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TMI Blog2020 (8) TMI 128X X X X Extracts X X X X X X X X Extracts X X X X ..... having been made and confirmed u/s 69 of the Act, is unwarranted. The same is accordingly deleted. In so far as the disallowance of depreciation of ₹ 4,45,420/- is concerned, we direct to restrict it by reducing the actual cost of such machines by 15% from ₹ 59,38,955/- to ₹ 50,48,111/- and accordingly disallow the depreciation on the excess amount of ₹ 8,90,844/-. - Decided partly in favour of assessee. - ITA No.956/PUN/2017 - - - Dated:- 5-8-2020 - Shri R.S. Syal, Vice President And Shri S.S. Viswanethra Ravi, Judicial Member For the Assessee : Shri Kishor Phadke For the Revenue : Shri S.P. Walimbe ORDER PER R.S.SYAL, VP : This appeal by the assessee is directed against the order date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. The AO got conducted an independent enquiry by calling information u/s 133(6) of the Income-tax Act, 1961 (hereinafter also called `the Act‟) from the above hawala dealers and the banks in which they were maintaining accounts for such hawala racket. The enquiry transpired that there was no existence of genuine businesses and further the bank accounts indicated that the same were used for only accommodation entries in as much as the cheques accepted on account of fake sale bills were deposited and simultaneously cash was withdrawn for returning the money from whom these were taken, after deducting commission. The Asst. Commissioner of Sales-tax (Investigation), Mumbai also carried out investigation in the hawala matter and recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the model number of the machine etc. A copy of the remand report was given to the assessee for comments, who justified its stand. The ld. CIT(A) after considering the objections of assessee, remand report and other relevant evidence, did not accept the genuineness of the purchase transactions and found that the parties issued bills for paltry commission. He further observed that since the machines were not purchased from the so-called hawala operators, it could be safely inferred that these were purchased from open market and only the bills were taken from M/s. Prathamesh Impex, Mumbai and M/s. Meridian Sales Pvt. Ltd., Mumbai. Still further, he did not find any force in the contention of the assessee that the said machines were hypothecate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany which had manufactured these machines . The ld. CIT(A) in para 5.2 of the impugned order has observed that: Since the alleged machines were not purchased from the so-called hawala operators, it can be safely inferred that these were purchased from the open market and only the bills were taken from M/s. Prathamesh Impex, Mumbai and M/s. Meridian Sales Pvt. Ltd., Mumbai . In the later part of the same para, he further observed that: It is not in dispute that machines purchased from the open market were found installed at the factory premises of the appellant firm . As to the contention of assessee that the said machines were hypothecated with the Chikhali Urban Co-Op. Bank, Jalna Branch, ld. CIT(A) held that the: same was also immater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 100/- initially went out from the coffers of the assessee through banking channel, the same could not be treated as unexplained as to bring it within the purview of section 69 of the Act. In the like manner, when the assessee purchased machines in the open market at ₹ 85/-, out of ₹ 99/- received back from the hawala operators, again, the purchases to the tune of ₹ 85/- also cannot be considered as made from any unexplained source. In the entire transactions of obtaining fake bills from the hawala operators and actually installing such machines by purchasing them from grey market, the only thing which can call for disallowance is depreciation claimed by the assessee on excess purchase price of the machines. The ld. A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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