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TMI Blog2016 (8) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... . 143(3) of the Act, on 05. 02. 13, determining the income of the assessee at Rs. 1. 22Crores. 2. During the assessment proceedings, the AO found that the assessee had debited purchase of 25. 25 Croresores. He directed it to file details of purchases, TIN and names and addressed of the parties from whom purchases were made. In reply to notice it filed details. Meanwhile, the AO received information received from Sales Tax Department which was also available on the official website of Sales tax Department regarding suspicious parties who were providing accommodation entries without doing any actual business. On going through the details submitted by the assessee he found that M/s. Niddhish Impex Pvt. Ltd. (NIPL), M/s. S. M. Trading Co. (SMT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts letter dt. 31. 03. 2013, submitted copies of bills and delivery challans along with bank statement of the three parties. After considering the submissions of the assessee, the AO observed that submission made by the assessee were not acceptable, that Ketan Shah of SMTC had accepted in his affidavit on declaration that he did not sell or purchase goods, that N. K. Shah in his stated accepted that he was director for name sake only and that all other work was looked after by R. B. Shah that NK Shah also admitted that TTPL and NIPL were issuing bogus bill, that RB Shah in his deposition had accepted that he was issuing bogus bills, that NK shah had also accepted of issuing bogus bills, that the assessee did not purchase any goods from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dustries P. Ltd. (49ITD177), Nikunj Exim Enterprises Pvt. Ltd. (ITA5604 of 2010), Fortune Steel Industries(ITA/2894-95/ Mum/ 2007), that the statements recorded by the sales tax authorizes were taken behind the back of the assessee without giving it any chance to revert the statement by way of Cross examination, that the AO without affording an opportunity of Cross examination had made the addition, that the AO had relied upon the statements of the three suppliers of goods, that the onus was on him to produce the parties, that the additions based on the observation on the sales tax department could not be sustained, that the GP ratio over the years had remained more or less same, that in case the addition to the extent of Rs. 80. 09 lakhs w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vious three AY. s. Referring to the GP of 5. 5% , 4. 93% and 4. 49% for the AY. s. 2007- 08, 08-09 and 09-10 respectively he held that during the year under consideration the assessee had shown GP ratio @4. 29%. He directed the assessee to explain the reason for fall in GP ratio. The assessee submitted that GP ratio had fallen because of inCroresease in turnover. After considering the submission of the assessee , the FAA held that assessee was a trader in the business of Iron and Steel, that in the case of Fortune steel Industries (supra) the assessee had shown GP @ 16. 13% in the AY 03-04 and 10. 81% in the immediate preceeding year, that the Tribunal did not confirm any addition on the GP ratio, that still it was an indication that GP mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3ITR249); Rajeev G. Kalathil (5t1 taxmann. com 514); (67 SOT 52)(Mum Trib. ); Ramesh Kumar & Co. (ITA No. 2959/Mum/2014 dated 28. 11. 2014 A. Y. 2010-11). 4. 1. The Departmental Representative(DR) supported the order of the FAA to the extent of the addition sustained by the FAA. With regard to the addition deleted by him, the DR argued that assessee had not filed confirmation from the sellers, in purchase bills details of the goods were not available, that the expenditure made by the assessee was not explained during the assessment proceedings, that the AO provided reasonable opportunity of hearing to the assessee. The AR referred to pages-159, 162-164 of the PB and stated that affidavits/ statements of Dilip Shantilal Shah, M. K. Shah/K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk statement, stock register during the assessment proceedings. All these documents along with the undoubted sales cannot be brushed aside. The only basis for making the addition was the information available on the website of the sales tax department. In our opinion it was a good lead to start investigation, but in itself it was not an evidence to make the addition. It is also a fact that the assessee had asked for Cross-examination of the parties, whose statements were relied upon by the AO. It is a matter of record that request made for Cross examination was not heeded to. Therefore, only on the basis of non observation of principles of natural justice the addition made by the AO could be deleted. However, other factors are there to upho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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