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TMI Blog2016 (12) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri A. Ramachandran ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the assessee, being ITA No. 1845/Mum/2016, is directed against the appellate order dated 11th January, 2016 passed by learned Commissioner of Income Tax (Appeals)- 38, Mumbai (hereinafter called the CIT(A) ), for the assessment year 2010-11, the appellate proceedings before the learned CIT(A) arising from the penalty order dated 27th September, 2013 passed by the learned Assessing Officer (hereinafter called the AO ) u/s 271(1)(c) of the Income-tax Act,1961 (Hereinafter called the Act ). 2. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called the Tribunal ) read as under:- 1. IN THE PRESENT CASE I FIND THAT THE ADDITION WAS MADE PURELY ON THE BASIS OF FINDINGS MADE BY THE SALES TAX DEPARTMENT WHICH WAS BEYOND THE CONTROL OF ASSESSEE. THERE IS NO CLINCHING EVIDENCE AS REGARDS TO THE CONCEALMENT. 2. AFTER A LAPSE OF PERIOD OVER A TIME WHEN SUPPLIER WERE DECLARED HAWAL TRADERS ASSESSEE EXPRESSED INABILITY TO PRODUCE THE PARTIES FOR CROSS-EXAMINATION. IT IS TO BE VIEWED IN THE CONTE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of assessment proceedings, the A.O. disallowed bogus purchases amounting to ₹ 25,98,278/- on account of spares and parts. The assessee is engaged in the business of renting of Boom and scissor Lifts which are used in the infrastructure projects. Penalty proceedings were initiated by the A.O. u/s 271(1)(c) of the Act for concealment of income and furnishing inaccurate particulars of income. It was observed by the A.O. that the assessee has debited an amount of ₹ 27,24,342/-. On perusal of the details of purchases, the A.O. noticed that out of the above total purchases, the assessee has made purchases from following three parties:- Sr No. Name of the party Amount (in Rs) 1 M/s Arihant Traders 8,60,715/- 2 M/s Adinath Trading Co. 7,87,501/- 3 M/s Harsh Corporation 9,50,062/- Total 25,98,278/- The A.O. during the course of assessment proceedings issued notices u/s 133(6) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the A.O. u/s 271(1)(c) of the Act, the assessee filed first appeal before the ld. CIT(A). 5. Before the ld. CIT(A) , the assessee contended that additions have been made purely on the basis of findings made by the sales tax department which was beyond the control of assessee and that there was no clinching evidence as regards to the concealment of income. It was submitted that the principles of natural justice requires that confessional statement should be made available to the assessee and should be provided with an opportunity to cross-examine the witness. It was submitted that the purchase transactions were made through brokers and cheque payments were made , and once the suppliers were declared hawala traders, assessee expressed his inability to produce the parties and that the parties were not directly known to the assessee. It was further contended that the assessee surrendered the amount for taxation purpose to buy peace and avoid litigation and that the A.O. did not record any finding that the explanation offered by the assessee was false and the bonafide was not proved.It was submitted that law does not require man to do impossible and as the parties from whom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d assessment year to buy peace of mind and to avoid protracted litigation. The AO disallowed the said sum and added the same to income of the assessee u/s 37(1) of the Act. Thus, it was established that it was due to the inability of the assessee to give the correct addresses of the parties, the assessee offered to surrender an amount of ₹ 25,98,278/- which were the purchases shown from such parties during the year under consideration. The ld. CIT(A) held that the assessee could not produce any cogent evidence before the A.O during the course of assessment proceedings which could have led credence to the submission and explanation offered by the assessee and establish the genuineness of such purchases. The burden of proving that a particular expenditure was genuine is on the assessee. By relying on the decision of Hon ble Supreme Court in the case of Mak Data Private Limited v. CIT in civil appeal no 9772 of 2013 reported in (2013) 38 taxmann.com 448(SC) and K.P. Madhusudhanan v. CIT (2001) 169 CTR 489 (SC) , the ld. CIT(A) confirmed the penalty levied by the A.O. u/s 271(1)(c) of the Act , vide appellate orders dated 11.01.2016 passed by learned CIT(A). 6. Aggrieved by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notices were returned back by the postal authorities. The assessee had accepted the quantum addition and no appeal was filed which confirms that the assessee has made bogus purchases and accommodation bills were procured. The ld. D.R. relied on the decision of Hon ble Supreme Court in the case of MAK Data P. Ltd. V. CIT (2013) 38 taxmann. Com 448(SC). 9. We have considered the rival contentions and also perused the material available on record and the legal decisions relied upon. We have observed that the assessee is engaged in the business of renting of Boom and Scissor Lifts which are used in the infrastructure projects. We have observed that the assessee has allegedly purchased spare parts costing ₹ 25,98,278/- from the following three parties who are alleged by Revenue to be hawala dealers and these purchases are alleged by Revenue to be bogus purchases being accommodation entries. Sr No. Name of the party Amount (in Rs) 1 M/s Arihant Traders 8,60,715/- 2 M/s Adinath Trading Co. 7,87,501/- 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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