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TMI Blog2018 (4) TMI 277X X X X Extracts X X X X X X X X Extracts X X X X ..... confirming the disallowance to the extent of 25%. 2. Without considering facts and circumstances of the case and the law obtaining the learned Commissioner of Income Tax (Appeals)-1, Nashik has erred in confirming the disallowance to the extent of 25% which is without any basis and is on a higher side. 3. The only issue raised in the present appeal is against the addition made on account of bogus purchases. 4. Briefly, in the facts of the case, the assessee was engaged in the business of manufacturing of steel products. The Assessing Officer received information from Sales Tax Department, Govt. of Maharashtra that certain persons were involved in providing bogus purchase bills to the beneficiaries. The assessee was one of such beneficiaries and the total purchases made by the assessee were to the extent of ₹ 10,00,142/-. The case of assessee was reopened under section 148 of the Act. The Assessing Officer in view of information received under section 133(6) of the Act, held the assessee to have accepted bogus accommodation bills of purchases and entire purchases of ₹ 20,00,492/-, (original hawala of ₹ 10,00,142/- and new hawala of ₹ 10,00,142/-) we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties, the issued purchases made from the said parties could not be verified. The CIT(A) observed that consumption detail was no testimony to the fact that the purchases were not inflated and parties were not bogus and hence, he restricted the disallowance to 25% of total purchases; against which the assessee is in appeal. 10. The case of assessee before us is that in order to establish the genuineness of purchases, it had supplied ledger accounts of suppliers - copies of bills of purchases, movement of goods received, purchase orders, bank statements showing payments made through bank to supplier, purchase register and production flow chart with drawing and quantity used statement. The assessee also sought copy of statement which was recorded, on the basis of which the said person was called as hawala dealer. The assessee also sought an opportunity to cross-examine the alleged hawala dealer. The assessee regarding the fact that the letters were received back with a remark that parties were not traceable pointed out that the purchase bills and proof of payments through bank established the case of purchase of goods from the said parties. In view of above said evidences bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransportation 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 which the assessee points out is that when he came to know that the VAT collected by the said dealers has not been deposited with the Sales Tax Department, he voluntarily revised his return under MVAT Act by withdrawing the set off of claim in the earlier return and paid the taxes with interest. Another exercise carried out by the assessee with regard to purchases and sales was that the same quantity of goods received were sold to their customers, wherein the quantity of goods purchased from so-called hawala dealers tallied with the supplies made by the assessee to its customers. The transportation expenditure in respect of goods purchased from the said parties was incurred by the assessee through account paye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idence 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 admits to have received the statement of four suppliers. Before the CIT(A) also, the claim of assessee was that no statements or evidence in respect of impugned purchases to the extent of ₹ 14,32,856/- has been provided. This aspect came to the knowledge of Tribunal only while deciding the present appeal and in view thereof, the matter needs to be set aside to the file of Assessing Officer for verifying the copies of statements supplied to the assessee and thus, the total amount of purchases in this regard. In case the basic documents are not available with the Assessing Officer, then merely on the basis of allegation of impugned purchases from hawala dealers, no addition is warranted in the hands of assessee. However, in case the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee 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 genuineness of sales was not made before the Assessing Officer and further, no evidence in the form of delivery challans furnished by the assessee and hence, the purchases were added in the hands of assessee. 13. The facts of the present case as pointed out in the paras hereinabove are at slight variance. The first aspect was the said parties are hawala dealers and the assessee has made purchases from such hawala dealers, who though collected VAT but had not deposited in the Government Treasury, is common in respect of the cases. However, in the present case before the Tribunal, the assessee claims that it had made available the evidence proving the genuineness of purchases made by it by way of copies of transportation receipts, weighbridge receipts and also the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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