M/S. ANIKET TRADING COMPANY,NASHIK vs. DEPUTY COMMISSIONER OF INCOME TAX, NASHIK

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ITA 466/PUN/2017Status: DisposedITAT Pune15 March 2019AY 2009-104 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that while purchases from hawala dealers cannot be disallowed entirely if goods were received and movement/consumption details are available, an estimation of 10% of the alleged hawala purchases should be added over and above the normal GP rate.

What were the facts?

The assessee's appeal concerned the addition of Rs. 36,94,012/- made by the Assessing Officer for purchases from two hawala parties. The CIT(A) had dismissed the assessee's appeal.

What were the issues?

Whether entire purchases made through hawala parties can be disallowed, and if not, what is the appropriate method for estimation of such purchases.

Which sections of the Income-tax Act were involved?

Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE

Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY

For Appellant: Shri Sanket Joshi
For Respondent: Shri Pankaj Garg

आदेश / ORDER

PER R.S.SYAL, VP : This appeal by the assessee is directed against the order passed by the CIT(A)-1, Nashik on 01-12-2016 in relation to the assessment year 2009-10.

2.

The only issue raised in this appeal through various grounds is against the confirmation of addition of Rs.36,94,012/- made by the Assessing Officer by disallowing entire purchases made through two hawala parties on the basis of information received

ITA No.466/PUN/2017 M/s. Aniket Trading Company

from Sales Tax Department. The ld. CIT(A) dismissed the appeal

of the assessee.

3.

We have heard the rival submissions and gone through the

relevant material on record. It is seen that cases of several

assessees who had obtained bogus purchases from hawala dealers

have come up for consideration before the Pune Benches of the

Tribunal. Vide the lead order in the case of M/s. Chhabi

Electricals Pvt. Ltd. and others Vs. DCIT dated 28-04-2017 in ITA

No.795/PUN/2014 and others, the Tribunal has made certain

categories. Category No. IV of the said order, which is germane to

the instant appeal, provides as under :

“IV. The next instance is the case of goods which have been admittedly sold by the hawala dealer and has been received by the assessee, who in turn had maintained quantitative details and also evidence of its movement i.e. transportation details and quality control details of consumption of the said material or exact details of sale of the same consignment through same transporter directly to the party, then the total purchases cannot be added in the hands of assessee. However, since the purchases are made from the grey market, some estimation needs to be made in the hands of assessee. The Tribunal in M/s. Chetan Enterprises Vs. ACIT (supra) has already held that the addition be made by estimating the same @ 10% of the alleged hawala purchases, over and above the GP shown by the respective assessee.”

4.

Going by the ratio laid down in the case of M/s. Chhabi

Electricals Pvt. Ltd. and others (supra), which has been followed in

enumerable number of cases, we hold that the addition should have

3 ITA No.466/PUN/2017 M/s. Aniket Trading Company

been sustained @10% of alleged hawala purchases over and over

the normal GP rate shown by the assessee.

5.

In the result, the appeal is allowed for statistical purposes.

Order pronounced in the Open Court on 15th March, 2019.

Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; �दनांक Dated : 15th March, 2019 सतीश आदेश क� क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to: अ�ेिषत आदेश आदेश आदेश अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. 3. The CIT(A)-1, Nashik 4. The Pr. CIT-1, Nashik िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे 5. “बी” / DR ‘B’, ITAT, Pune; 6. गाड� फाईल / Guard file. आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

ITA No.466/PUN/2017 M/s. Aniket Trading Company

Date 1. Draft dictated on 14-03-2019 Sr.PS 2. Draft placed before author 14-03-2019 Sr.PS 3. Draft proposed & placed JM before the second member 4. Draft discussed/approved JM by Second Member. 5. Approved Draft comes to Sr.PS the Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *

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