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TMI Blog2017 (3) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... ogus purchases - Revenue has received information from Maharashtra Sales Tax Department as well Information was received by the AO from DGIT (Inv.), from where it was unraveled that these three parties were accommodation entry providers issuing bogus bills - Held that:- No attempt has been even made before us to prove genuineness of purchases to prove genuineness of the material purchased and that the said material been used wholly and exclusively for the purpose of the manufacturing/business activities of the assessee nor any effort has been made even before us to co-relate quantitative reconciliation of quantities of sale with purchases so made nor the assessee could prove , correlate and reconcile the consumption of material so purchased with the manufacturing/ business activity of the assessee. We do not find any merit in the contentions of the assessee. In the absence of quantitative reconciliation of material so allegedly purchased with sale, consumption or stock in hand held by the assessee, the plea of the assessee to adopt gross profit ratio is devoid of any merits and is hereby repelled. - Decided against assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... penses of ₹ 56,42,384/- claimed under the head 'Financial and Administrative Expenses' by the CA of the assessee Sh. M N Ladiwala who was authorized representative of the assessee company , made disallowance to the tune of ₹ 2,82,119/- which was added by the AO to the income of the assessee, vide assessment order dated 28-02-2014 passed by the AO u/s 143(3) of 1961 Act, which addition made by the AO in the assessment order of the AO got upheld by the ld. CIT(A) as the assessee did not pressed this ground before the ld CIT(A) who accordingly dismissed this ground of appeal on being not pressed by the assessee. The assessee has raised this ground before the tribunal and assailed the additions made by the AO which got upheld by learned CIT(A) by dismissal of the appeal on this ground as not being pressed. The ld. Counsel for the assessee submitted that the assessee is agreeable to the disallowance of 5% various expenses claimed under the head 'Financial and Administrative expenses' which have been made by the AO as the assessee surrendered 5% of total expenses incurred towards 'Financial and Administrative Expenses' but , however, even the statutory dues which were paid to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Enterprises ADOPJ7500P 27320257792V 421052 The AO issued notices to these parties u/s 133(6) of 1961 Act but none of the parties submitted replies and these notices remained un-complied with. Notice u/s 133(6) of 1961 Act issued to M/s Vitrag Traders Private Limited which notice was returned un-served. The AO asked the assessee to furnish the details of purchases along-with transportation memo / challan/biliti/date of delivery with bills etc along with supporting documents but the assessee did not furnish details called for by the AO. In response to this, the assessee submitted copies of ledger accounts of the aforesaid parties along with names, addresses, VAT, TIN No. etc. and requested to consider the purchases as genuine purchases. The assessee has stated that it has already submitted the ledger and the assessee company is unable to produce any evidence like transportation/delivery challans/memo's etc.. The assessee submitted that with respect to M/s Blue Cross Network, the amount of purchases of ₹ 2,52,001/- has been written back as income in the year ending 31-03- 2013 as the amount was not paid to them on account of dispute and other reasons and hence no addition i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reiterated its submissions as were made before the AO and assailed the assessment order dated 28-02-2104 passed by the AO u/s 143(3) of 1961 Act. The assessee submitted copies of invoices issued by these three parties along with their respective ledger accounts. It was submitted that necessary documentary evidences were duly submitted before the AO about the purchase of material and payments made thereof to the so called alleged hawala dealers . It was submitted that these are genuine purchases and when purchases were made , all the three dealers were holding valid MVAT/CST registration with Maharashtra Sales Tax Department . It was submitted that their registration certificate was cancelled subsequently by Maharashtra Sales Tax Department retrospective from an earlier dates. It was thus submitted that these are genuine purchases which should be allowed . It was also submitted that in case of one Blue Cross Networks from whom purchases to the tune of ₹ 2,52,001/- was made , no payments were made to the said party due to some dispute and finally the amount standing to their credit in books of accounts were written back and offered for tax as unpaid liability due to cessation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , wherein the said amount of ₹ 2,52,001/- stood credited under the head 'other income'. 10. Ld. D.R. submitted that the assessee has made bogus purchases from three parties for which the assessee could not prove consumption of material or sale or whether the said material was part of closing stock, which disallowance of these purchases were rightly confirmed by the learned CIT(A). She relied upon the appellate order of learned CIT(A). 11. We have considered rival contentions and also perused the material available on record including the case laws cited by the assessee. We have observed that assessee is engaged in manufacturing of signage boards. The assessee has made purchases of ₹ 9,68,628/- from three parties who were allegedly hawala dealers engaged in issuing bogus bills being accommodation entries wherein no material was supplied to the purchaser by these three parties as these three parties were stated to be not engaged in any business. The Revenue has received information from Maharashtra Sales Tax Department as well Information was received by the AO from DGIT (Inv.), from where it was unraveled that these three parties were accommodation entry providers issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the manufacturing/business activities of the assessee , which, inter-alia, is the mandate of section 37 of 1961 Act .The assessee has not brought on record evidences to prove genuineness of the transaction for purchase of the material and also not able to prove the consumption of the material for manufacturing/business activities of the assessee before the authorities below. No such attempt has been even made before us to prove genuineness of purchases to prove genuineness of the material purchased and that the said material been used wholly and exclusively for the purpose of the manufacturing/business activities of the assessee nor any effort has been made even before us to co-relate quantitative reconciliation of quantities of sale with purchases so made nor the assessee could prove , correlate and reconcile the consumption of material so purchased with the manufacturing/ business activity of the assessee. We do not find any merit in the contentions of the assessee. . Under these circumstances keeping in view factual matrix of the instant appeal, we do not find any infirmity in the appellate order dated 23-06-2016 passed by ld. CIT(A) which we confirm/sustain . In the absenc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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