oath was administered to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is evidence against the respective assessee that where the seller of the goods, has admitted not to have entered into real transaction of sale of goods. Against such non-transaction, there can be no delivery of goods, then it is case of passing of bills of sale and purchases, against which no VAT has been paid. Such bogus purchases are then to be added in the hands of assessee. Where the Assessing Officer had confronted the assessee with the information received, supplied copies of statements and where the persons have not been traced and no confirmation has been filed by the assessee in this regard, then the addition is to be made in the hands of assessee on account of such bogus purchases. In the facts and circumstances of some cases, the goods have been transferred by such hawala dealers to the respective purchasers, against which the assessee has to discharge onus of establishing the trail of goods which are transferred and further sold by them. Where the assessee is able to produce evidence of purchase of goods by way of weighment bridge receipts, transportation documents, payment of octroi and subsequent sale of goods to the respective parties and / or where the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee, who in turn had maintained quantitative details and also evidence of its movement i.e. transportation details and quality control details of consumption of the said material or exact details of sale of the same consignment through same transporter directly to the party, then the total purchases cannot be added in the hands of assessee. However, since the purchases are made from the grey market, some estimation needs to be made in the hands of assessee. The Tribunal in M/s. Chetan Enterprises Vs. ACIT (supra) has already held that the addition be made by estimating the same @ 10% of the alleged hawala purchases, over and above the GP shown by the respective assessee. V. Another set of cases where the statements recorded by the Sales Tax Department have been handed over to the assessee and the copies of same have been supplied to the assessee, then where the assessee established the case of receipt of goods and its onward transmission, then the factum of purchases by the assessee stands established in such circumstances. However, estimation is to be made in the hands of assessee because of purchases from the grey market and following the above said ratio, addition is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble Apex Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd. reported at 322 ITR 158 (SC). It is not that in all facts and circumstances, penalty can be levied. That from the circumstances of the case there has to be derived elements of mens ria and actus rius from the conduct of the assessee to ascertain whether he wanted to conceal income or furnish inaccurate particulars of income so to evade tax. In the instant case, Assessing Officer has not brought out any cogent specific reason for imposing penalty. The reason of the Assessing Officer is on assumption. Penalty u/s.271(1)(c) cannot be levied on assumption. There has to be something more which can justify such levy of penalty. Here, we have already decided that there were bogus purchases and relying on our decision in the case of M/s. Chhabi Electricals Pvt. Ltd. (supra), we have arrived at findings that addition @10% of the alleged hawala purchases, over and above the GP shown by the assessee should be done by the Assessing Officer. That further, any penal action is not warranted in the case of assessee. The Hon'ble Apex Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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