TMI Blog2021 (10) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessee by : Shri Pramod Shingte Revenue by : Shri S.P Walimbe ORDER PER PARTHA SARATHI CHAUDHURY, JM: These cross-appeals preferred by the assessee and Revenue emanates from the common order of the Ld. CIT(Appeals)-12, Pune dated 02.02.2017 for the assessment year 2011-12 as per the grounds of appeal on record. 2. The assessee in ITA No.1088/PUN/2017 has raised following grounds of appeal: In view of the facts of the case, evidences on record, submissions made and the provisions of law- 1. The learned CIT(A) erred in holding the initiation of proceedings u/s.147 and thereby issue notice u/s.148, for the reasons recorded by the AO as valid in law. Therefore, it is prayed to hold the initiation of proceedings u/s.147 as bad in law and thereby annul the assessment order passed u/s.143(3) r.w.s.147. 2. The learned CIT(A) erred in disallowing purchases to the extent of ₹ 51,85,086/-, being 25% of the purchases made from following parties, disregarding the explanations furnished and the evidences brought on record by the appellant : M/s. National Trading Company ₹ 1,25,08,910/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reported hawala dealers. During assessment proceedings, the Assessing Officer added 100% of such hawala purchases to the total income of the assessee and this was reduced by the Ld. CIT(Appeals) to 25%. The Revenue wants in their appeal that 25% as restricted by the Ld. CIT(Appeals) should be reversed and that the addition of 100% made by the Assessing Officer should be upheld, whereas, the assessee submitted that whatever were these hawala purchases made, they were consumed and this fact is not disputed even in the order of the Ld. CIT(Appeals) and hence, suitable relief may be provided. 5. Since facts and circumstances involved in these appeals are similar and grounds of appeal are common in respect of the issues involved for both the appeals before us, these appeals were heard together and disposed of vide this consolidated order. 6. The facts in brief are that search action u/s.132 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) was conducted in the case of the assessee on 20.04.2010 and in response of u/s.153A of the Act, the assessee disclosed income of ₹ 93,28,87,430/-. During the course of search assessment proceedings, the assessee approached ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, the cash was either withdrawn immediately or amount was transferred to similar paper entities engaged in paper transactions and entire purchase of ₹ 2,07,40,342/- was held as bogus and was disallowed. 9. That before the Ld. CIT(Appeals), the assessee had made detailed written submissions which are on record. That on consideration of such written submissions and the assessment order, the Ld. CIT(Appeals) has held and observed as follows : 16.4 I have considered the submission made by the appellant and same is not acceptable in toto. All the four impugned suppliers were declared as Hawala dealers by the Maharashtra Sales Tax Department and were allegedly engaged in supplying of accommodation bills. This fact gets further strengthened as the notices/summons issued by the AO were returned back by the postal authorities with the remarks 'Not Known'. Therefore, entities were not genuinely and regularly engaged in business of trading of MS channel etc. Further, the AO carried out enquiries from which it was noted that out of the cheques of ₹ 15,00,000/- and ₹ 15,16,000/- credited on 28.06.2010 and 29.06.2010 respectively in the accounts of M/s. Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Sanjay Oilcake Industries V. CIT (316 ITR 274) and later on followed in case of CIT Vs. Bholanath Poly Fab Pvt. Ltd. (355 ITR 290). This would result in disallowance of ₹ 51,85,086/- on account of non-genuine purchases. Appellant gets relief of ₹ 1,55,55,256/- and the ground raised by the appellant is partly allowed. 10. The Ld. CIT(Appeals) in his order observed that the assessee s claim that MS channels, GI nuts, cables etc. totaling to ₹ 2,07,04,180/- purchased (except sand of ₹ 36,162/- from M/s. Millenium Minerals) from three suppliers were used at power project sites for which contracts were awarded to its by MSEDCL and its project consultant vouched physical receipt of each material at the site which cannot be doubted. The Ld. CIT(Appeals) further observed that the Assessing Officer did not controvert the claim that material received at power project site was verified and for each instances there were material receipt cum handling voucher singed by the agent of the electricity company. In this circumstances , it could be concluded that material was purchased and used by the assessee at the power project site but same was not supp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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