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TMI Blog2021 (5) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... entity had duly supported the impugned financial charges by banks and other institutes certificates. We thus find no reason to adopt a different approach in instant lis raising the very aspect of suspicious circumstances. The CIT(A) s action affirming the impugned finance charges disallowance stands reversed therefore. Assessee s appeal is allowed. - I.T.A. No. 1741/HYD/2017 - - - Dated:- 20-5-2021 - Shri S.S.Godara, Judicial Member And Shri Laxmi Prasad Sahu, Accountant Member For the Assessee : Shri P.Murali Mohana Rao, AR For the Revenue : Shri Sunil Kumar Pandey, DR ORDER PER S.S.GODARA, J.M. : This assessee s appeal for AY.2011-12 arises from the CIT(A)-2, Hyderabad s order dated 28-03-2016 passed in case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hows the importance attached to circumstances in the matter of evaluation of evidence. Direct evidence is not always necessary to reach an inference. It is drawn by appreciating a chain of evidence cumulatively. Law does not require that reliance on circumstantial evidence must answer to all and every hypothesis advanced by the assessee, however extravagant and fanciful the same might be. b) Direct evidence proves or disproves a fact directly. Circumstantial evidence allows a fact to be inferred from common course of natural events, human conduct and their relation to the facts of the particular case. This can be made use of in order to prove or disprove a fact in issue. The word evidence is used in 5ec.143(3) of the Income Tax Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication of the theory of use of circumstantial evidence and human probability. 5.4. The facts and circumstances of the case of the assessee is required to be judged in the light of principles enunciated in the above cases by the Hon'ble Apex Court. A perusal of the assessment order shows that the plea advanced by the assessee cannot be taken as cogent to claim huge expenditure on account of expenditure claimed of financial charges of ₹ 1,81,07,126/- in view of the following. (i) The assessee is stated to have been engaged in business of purchase and sale of steel and iron. (ii) During the previous year, the, financials depict purchases of ₹ 348,72,51,636/- (iii) During the previous year/ it recorded sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the said bills were insufficient or vague. (xi) The place of delivery was not mentioned. In some cases/ place of delivery was mentioned as 'head office'. When confronted, it was claimed that the goods were delivered to the buyer. How the goods moved and who met the expenses is not forthcoming. Similar transactions were found in respect of some of group concerns as mentioned by the AO in Peres 3 to 5 of the order. The transaction effected to the extent of ₹ 7,721 Cr followed the same pattern. (xii) The assessee failed to rebut the findings of the AO during the course of the appeal proceedings also by producing any supportive and cogent evidence. Therefore, there was no change with regard to Production of evi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial evidence and theory of human probability as evolved by the Hon'ble Apex court would come into play. If the entire facts and circumstances are considered as discussed above, prudence will guide a person to arrive at a conclusion that no transaction in purchase and sale has taken place during the previous year relevant to the assessment year under appeal. Assessee relied on the decision rendered in the assessee's own group case of M/s. Global Forgings Ltd for A.Y.2010-11 wherein the Hon'ble ITAT, Hyderabad Bench 'B', vide ITA No.1269/2014 dt.26-11-2014 has dismissed the appeal of the Department and upheld the order of the CIT(A) wherein the disallowance of financial charges was deleted. The relevant extract is as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... am of the considered opinion that no transaction in purchase and sale has taken place. This being the position, the question of payment of financial charges of ₹ 1,81,07,126/- cannot be treated as incidental to the business of the assessee. Therefore, the action of the AO is justified in disallowing ₹ 1,81,07,126/- claimed out of business expenditure. As a result, the grounds raised are dismissed . 4. We find no merit in Revenue s foregoing arguments challenging lack of bonafides on assessee s part in raising the impugned finance charges claim. It has already come on record that this tribunal s co-ordinate bench s decision(s) in assessee s very group concern s appeals ITA Nos.406, 543 and 1269/Hyd/2014 (M/s.Global Forging L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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