9911796707
TMI Blog2016 (10) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... said hawala dealer during the reassessment proceeding. The ld CIT (A) further observed that statement and affidavit filed by hawala dealer before Sales Tax Department have evidentiary value. In fact such evidence was not available before Assessing Officer or before ld CIT (A). The copies of such statements or affidavits were never confronted with the assessee either by Assessing Officer or by ld CIT(A). Even otherwise, if it is considered for the sake of consideration for a moment that the statement or the affidavit filed before the sale tax Department has any relevance, the assessing officer should have carried out independent enquiry and to provide opportunity to the assessee to counter the same. - Decided in favour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... count of the assessee. The notice under section 133(6) sent to the parties were duly served. Section 69C of the Act has no application on the facts of the present case. The AO disallowed the entire purchases. The AO failed to appreciate that the purchases were made by account payee cheques which cannot be termed as a bogus. The AO relied on the information of third-party which is not admissible against the assessee. The AO has not made any independent enquiry or details of the bank accounts of the supplier to find out whether there was any immediate cash withdrawal from their accounts. The ld AR of the assessee further relied upon the decision of Hon'ble jurisdictional High Court in Nikunj Eximp Enterprises Private Limited reported vide 372 ITR 619(Bom) and various decisions of this Tribunal, copies of which are filed in the paper book. On the other hand, the Learned DR for the revenue argued that notices sent to all those dealers/ parties but nobody appeared nor filed their reply in response to the notice served upon them. The assessee has not called any of the parties during the reassessment proceeding to prove the genuineness of purchases. The GP rate of the assessee is fluctuat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "We have heard the rival submissions and perused the material before us. We find that AO had made the addition as one of the supplier was declared a hawala dealer by the VAT Department. We agree that it was a good starting point for making further investigation and take it to logical end. But, he left the job at initial point itself. Suspicion of highest degree cannot take place of evidence. He could have called for the details of the bank accounts of the suppliers to find out as whether there was any immediate cash withdrawal from their account. We find that no such exercise was done. Transportation of good to the site is one of the deciding factors to be considered for resolving the issue. The FAA has given a finding of fact that part of the goods received by the assessee was forming part of closing stock. As far as the case of Western Extrusion Industries (supra)is concerned, we find that in that matter cash was immediately withdrawn by the supplier and there was no evidence of movement of goods. But, in the case before us, there is nothing, in the order of the AO, about the cash traial. Secondly, proof of movement of goods is not in 9 ITA No.5295/Mum/2013 ACIT Vs. Tarla R Sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther in ACIT Vs. Talra R Shah in ITA No.5295/Mum/2013dated 28.11.2014, similar addition to the tune of ₹ 4,98,80,892/- was deleted by the Tribunal holding as under:- "8. We have carefully perused the orders of the lower authorities and the relevant documentary evidences brought before us. We find that the AO has made the addition as some of the suppliers of the assessee were declared Hawala dealer by the Sales tax Department. This may be a good reason for making further investigation but the AO did not make any further investigation and merely completed the assessment on suspicion. Once the assessee has brought on record the details of payments by account payee cheque, it was incumbent on the AO to have verified the payment details from the bank of the assessee and also from the bank of the suppliers to verify whether there was any immediate cash withdrawal from their account. No such exercise has been done. The Ld. CIT(A) has also confirmed the addition made by the AO by going on the suspicion and the belief that the suppliers of the assessee are Hawala traders. We also find that no effort has been made to verify the work done by the assessee from the Municipal Corporation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on on the basis of statements given by the parties before the Sales tax department. We notice that the ld.CIT(A) has taken note of the fact that no sales could be effected without purchases. He has further placed reliance on the decision rendered by Hon'ble Gujarat High Court in the case of CIT Vs. M.K. Brothers (163 ITR 249). He has further relied upon the decision rendered by the Tribunal in the cae of ITO Vs. Premanand (2008)(25 SOT 11)(Jodh), wherein it has been held that where the AO has made addition merely on the basis of observations made by the Sales tax dept and has not conducted any independent enquiries for making the addition especially in a case where the assessee has discharged its primary onus of ITA. No.5920/Mum/2013 and 6203/Mum/2013 7 showing books of account, payment by way of account payee cheque and producing vouchers for sale of goods, such an addition could not be sustained. The Ld CIT(A) has also appreciated the contentions of the assessee that he was not provided with an opportunity to cross examine the sellers, which is required to be given as per the decision of Hon'ble Kerala High Court in the case of Ponkunnam Traders (83 ITR 508 & 102 ITR 366). Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od starting point for making further investigation and take it to logical end. But, he left the job at initial point itself. Suspicion of highest degree cannot take place of evidence. He could have called for the details of the bank accounts of the suppliers to find out as whether there was any immediate cash withdrawal from their account. We find that no such exercise was done. Transportation of good to the site is one of the deciding factor to be considered for resolving the issue. The FAA has given a finding of fact that part of the goods received by the assessee was forming part of closing stock. As far as the case of Western Extrusion Industries (supra)is concerned, we find that in that matter cash was immediately withdrawn by the supplier and there was no evidence of movement of goods. But, in the case before us, there is nothing, in the order of the AO, about the cash trail. Secondly, proof of movement of goods is not in doubt. Therefore, considering the peculiar facts and circumstances of the case under appeal, we are of the opinion that the order of the FAA does not suffer from any legal infirmity and there is not sufficient evidence on file to endorse the view taken by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
