Keval Kadu Deore, Nashik V. Deputy Commissioner of Income-tax,

ITA 1997/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5425 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 06-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SABANA PARVEEN
• Keywords: Bogus purchase; Opportunity of cross examination
• Section: 142(1); 133(6); 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 1997 /P U N/201 6 / ASSESSMENT YEAR : 2 0 1 0 - 1 1 SHRI KEVAL KADU DEORE, PLOT NO.4, SHIV PARVATI BUNGLOW, PUMPING STATION ROAD, NASHIK 422013 . / APPELLANT PAN: A DNPD3164C VS. THE DY . COMMISSIONER OF INCOME - TA X, CIRCLE 1, NASHIK . / RESPONDENT / APPELLANT BY : S HRI SANKET JOSHI / RESPONDENT BY : MS SABANA PARVEEN / DATE OF HEARING : 0 3 . 1 0 .201 8 / DATE OF PRONOU NCEMENT: 15 . 1 0 .201 8 / ORDER PER SUSHMA CHOWLA, J M : TH E APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF CIT (A) - 1 , NASHIK , DATED 2 9 .0 6 .201 6 RELATING TO ASSESSMENT YEAR 20 1 0 - 1 1 AGAINST ORDER PASSED UNDER SECTION 14 4 R.W.S. 147 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ITA NO. 1997 /P U N/20 1 6 SHRI KEVAL KADU DEORE 2 1 ] THE LEARNED CIT(A) ERRED IN CONFIRM IN G THE DISALLOWANCE OF RS.5,30,204/ - OUT OF THE TOTAL DISALLOWANCE OF RS.21,20,814/ - MADE BY THE A.O. IN RESPECT OF PURCHASES M ADE FROM ALLEGED HAWALA PARTIES ON THE BASIS OF INFORMATION OBTAINED FROM MAHARASHTRA SALES TAX DEPT. 2] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE 25 % OF THE AMOUNT OF PURCHASES MADE FROM THE ALLEGED HAWALA PARTIES WAS TO BE DISALLOWED WITHOUT APPRECIA TING THAT NO SUCH DISALLOWANCE WAS WARRANTED ON FACTS OF THE CASE. 3] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT - A . THE ENTIRE PURCHASES MADE BY THE ASSESSEE FROM THE ABOVE PARTIES WERE SUPPORTED BY TAX INVOICES AND OTHER DOCUMENTARY EVIDENCES AND HENCE , THERE WAS NO REASON TO DOUBT THE GENUINENESS OF THE SAID PURCHASES. B . THE PAYMENTS TO THE SAID PARTIES WERE MADE THROUGH BANK CHEQUES AND THE A.O. HAD NOT BROUGHT ANY EVIDENCE ON RECORD TO SHOW THAT THE PAYMENTS MADE BY THE ASSESSEE TO THESE PARTIES WERE WITHDRAWN BY IT AND RETURNED TO THE ASSESSEE IN CASH AND HENCE, IN THE ABSENCE OF ANY CONTRARY EVIDENCE, THERE WAS NO REASON TO DOUBT THE GENUINENESS OF THE PAYMENTS MADE BY THE ASSESSEE TO THESE PARTIES. 4] THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH AT A . THE ABOVE SUPPLIERS HAD NOT PAID VAT AND HENCE, THEY HAD LEFT THEIR REGISTERED PREMISES, AND HENCE, THE ADDITION MADE BY IGNORING THE VARIOUS DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE WAS NOT JUSTIFIED MERELY BECAUSE THE ASSESSEE WAS NOT ABLE T O PRODUCE THESE PARTIES. B . THE A.O. HAD HIMSELF ADMITTED IN THE ASST. ORDER THAT HE WAS NOT ABLE TO LOCATE THE ABOVE ALLEGED HAWALA PARTIES AND THUS, THE A.O. WAS IN NO POSITION TO GRANT THE OPPORTUNITY OF CROSS EXAMINATION OF THESE PARTIES TO THE ASSESSEE AND HENCE IN VIEW OF THE RATIO LAID DOWN BY HON'BLE SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES V. CCE [CIVIL APPEAL NO.4228/2006 DATED 02.09.2015], THE ADDITION MADE SOLELY ON THE BASIS OF STATEMENT OF SUCH SUPPLIERS RECORDED AT THE BACK OF THE ASSESSEE WAS NOT JUSTIFIED AT ALL. 5] WITHOUT PREJUDICE, THE ASSESSEE SUBMITS THAT THE DISALLOWANCE MADE @ 25 % OF THE AMOUNT OF PURCHASES IS VERY HIGH AND THE SAME MAY BE RESTRICTED TO A REASONABLE LEVEL CONSIDERING THE FACTS OF THE CASE. 3. THE ISSU E RAISED IN THE PRESENT APPEAL IS AGAINST ADDITION MADE ON ACCOUNT OF PURCHASES MADE FROM ALLEGED HAWALA PARTIES ON THE BASIS OF INFORMATION RECEIVED FROM MAHARASHTRA SALES TAX DEPARTMENT. ITA NO. 1997 /P U N/20 1 6 SHRI KEVAL KADU DEORE 3 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD FURNISHED R ETURN OF INCOME DECLARING TOTAL INCOME OF 46,61,000/ - . THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT THAT THE ASSESSEE HAD MADE PURCHASES FROM PARTIES WHO WERE ALLEGED TO BE HAWALA PARTIES BY THE MAHARASHTRA SALES TAX DEPARTME NT. IN THE STATEMENTS RECORDED, THE PARTIES HAD ACCEPTED THAT THEY HAD ISSUED BOGUS BILLS TO VARIOUS PERSONS AND NO ACTUAL TRANSACTION OF SALE / PURCHASE OF GOODS HAD BEEN EFFECTED. IN RESPECT OF ASSESSEE, INFORMATION WAS WITH REGARD TO PURCHASES FROM M/ S. SUNICO TRADERS PVT. LTD. OF 21,20,814/ - . THE ASSESSING OFFICER INITIALLY ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT TO THE ASSESSEE. THEREAFTER, THE ASSESSING OFFICER REOPENED ASSESSMENT UNDER SECTION 147 / 148 OF THE ACT. IN REPLY, THE ASSESSEE SUBMITTED THAT ORIGINAL RETURN OF INCOME FILED BY IT MAY BE TREATED AS RETURN FILED IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT. IN ORDER TO VERIFY THE GENUINENESS OF PURCHASES, NOTICE UNDER SECTION 133(6) OF THE ACT WAS ISSUED TO SUPPLIER M/S. SUNICO TRADERS PVT. LT D., WHICH WAS RETURNED BACK BY THE POSTAL AUTHORITIES WITH REMARK NOT KNOWN. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE WAS ELECTRICAL CONTRACTOR AND HAD NOT FILED ANY COPIES OF OCTROI RECEIPTS, COPY OF ANY LORRY RECEIPTS FOR TRANSPORTATION OF MATERI AL PURCHASED, STOCK REGISTER SHOWING CONSUMPTION OF MATERIAL PURCHASED. THE ASSESSING OFFICER THUS, HELD THE ASSESSEE NOT TO HAVE PROVED THE GENUINENESS OF PURCHASES. SHOW CAUSE NOTICE IN THIS REGARD WAS ISSUED TO THE ASSESSEE, WHO FAILED TO APPEAR BEFOR E THE ASSESSING OFFICER AND HENCE THE ASSESSMENT WAS COMPLETED EX - PARTE UNDER SECTION 144 OF THE ACT. THE ASSESSING OFFICER TREATED THE ENTIRE PURCHASES AS ADDITIONAL INCOME OF ASSESSEE. ITA NO. 1997 /P U N/20 1 6 SHRI KEVAL KADU DEORE 4 5. BEFORE THE CIT(A), THE ASSESSEE FURNISHED WRITTEN SUBMISSIONS, W HICH WERE FORWARDED TO THE ASSESSING OFFICER, WHO IN TURN, SUBMITTED REMAND REPORT, WHICH IS REPRODUCED UNDER PARA 4.1 AT PAGES 2 AND 3 OF APPELLATE ORDER. IN THE REMAND REPORT, THE ASSESSING OFFICER ALLEGES THAT NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED ON 28.03.2014 FIXING THE HEARING ON 10.04.2014. THE ASSESSEE OBJECTED TO THE REASONS RECORDED FOR REOPENING THE ASSESSMENT VIDE LETTER DATED 04.04.2014. THE SAID OBJECTIONS WERE DISMISSED BY THE ASSESSING OFFICER ON 04.04.2014 ITSELF. THEREAFTER , NOTICE UNDER SECTION 142(1) OF THE ACT WAS ISSUED ALONG WITH QUESTIONNAIRE FIXING THE HEARING ON 21.04.2014. THE ASSESSEE VIDE LETTER DATED 21.04.2014 REQUESTED FOR TIME, WHICH WAS GRANTED BY THE ASSESSING OFFICER AND HEARING WAS FIXED ON 25.04.2014. I N RESPONSE, THE ASSESSEE FURNISHED WRITTEN SUBMISSIONS. THE ASSESSING OFFICER FURTHER POINTS OUT THAT NOTICE UNDER SECTION 133(6) OF THE ACT ISSUED TO VERIFY THE CLAIM OF PURCHASES MADE BY ASSESSEE. HOWEVER , SUCH NOTICES WERE RETURNED BACK. BASED ON THE ENQUIRY AND THE FACT THAT ASSESSEE WAS NOT ATTENDING AND ONLY MAKING WRITTEN SUBMISSIONS, SHOW CAUSE NOTICE WAS AGAIN ISSUED ON 31.10.2014 FIXING THE HEARING ON 20.11.2014, BUT NO RESPONSE WAS RECEIVED FROM THE ASSESSEE. THE ASSESSING OFFICER THUS, COMPL ETED THE ASSESSMENT. THE CIT(A) FURTHER NOTES THAT DURING APPELLATE PROCEEDINGS, SUFFICIENT OPPORTUNITY WAS ALLOWED TO THE ASSESSEE. THE CIT(A) RELIED ON SERIES OF DECISIONS AFTER NOTING THE FACT IN PARA 4.2.3 AT PAGE 4 OF APPELLATE ORDER THAT THE ASSESS ING OFFICER HAD NOT DONE ANY ENQUIRY OR BROUGHT ANY COGENT OR CORROBORATIVE EVIDENCE ON RECORD TO SHOW THAT THE PURCHASES ARE BOGUS. VIDE PARA 4.88 AT PAGE 47 OF APPELLATE ORDER, IT IS FURTHER OBSERVED THAT THE PARTIES FROM WHOM PURCHASES WERE MADE WERE N OT PRODUCED EITHER BEFORE THE ASSESSING OFFICER OR BEFORE THE CIT(A) BUT THE ASSESSING OFFICER HAD NOT ITA NO. 1997 /P U N/20 1 6 SHRI KEVAL KADU DEORE 5 BROUGHT ANY EVIDENCE ON RECORD TO PROVE THAT PURCHASES WERE BOGUS EXCEPT RELIED ON INFORMATION RECEIVED FROM SALES TAX DEPARTMENT. THE CIT(A) FURTHER OB SERVED THAT THOUGH THE ASSESSEE HAS FILED LEDGER EXTRACT OF SUPPLIERS REFLECTING ALL THE PURCHASES AND PAYMENTS BY ACCOUNT PAYEE BANK CHEQUES BUT IN THE AB SENCE OF PRODUCTION OF PARTY, THE ISSUE THAT PURCHASES WERE INDEED FROM THEM COULD NOT BE VERIFIED. FURTHER, NO CONFIRMATION OF PURCHASES FROM THE PART Y WERE PRODUCED . SINCE THE ASSESSING OFFICER HAD NOT DOUBTED THE SALES, CIT(A) HELD THAT ENTIRE PURCHASES COULD NOT BE HELD TO BE BOGUS. HOWEVER, ADDITION WAS RESTRICTED TO 25% OF PURCHASES I.E. 5,30,204/ - . 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). 7. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE BEFORE US HAS VEHEMENTLY POINTED OUT THAT BEFORE THE ASSESSING OFFICER VIDE LETTER DATED 04.04.2014, COPY OF WHICH IS FILED AT PAGE 1 OF PAPER BOOK , COPY OF STATEMENT WAS ASKED AND EVEN CROSS EXAMINATION WAS SOUGHT . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT WHERE THE ONLY BASIS FOR REOPENING THE ASSESSMENT WAS AFFIDAVIT FILED BY SUPPLIER PARTY BEFORE THE SALES TAX DEPARTMENT, THEN COPY OF THE SAID AFFIDAVIT MAY BE ISSUED TO THE ASSESSEE. HE FURTHER POINTED OUT THAT THE STATEMENT RECORDED OF THIRD PARTY BEHIND BACK OF ASSESSEE WAS NOT CONFRONTED TO THE ASSESSEE AND NO OPPORTUNITY TO CROSS - EXAMINATION WAS G IVEN AND HENCE, THE SAME LACKS THE EVIDENTIARY VALUE AND COULD NOT BE THE BASIS FOR REOPENING. SUCH A STATEMENT WAS ALSO MADE IN THE LETTER DATED 04.04.2014. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE BEFORE US POINTED OUT THAT THE ASSESSING OFFICER HAD NOT GIVEN THE COPY OF AFFIDAVIT RECORDED AND NO CROSS - EXAMINATION WAS ALLOWED TO THE ITA NO. 1997 /P U N/20 1 6 SHRI KEVAL KADU DEORE 6 ASSESSEE. HE FURTHER POINTED OUT THAT CONFIRMATION FROM THE SAID PARTY WAS FILED, WHICH IS PLACED AT PAGES 14 AND 15 OF PAPER BOOK. FURTHER, THE ASSESSEE HAD ALSO FURNISHED CERTIFICATE OF REGISTRATION OF SAID PARTY, WHICH IS PLACED AT PAGE 16 OF PAPER BOOK AND COPY OF VAT RETURN, WHICH IS PLACED AT PAGE 17 OF PAPER BOOK. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ISSUE STANDS COVERED BY SERIES OF ORDERS OF PUNE BENCH OF TRIBUNAL AND ALSO BY THE DECISION OF THE HONBLE HIGH COURT OF GUJRAT IN PR.CIT VS. TEJUA ROHITKUMAR KAPADIA IN TAX APPEAL NO.691 OF 2017, JUDGMENT DATED 18.09.2017 FOR THE PROPOSITION THAT WHERE TRANSACTIONS WE RE CONFIRMED BY THE SAID PARTY AND THERE WAS NO EVIDENCE TO SHOW THAT THE AMOUNT WAS RECYCLED BACK TO THE ASSESSEE, THEN THERE WAS NO QUESTION OF MAKING ANY ADDITION IN THE HANDS OF ASSESSEE. HE FURTHER STATED THAT THE HON'BLE SUPREME COURT HAS DISMISSED SPECIAL LEAVE PETITION OF THE REVENUE AGAINST THE SAID DECISION. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT THE ASSESSING OFFICER HAD MADE ENQUIRIES AND HAD ALSO ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT TO THE SAID PA RTY WHICH WAS NOT AVAILABLE AT THE GIVEN ADDRESS. THIS INFORMATION WAS CONFRONTED TO THE ASSESSEE. HOWEVER, THE ASSESSEE FAILED TO APPEAR BEFORE ASSESSING OFFICER AND EVEN THE ASSESSMENT WAS MADE EX - PARTE . HE FURTHER POINTED OUT THAT AT PRESENT IF YOU S EE THE STATUS OF SAID COMPANY, THEN IT IS STRUCK OFF FROM THE LIST OF COMPANIES BEFORE THE REGISTRAR OF COMPANIES. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS AGAINST THE ADDITION MADE ON ACCOUNT OF PURCHASES MADE FROM ALLEGED BOGUS PARTIES AS PER INFORMATION RECEIVED FROM ITA NO. 1997 /P U N/20 1 6 SHRI KEVAL KADU DEORE 7 THE MAHARASHTRA SALES TAX DEPARTMENT. THE ASSESSEE HAS CHALLENGED THE ORDER OF ASSESSING OFFICER ON THE GROUND THAT SINCE HE HAD FAILED TO ALLOW CROSS - EXAMINATION OF WI TNESSES OF THE REVENUE I.E. PARTY FROM WHOM PURCHASES WERE MADE, THEN ASSESSMENT ORDER NEEDS TO BE QUASHED. THE ASSESSEE HAS ALSO RAISED THE ISSUE OF NON - PROVIDING OF STATEMENT RECORDED OF THE SAID PERSON TO THE ASSESSEE AND HAS ALLEGED THAT THIS GOES TO THE ROOT OF THE ISSUE AND NO ADDITION CAN BE MADE IN THE HANDS OF ASSESSEE. FURTHER, THE ASSESSEE HAS ALSO CHALLENGED THE DISALLOWANCE OF PURCHASES MADE IN HIS HANDS. THE CIT(A) HAS ELABORATELY DISCUSSED THE ISSUE WHETHER THE PURCHASES MADE BY THE ASSESS EE WERE BOGUS OR MADE WITH HAWALA PARTIES. REFERENCE WAS MADE TO VARIOUS CASE LAWS BY THE CIT(A) AND SINCE THE ASSESSING OFFICER HAS NOT REJECTED THE SALES, THEN IT CANNOT BE THE CASE OF BOGUS PURCHASES AND ENTIRE PURCHASES COULD NOT BE TERMED AS BOGUS PU RCHASES. HOWEVER, SINCE THE ASSESSEE HAD FAILED TO PRODUCE THE PARTY, THEN THE CIT(A) HELD IT TO BE CASE OF INFLATED PURCHASES AND AT BEST FROM BOGUS PARTIES AND RESTRICTED DISALLOWANCE TO 25% OF PURCHASES. THE REVENUE IS NOT IN APPEAL AGAINST THE ORDER OF CIT(A). HOWEVER, THE ASSESSEE HAS CHALLENGED THE REDUCED DISALLOWANCE IN HIS HANDS. 10. THE FIRST GROUND OF APPEAL WHICH HAS BEEN RAISED IS NON - PROVIDING THE STATEMENT TO ASSESSEE AND NON - ALLOWANCE OF CROSS - EXAMINATION. UNDOUBTEDLY, IN VARIOUS CASES, WE HAVE HELD THAT IN CASE OF NON - PROVIDING OF STATEMENT TO THE ASSESSEE AND NON - ALLOWANCE OF CROSS - EXAMINATION TO THE ASSESSEE IS CRUCIAL AND HAD DELETED THE ADDITIONS MADE IN THE HANDS OF ASSESSEE. HOWEVER, WE NEED TO LOOK AT THE FACTS OF PRESENT CASE B EFORE RELYING ON THE SAID DECISIONS. AS POINTED OUT IN THE PARAS HEREINABOVE, THE CASE OF ASSESSEE WAS SELECTED ITA NO. 1997 /P U N/20 1 6 SHRI KEVAL KADU DEORE 8 UNDER SECTION 147/148 OF THE ACT ON 23.10.2013. THE ASSESSEE VIDE LETTER DATED 14.11.2013 SUBMITTED THAT ORIGINAL RETURN OF INCOME FILED BY HI M SHOULD BE TREATED AS RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT. THEREAFTER, THE ASSESSEE REQUESTED FOR REASONS RECORDED FOR REOPENING THE ASSESSMENT WHICH WERE FURNISHED TO THE ASSESSEE BY ASSESSING OFFICER VIDE LETTER DATED 28.02. 2014. NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED ON 28.03.2014 FIXING THE CASE ON 10.04.2014. THE ASSESSEE FILED LETTER DATED 04.04.2014 AND OBJECTED TO THE REASONS RECORDED FOR REOPENING THE ASSESSMENT. THUS, THE OBJECTIONS WERE DISPOSED OFF BY THE ASSESSING OFFICER AS PER LETTER DATED 09.04.2014. THE ASSESSEE BEFORE US HAS POINTED OUT THAT BESIDE S OBJECTING TO THE REASONS RECORDED FOR REOPENING THE ASSESSMENT HE HAD ALSO ASKED FOR COPY OF STATEMENT RECORDED AND HAD ALSO POINTED OUT THAT FAILURE TO CROSS - EXAMINATION WOULD VITIATE THE PROCEEDINGS. COPY OF SAID LETTER IS PLACED AT PAGES 1 TO 4 OF PAPER BOOK. THE ASSESSING OFFICER THEREAFTER, HAS ISSUED NOTICE UNDER SECTION 142(1) OF THE ACT ALONG WITH QUESTIONNAIRE ON 10.04.2014, FIXING THE CASE ON 21.04.2014, COPY OF SAID NOTICE IS PLACED AT PAGES 8 TO 11 OF PAPER BOOK FILED BY ASSESSEE. THE PERUSAL OF SAID NOTICE WOULD REFLECT BESIDES RAISING VARIOUS OTHER QUERIES, THE ASSESSING OFFICER HAD MADE THE FOLLOWING QUERIES: - 26. HOW DID YOU KNOW THI S PERSON? SINCE WHEN YOU ARE DEALING WITH HIM? CAN YOU PRODUCE THE PERSON, IF REQUIRED? 27. WHAT WAS THE MODUS OPERANDI OF YOUR TRANSACTION WITH HAWALA PARTY? HOW DID YOU PUT THE ORDER, FIX THE RATE, CONFIRM THE DELIVERY, PAY THE CONSIDERATION? IN ALL THE SE STEPS WITH WHOM YOU / YOUR EMPLOYEE PERSONALLY MET THE HAWALA PARTY/SUPPLIER. 28. HAVE YOU EVER VISITED OFFICE PREMISES, GODOWN/MANUFACTURING UNIT OF HAWALA PARTY? 29. HAVE YOU PAID SALES TAX ON DEFAULT OF THESE PARTIES. HAVE YOU TAKEN ANY RECOURSE T O OBTAIN YOUR MONEY BACK? 30. WHAT ARE THE CREDIT BALANCE OF THESE PARTIES IN YOUR BOOKS OF ACCOUNT ON 31/07/2011, 31/03/2012, 31/03/2013 & AS ON DATE. ITA NO. 1997 /P U N/20 1 6 SHRI KEVAL KADU DEORE 9 11. THE ASSESSING OFFICER STATES IN THE ASSESSMENT ORDER THAT VIDE LETTER DATED 21.04.2014, THE ASSES SEE REQUESTED FOR TIME WHICH WAS GRANTED AND THE HEARING WAS FIXED ON 25.04.2014. THERE WAS NO RESPONSE TO THE SAID NOTICE. IN ORDER TO VERIFY THE GENUINENESS OF PURCHASES MADE FROM THE SUPPLIER M/S. SUNICO TRADERS PVT. LTD., NOTICE UNDER SECTION 133(6) OF THE ACT WAS ISSUED TO THE SAID PARTY ON 26.08.2014. HOWEVER, THE SAID NOTICE WAS RETURNED BACK BY THE POSTAL AUTHORITIES WITH REMARK NOT KNOWN. THE ASSESSEE HAD NOT FURNISHED ANY COPIES OF OCTROI RECEIPTS, COPY OF ANY LORRY RECEIPTS FOR TRANSPORTATI ON OF MATERIAL PURCHASED, STOCK REGISTER SHOWING CONSUMPTION OF MATERIAL AND EVEN THE NOTICE ISSUED UNDER SECTION 133(6) OF THE ACT WAS RETURNED BACK. THE ASSESSING OFFICER THUS, HELD THE ASSESSEE NOT TO HAVE PROVED THE GENUINENESS OF PURCHASES. VIDE LET TER DATED 31.10.2014, THE ASSESSEE WAS SHOW CAUSED TO EXPLAIN WHY THE ASSESSMENT SHOULD NOT BE COMPLETED UNDER SECTION 144 OF THE ACT. COPY OF SAID NOTICE IS ALSO PLACED AT PAGE 12 OF PAPER BOOK. BECAUSE OF NON - COOPERATIVE ATTITUDE OF ASSESSEE, THE ASSES SING OFFICER WAS LEFT WITH NO OPTION BUT TO COMPLETE THE ASSESSMENT EX - PARTE THE ASSESSEE. SINCE THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF PURCHASES, THE ENTIRE PURCHASES WERE ADDED IN HIS HANDS, AGAINST WHICH THE CIT(A) HAS RESTRICTED ADDITION TO 25% OF PURCHASES. 12. THE CASE OF ASSESSEE BEFORE US IS OTHERWISE THAT IT HAD COOPERATED AND FURNISHED ALL THE INFORMATION. OUR ATTENTION WAS DRAWN TO THE CONFIRMATION FILED OF THE SAID PARTY, WHICH IS PLACED AT PAGES 14 AND 15 OF PAPER BOOK, ALONG WITH COPY OF VAT REGISTRATION OF SUPPLIER AT PAGE 16 AND VAT RETURN AT PAGE 17 OF PAPER BOOK. AFTER GOING THROUGH THE PAPER BOOK, IT TRANSPIRES THAT ALL THIS INFORMATION WAS FILED ALONG WITH LETTER DATED 20.06.2013 I.E. BEFORE START OF RE - ITA NO. 1997 /P U N/20 1 6 SHRI KEVAL KADU DEORE 10 ASSESSMENT PROCE EDINGS IN THE HANDS OF ASSESSEE, COPY OF ACCOUNT OF SAID PARTY IS NOT EVEN DATED AND NO PAN IS AVAILABLE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE STATES THAT THE ASSESSEE HAS FILED ALL THE INFORMATION AND EVEN THE PAYMENT TO THE SAID PARTY WAS MADE THROUGH BANKING CHANNEL AFTER A GAP OF TIME, HENCE THE PURCHASES SHOULD BE ACCEPTED AS GENUINE. THE SAID INFORMATION WAS FURNISHED BY THE ASSESSEE BUT IT WAS FURNISHED BEFORE RE - ASSESSMENT PROCEEDINGS WERE INITIATED AGAINST THE ASSESSEE. ANOTHER POINT TO BE KEPT IN MIND IS THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER IN ORDER TO VERIFY THE GENUINENESS OF PURCHASES HAD ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT, WHICH WAS RETURNED BACK BY POSTAL AUTHORITIES WITH REMAR K NOT KNOW. THE ASSESSEE WAS THUS, CONFRONTED WITH THE SAID INFORMATION AND EVEN OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO MAKE GOOD ITS CASE. WE HAVE ALREADY REFERRED TO VARIOUS QUERIES RAISED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PR OCEEDINGS VIDE LETTER DATED 10.04.2014. THE ASSESSEE HAS FAILED TO RESPOND TO THE SAME AND UNDER SUCH CIRCUMSTANCES, WE FIND NO MERIT IN THE PLEA OF ASSESSEE THAT IT HAD ASKED FOR THE COPY OF STATEMENT AND HAD ALSO ASKED FOR CROSS - EXAMINATION OF WITNESSES , WHICH WAS NOT ALLOWED BY ASSESSING OFFICER, HENCE ADDITION CANNOT BE SUSTAINED IN THE HANDS OF ASSESSEE. ON THE OTHER HAND, THE ASSESSING OFFICER IN THE PRESENT CASE HAS MADE ENQUIRIES, TR Y TO SUMMON THE SUPPLIER M/S. SUNICO TRADERS PVT. LTD. , ISSUED SH OW CAUSE NOTICE UNDER SECTION 133(6) OF THE ACT BUT THE SAME COULD NOT BE SERVED UPON THE SUPPLIER AND IT WAS RETURNED BY POSTAL AUTHORITIES. HERE, THE ONUS SHIFTS TO ASSESSEE, WHO HAS FAILED EVEN TO ACKNOWLEDGE VARIOUS NOTICES GIVEN BY ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND HAS FAILED TO EXPLAIN ITS CASE BEFORE THE ASSESSING OFFICER. IN SUCH CIRCUMSTANCES, MERE ITA NO. 1997 /P U N/20 1 6 SHRI KEVAL KADU DEORE 11 RELIANCE ON CONFIRMATION WHICH IS UNDATED, DOES NOT BEAR PAN NUMBER, CANNOT BE RELIED UPON. THE VAT REGISTRATION AND ACKNOWLEDGEMENT OF VAT RETURN DOES NOT PROVE THE CASE OF ASSESSEE SINCE THE SUPPLIER WAS REGISTERED UNDER THE VAT AND THAT IS WHY ENQUIRY WAS BY THE SALES TAX DEPARTMENT. WHERE THE ASSESSEE HAS FAILED TO DISCHARGE ONUS CAST UPON HIM, WE FIND NO MERIT IN T HE PLEA OF ASSESSEE. THE ASSESSEE HAS FAILED EVEN TO ESTABLISH TRAIL OF GOODS AND HAS NOT EVEN PRODUCED OCTROI RECEIPTS, TRANSPORTATION RECEIPTS OF GOODS PURCHASED FROM PARTY IN MUMBAI FOR SUPPLY TO THE ASSESSEES ADDRESS IN NASHIK. THE ASSESSEE HAS ALSO NOT FILED ANY QUANTITATIVE DETAILS OR STOCK REGISTER SHOWING CONSUMPTION OF MATERIAL PURCHASED AND BECAUSE OF NON - COOPERATIVE ATTITUDE OF ASSESSEE BEFORE THE ASSESSING OFFICER, THERE IS NO MERIT IN THE PLEA OF ASSESSEE THAT NO ADDITION IS WARRANTED IN THE HANDS OF ASSESSEE. ONCE THE TRAIL OF GOODS HAS NOT BEEN ESTABLISHED BY THE ASSESSEE, THEN ONUS UPON THE ASSESSEE HAS NOT BEEN DISCHARGED AND IN SUCH CIRCUMSTANCES, WE FIND NO MERIT IN THE PLEA OF ASSESSEE. WE HAVE ALREADY DECIDED SIMILAR ISSUE IN BUNCH OF APPEALS WITH LEAD ORDER IN THE CASE OF ANITA SANJAY AGRAWAL VS. ITO IN ITA NOS.2622 TO 2624/PUN/2016, RELATING TO ASSESSMENT YEARS 2009 - 10 TO 2011 - 12, ORDER DATED 28.03.2018, WHEREIN THE ASSESSEE HAD ESTABLISHED THE TRAIL OF GOODS BUT THE ASSESSING OFFICER HAD FAILED TO PROVIDE CROSS - EXAMINATION TO THE ASSESSEE AND THE ADDITION WAS DELETED IN THE HANDS OF ASSESSEE. HOWEVER, THE FACTS OF PRESENT CASE ARE AT VARIANCE, WHERE THE ASSESSEE HAS FAILED TO COOPERATE IN THE ASSESSMENT PROCEEDINGS AND HAS ALSO FAILED TO ESTABLISH THE TRAIL OF GOODS, IN THE ABSENCE OF IT, THERE I S NO MERIT IN THE PLEA OF ASSESSEE. HOWEVER, WE HAVE RESTRICTED THE ADDITION TO 10% OF HAWALA PURCHASES IN BUNCH OF APPEALS WITH LEAD ORDER IN M/S. CHHABI ELECTRICALS PVT. LTD. VS. DCIT IN ITA NO.795/PUN/2014, RELATING TO ASSESSMENT YEAR 2010 - 11, ITA NO. 1997 /P U N/20 1 6 SHRI KEVAL KADU DEORE 12 ORDER DA TED 28.04.2017 . FOLLOWING THE SAME PARITY OF REASONING, WE DIRECT THE ASSESSING OFFICER ACCORDINGLY. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, PARTLY ALLOWED. 1 3 . IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED O N THIS 15 TH DAY OF OCTOB ER , 201 8 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 15 TH OCTOB ER , 201 8 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - 1 , NASHIK ; 4. THE PR.CIT - 1 , N ASHIK ; 5. 6. , , / DR A , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE