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TMI Blog2017 (5) TMI 1263X X X X Extracts X X X X X X X X Extracts X X X X ..... ying GP rate of 10% on the said purchases over and above the GP rate shown by the assessee. Accordingly, appeal filed by the assessee is partly allowed - ITA No.302/PUN/2016, ITA No.364/PUN/2016, ITA Nos. 2144 to 2146/PUN/2014, ITA No.809/PUN/2016 - - - Dated:- 5-5-2017 - Ms. Sushma Chowla, JM And Shri Rajesh Kumar, AM Assessee by : Shri Sanket Joshi Revenue by : Ms. Sumitra Banerjee ORDER Per Sushma Chowla, JM Out of this bunch of appeals, cross appeals filed by the Revenue and the assessee are against the order of CIT(A)-2, Nashik, dated 16.12.2015 relating to assessment year 2009-10 against the order passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short the Act ). The second bunch of appeals filed by the Revenue in the case of Shri Vikram Sugriv Kale are against consolidated order of CIT(A), Aurangabad, dated 22.09.2014 relating to assessment years 2009-10 to 2011-12 against respective orders passed under section 143(3) r.w.s. 147 of the Act. Further, another appeal filed by the assessee in the case of Shri Deepak Tanaji Rainak is against the order of CIT(A)-2, Pune, dated 15.12.2015 relating to assessment year 2010-11 against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lowance of ₹ 5,61,354/- out of the total disallowance of ₹ 56, l3,536/- made by the A.a. in respect of purchases made from nine alleged hawala parties on the basis of information obtained from Maharashtra Sales Tax Dept. 2] The learned CIT(A) erred in holding that 10% of the purchases made by the assessee from the above parties were to be disallowed without appreciating that no disallowance was warranted on facts of the case. 3] The learned CIT(A) failed to appreciate that- a. The entire purchases made by the assessee from the nine parties were supported by purchase invoices and most of these purchases were also supported by delivery challans, transport receipts, weigh bridge receipts etc. and hence, there was no reason to doubt the genuineness of the said purchases. b. The payments to these parties were made through bank cheques and the A.O. had not brought any evidence on record to show that the payments made by the assessee to these parties were withdrawn by them and returned to the assessee in cash and hence, in the absence of any contrary evidence, there was no reason to doubt the genuineness of the payments made by the assessee to these parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods by the assessee to the extent of ₹ 56,13,536/- from nine parties which were declared by the Sales Tax Department as hawala dealers. The Assessing Officer during the course of assessment proceedings had received information from the Sales Tax Department and had show caused the assessee. In reply, the assessee asked for the statement recorded of the said persons. The Assessing Officer gave copies of statement in respect of three parties i.e. Hiten Enterprises, from whom purchases of ₹ 4,06,839/- were made, Payal Enterprises, purchases of ₹ 7,26,319/- and Shree Yamuna Implex, purchases of ₹ 3,25,924/-. In respect of balance six parties from whom purchases totaling ₹ 41,54,454/- were made, the assessee was not provided with the copy of statement recorded by the Sales Tax Department. The Assessing Officer however, issued notices under section 133(6) of the Act to the said suppliers which were not responded by the said parties. The assessee was not able to produce the suppliers before the Assessing Officer. Hence, the Assessing Officer made addition of ₹ 56,13,536/- by treating the said purchases to be non-genuine or bogus. 9. The CIT(A) conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T from the customers including the assessee but had not paid the same to the State Treasury. The Assessing Officer on receiving the aforesaid information had reopened the assessment in the case of assessee and had confronted the assessee with the aforesaid information. The Assessing Officer also issued summons under section 133(6) of the Act to the said six parties from whom purchases were made but the said notices were returned unserved since none of the parties were available on the given addresses. The assessee in this regard was asked to produce the said parties and confirm the transactions. The assessee in reply, claims that it had submitted purchase bills, consequent sale bills, weighbridge receipts and transportation receipts in order to establish that the transaction of purchases was genuine. The assessee further claims that the payments against these purchases were made through banking channel and the copy of bank statement was furnished in this regard. The assessee further claims that no case has been made by the Assessing Officer against the said payments made by the assessee to the said persons that cash had been withdrawn and handed over to the assessee. Another aspect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had asked for statements and / or any other documents which have not been supplied to the assessee. The learned Authorized Representative for the assessee before the Tribunal pointed out that the Assessing Officer had provided statements of three parties from whom the purchases totaling ₹ 9,49,240/- were made and no statements of other parties totaling purchases ₹ 22,49,425/- were made available to the assessee. However, the perusal of list of the companies filed before the CIT(A), copy of which is filed along with Appeal Memo reflects that there is difference in the figures of purchases though the total is shown at ₹ 31,98,665/-. Further, the assessee claims in the statement of facts that the Assessing Officer had not supplied any evidence in respect of purchases of ₹ 13,18,943/- to prove that the same were non- genuine. It is further stated that in respect of remaining purchases of ₹ 18,79,722/-, the Assessing Officer has relied on statements of four suppliers, whose bills were supplied to the Tribunal. In the Paper Book, the assessee has filed the copies of statements of three parties at pages 106 to 122 but in the statement of facts, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments of hawala suppliers were recorded by the Assessing Officer and were confronted to the assessee and the opportunity of cross-examination is also granted. However, the assessee did not avail the same. Further, transportation receipts could not be furnished in respect of any of the suppliers and in this view, the purchases made from the said parties were added as income of the assessee. Another proposition which has been laid down by the Tribunal in the case of ITO Vs. Shri Purushottam Shankar Kulkarni in ITA No.991/PN/2012, relating to assessment year 2009-10, order dated 07.04.2016, wherein the Assessing Officer has noted the payments in respect of alleged bogus purchases were outstanding even as on the date of completion of assessment. Further, the assessee was not able to furnish any evidence relating to transportation of goods. Further, in the case of Mukeshkumar Pushkaraj Mehta Vs. ITO (supra), the assessee himself admitted before the Assessing Officer that the purchases made from the impugned hawala dealers was treated as bogus and added to its income. In this regard, there was no question of granting opportunity to cross- examine and the plea of assessee regarding genuin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the impugned purchases to the extent of ₹ 14,59,082/-, where the copies of statements were provided to the assessee, then addition is to be restricted by applying GP rate of 10% on the said purchases over and above the GP rate shown by the assessee. Accordingly, appeal filed by the assessee is partly allowed and the appeal filed by the Revenue is dismissed. ITA Nos.2144 to 2146/PUN/2014, relating to assessment years 2009-10 to 2011-12 (Revenue s appeal) 13. This bunch of three appeals relating to the same assessee were heard together and are being disposed of by this consolidated order for the sake of convenience. However, reference is being made to the facts in ITA No.2144/PUN/2014 to adjudicate the issue. 14. The only issue raised in the present appeal is against the order of CIT(A) in restricting the addition on account of bogus purchases. 15. In the facts of the present case, the Assessing Officer had received information in respect of purchases made from hawala parties. The Assessing Officer asked the assessee to produce the purchase bills, delivery challans, lorry receipts, stock receipts, bank statement, etc. The assessee in reply, furnished the confirmat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21. The assessee is aggrieved by the order of CIT(A) in making addition on account of entire bogus purchases in the hands of assessee. The assessee claims that it had furnished evidence of purchases by way of purchase bills and also its utilization in civil construction business carried on by the assessee. The assessee had also furnished bank statement and other documents to prove its case. The Assessing Officer noted that the payments to M/s. Suyog Trading Link were made through demand draft and the rest payments were made in cash. The Assessing Officer treated the entire purchases to be bogus since information in this regard was received from the Sales Tax Department. The CIT(A) upheld the order of Assessing Officer. 22. We have already decided similar issue in the paras hereinabove and following the same parity of reasoning, we direct the Assessing Officer to restrict the addition by applying the GP rate of 10% on bogus purchases which is over and above the GP shown by the assessee. The appeal of the assessee is thus, partly allowed. 23. In the result, appeals of different assessee are partly allowed and the appeals of Revenue are dismissed. Order pronounced on this 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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