9911796707
TMI Blog2018 (6) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... led by the assessee against the order of the CIT(A)-16, Mumbai dated 30-042015 for assessment years 2009-10 to 2012-13, in the matter of order passed under Section 143(3) r.w.s. 147 of the Income Tax Act (hereinafter the Act ). 2. The common grievance of the assessee in all the years pertains to disallowance of bogus purchases made by the assessee. 3. The facts in brief are that for A.Y. 2009-10 the assessee filed its return of income on 26.09.2009 declaring total income of ₹.3,26,49,230/-. Subsequently, it came to knowledge of the Department that the assessee had obtained bogus purchase bills from a certain party, which is a havala dealer as per the list of suspicious dealers issued by the Sales Tax (VAT) Department, State of Maharashtra. The said list revealed the name of a party viz. Atul Traders from which the assessee had procured purchase bill(s) of ₹.8,58,707/- during the year under consideration. Accordingly, the case was reopened under Section 147 of the Act and the total income of the assessee was assessed at ₹.3,35,07,940/- after making addition of ₹.8,58,707/- on account of bogus purchase. During the course of assessment proceedings, notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant has filed an appeal. The grounds of appeal raised by the appellant relating to the issue that notice u/s 148 is illegal and invalid is being adjudicated first. The case of the appellant is covered by judgment of the Apex Court in the case of ACIT vs. Rajesh Jhaveri Stock Brokers (P) Ltd. in which it has been held as under:- 16. Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word reason in the phrase reason to believe would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. As observed by the Supreme Court in Central Provinces Manganese Ore Co. Ltd. v. ITO [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the AO. The copy of the VAT returns filed by M/s Atul Traders even after cancellation of the registration has been accepted online on the site of VAT department and copies of returns/challans were furnished before the AO. In identical circumstances the Mumbai 'D' bench of the Hon'ble ITAT has decided in the case of Ramesh Kumar Co. which has been relied upon by the A/R of the appellant that in such type of cases the AO has a duty to make further investigation to bring the facts on record that whether there was any immediate cash withdrawals from their account. The AO has made detailed investigation in this case for which I must compliment him. The AO has obtained bank account of Atul Traders which has been annexed as Annexure 1 to the assessment order approves that M/s. Atul Traders is a Hawala Dealer because he has made payments to the parties who has also been identified as Hawala dealers by the state VAT department and further there are regular huge cash withdrawals from the account of M/s. Atul Traders which gives credibility to the findings of the AO as recorded in the assessment order to make the addition. The AO has rightly relied on the case laws ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted the detailed reply in which all the details of facts and details and documents were submitted during the course of assessment proceedings. That assessee has actually in the regular course of business purchased and received the steel bars from M/s. Atul Traders (MVAT TIN No. 27220377351V PAN No. AAJPS1099L). The above mentioned purchases are made in the regular course of business and the same are supported by copies of the bills, delivery challans and payment by account payee cheques. That assessee has actually in the regular course of business purchased and received the steel bars from M/s. Atul Traders (MVAT TIN No. 27220377351V PAN No. AAJPS1099L) on various dates which is used in the manufacture of components such as plungers, stoppers, stems and gear blanks, used for finished goods. The assessee says that the above mentioned purchases from M/s. Atul Traders were used in manufacturing and sales thereof which were made in the regular course of business and the same were supported by copies of the bills/delivery challans. The sales tax assessment has been made by wrongly treating the said dealer and assessee's purchases as not genuine and di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On receiving the information from Sales Tax department at the time of sales-tax assessment assessee had collected the sales tax paid challans', returns filed, Ledger copy duly signed by the proprietor of M/s. Atul Traders and obtained PAN also and submitted the copies thereof to the AO. The assessee's total purchases during the year under reference were ₹.66031645/- as against the purchases from M/s. Atul Traders which the AO proposed to add was ₹.858707/- only. The ratio between the total purchases and the purchases from Atul Traders, Your Honour, the percentage is 1.30% which is very negligible considering the sales turnover of ₹.18,86,79,030/-. The assessee submitted the photocopies of the following during the assessment proceedings: 1) Copy of Purchase orders 2) Copy of Invoice copies and delivery challans 3) GRR report issued by our Stores and Inspection dept. 4) Bin card maintained by the stores for quantitative record. 5) Bank statement highlighting the payments confirming the payments made by Account Payee cheque. 6) Bank Certificate confirming the payments made by Account Payee Cheque and, 7) Ledger copy of At ..... X X X X Extracts X X X X X X X X Extracts X X X X
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