IDCIT 23(3), MUMBAI V. SHARAD V SHAH, MUMBAI

ITA 6614/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8189 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2007-2008
• Appeal Filed On: 31-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH
• Keywords: Bogus purchase; Gift; Retrospective amendment; Additional evidence; Revised return
• Section: 69C; 143(3); 142(1); 194C; 263; 139

Judgement Text

, B BB B INCOME TAX APPELLATE TRIBUNAL,MUMBAI - E BENCH , IOU IOUIOU IOU , BEFORE S/SH. RAJENDRA, ACCOUNTANT MEMBER & PAWAN SINGH, JUDICIAL MEMBER /.ITA NO.6614/MUM/2014, /ASSESSMENT YEAR-2007-08 DCIT-23(3), ROOM NO. 402, 4 TH FLOOR, C-10 BLDG., PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E), MUMBAI-400051. VS. SHARAD V. SHAH (PROP. PARAS ENGG.CO.), 1301-A, KALINGA (NIRMAL NAGAR), LINK ROAD, MULUND(W), MUMBAI-400080 PAN: ALBPS0548P ( / APPELLANT) ( / RESPONDENT) / REVENUE BY : MS. BEENA SANTOSH (DR) ! ! / ASSESSEE BY : SHRI RAHUL HAKANI (AR) ' ! / DATE OF HEARING : 12 -01-2017 ! '( / DATE OF PRONOUNCEMENT : 15. 02-2017 , 1961 ' 254(1) #!$! ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER PAWAN SINGH, J.M. IOU IOUIOU IOU : 1. THIS APPEAL BY REVENUE UNDER SECTION 253 OF THE INC OME TAX ACT (ACT) IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (AP PEALS)-33, MUMBAI DATED 20.08.2014 FOR ASSESSMENT YEAR (AY) 2007-08. THE RE VENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THE FACT THAT THE AMENDMENT TO SECTION 40(A)(IA) INSERTED BY THE FINA NCE ACT 2010 HAS APPLICATION FOR AND FROM AY 2010-11 AND NOT EARLIER TO 2010-11. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE DISALLOWANCE OF RS.16,63,444/- MADE BY THE AO U/S 40(A)(IA) OF THE ACT WITHOUT APPRECIATING THE FACT THAT THE AMENDMENT BROUGHT IN BY THE FINANCE ACT 2010-11 HAS PROSPECTIVE EFFECT AND NOT RETROSPECTIVE EFFECT. 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE DISALLOWANCE MADE BY AO U/S 69(C) OF THE ACT OF RS. 2,04,85,861/- WITHOU T APPRECIATING THE FACT THAT THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS OF THE .PURCHASES BY NOT PRODUCING PURCHASE PARTIES FOR VERIFICATION. 4. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING THE DISALLOWANCE MADE BY AO U/S 69(C) OF THE ACT OF RS. 2,04,85,861/- WITHOU T APPRECIATING THE FACT THAT THE PARTIES HAVE BEEN DECLARED AS BOGUS HAWALA PROVIDER BY THE SALES TAX DEPARTMENT ON THE BASIS OF THE CORROBORATIVE EVIDENCE AVAILABLE W ITH THEM AND INFERENCE BASED ON THE FINDING OF SUCH AGENCIES CANNOT BE CONSTITUTED AS S USPICION. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS INDIVIDUAL AND PROPRIETOR OF M/S PARAS ENGINEERING COMPANY. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FABRICATION OF ENGINEERING PARTS. THE ASSESSEE FILED RETURN OF INC OME FOR RELEVANT AY ON 31.10.2007 DECLARING TOTAL INCOME OF RS. 54,58,981/-. SUBSEQUE NTLY, DURING THE ASSESSMENT 2 ITA NO. 6614/M/2014 SHARAD V. SHAH PROCEEDING, THE ASSESSEE FILED REVISED RETURN OF IN COME OF RS. 89,30,387/-. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 1 8.05.2009 ASSESSING THE TOTAL INCOME OF RS. 92,07,480/-. THE ASSESSMENT ORDER WAS SET-ASIDE IN REVISION PROCEEDINGS BY LD. CIT(A) U/S 263 OF THE ACT ON 15. 03.2012. IN THE ORDER U/S 263 DATED 15.03.2012, THE LD. CIT(A) PASSED THE FOLLOWI NG DIRECTION: (A) TO VERIFY THE SUNDRY 'CREDITORS. (B) THE UNSECURED LOANS HAVE BEEN, TAKEN BY THE ASS ESSEE FROM 47 PERSONS DURING THE YEAR. OUT OF THE ABOVE, CONFIRMATIONS LE TTERS OF 8 PERSONS ONLY HAS BEEN SUBMITTED BY THE ASSESSEE. THE CONFIRMATIONS L ETTERS OF THE BALANCE AMOUNT WAS NOT SUBMITTED. THE.AO DID NOT SEND INTIM ATION LETTERS TO THE AOS OF LENDERS ALSO. (C) AS PER THE ANNEXURE VII OF AUDIT REPORT FILED W ITH THE RETURN OF INCOME, THE ASSESSEE HAD TO PAY RS. 14,00,780/- TO M/S. MIC RATEK INTERNATIONAL READY AND RS. 75,408/- TO M/S METAL TUBE AND ROLLING MILL S AND DEDUCTED TAX U/S. 194C BUT THE SAME WAS NOT DEPOSITED IN GOVT. TREASU RY WITHIN THE TIME ALLOWED. HENCE, RS. 14,76,188/- SHOULD HAVE BEEN DISALLOWED U/S 40(A)(IA) OF THE I.T. ACT BUT THE SAME HAS NOT BEEN DISALLOWED. (D) THE ASSESSEE INTRODUCED CAPITAL OF RS. 11,00,00 0/- IN HIS PROPRIETARY CONCERN VIZ. PARAS ENGG. CO. THE SAME WAS STATED TO HAVE BEEN INTRODUCED OUT OF GIFT RECEIVED BY HIM. HOWEVER, THE NAMES OF THE DONORS, THEIR RELATIONSHIP WITH THE ASSESSEE WERE NOT ENQUIRED BY THE AO. THE ABOVE GIFT SHOULD HAVE BEEN DISALLOWED U/S. 56(1)(VI) OF THE I.T. ACT. (E) THE ASSESSEE SOLD 500 SHARES OF M/S. ORIENT CON T. CO. ON 31.03.2006 AND EARNED THE S.T. CAPITAL GAIN OF RS. 22,520/-. HOWEV ER, THE SAME HAS NOT BEEN INCLUDED IN THE INCOME OF A.Y. 2006-07. AS PER THE DIRECTION OF LD. CIT, THE ASSESSING OFFI CER (AO) ISSUED NOTICE TO THE ASSESSEE U/S 143(2) AND U/S 142(1) OF THE ACT FOR F RESH ASSESSMENT. WHILE MAKING FRESH ASSESSMENT, THE AO BESIDES OTHER ADDITION AND DISALLOWANCE, DISALLOWED A SUM OF RS. 16,63,444/- U/S 40(A)(IA) , DISALLOWED A SUM OF RS. 2,04,85,861/- U/S 69C OF THE ACT IN ASSESSMENT ORDER DATED 11.03.2013 PASSED UN DER SECTION U/S 143(3) R.W.S. 263 OF THE ACT. ON APPEAL BEFORE CIT(A) BOTH THE DISAL LOWANCE I.E. U/S 40(A)(IA) AND 69C WAS DELETED. THUS, AGGRIEVED BY THE ORDER OF CI T(AO) THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD LD. DR FOR REVENUE AND LD. AR FOR THE ASSESSEE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE GROUND NO. 1 & 2 RELATES TO DELETING THE DISALLOWANCE OF RS. 16,63,444/- U/S 40(A) (IA) OF THE ACT. THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF AO AND ARGUED THAT D ESPITE DEDUCTING TAX AT SOURCE ON THE PAYMENT MADE TO M/S MICROTEC INTERNATIONAL R EADY AND M/S METAL TUBE AND ROLLING MILLS, THE ASSESSEE NOT DEPOSITED THE SUM W ITHIN THE STATUTORY PERIOD IN THE 3 ITA NO. 6614/M/2014 SHARAD V. SHAH GOVERNMENT TREASURY AND THE SAME WAS RIGHTLY DISALL OWED BY AO. ON THE OTHER HAND, LD. AR OF THE ASSESSEE ARGUED THAT TDS HAS BEEN PAI D BEFORE THE DUE DATE OF FILING OF RETURN. LD. AR OF THE ASSESSEE RELIED UPON THE DECI SION OF HONBLE DELHI HIGH COURT IN CIT VS. ANSAL LAND MARK TOWNSHIP P. LTD. (2015) 377 ITR 635. 4. WE HAVE CONSIDERED THE CONTENTION OF THE PARTIES AN D GONE THROUGH THE ORDER OF AUTHORITIES BELOW. THE HONBLE DELHI HIGH COURT IN CIT VS ANSAL LAND MARK TOWNSHIP (SUPRA) HELD: THE SECOND PROVISO TO SECTION 40(A) (IA) WAS INSERTED BY THE FINANCE ACT 2012 WITH EFFECT FROM 1ST APRIL 2013. THE EFFECT OF THE SAID PROVISO IS TO INTRODUCE A LEGAL FICTION WHERE AN ASSESSEE FAILS TO DEDUCT TAX IN ACCORDANCE WITH THE PROVISIONS OF CHAPTER XVII B. WHERE SUCH ASSESSEE I S DEEMED NOT TO BE AN ASSESSEE IN DEFAULT IN TERMS OF THE FIRST PROVISO T O SUB-SECTION (1) OF SECTION 201 OF THE ACT, THEN, IN SUCH EVENT, IT SHALL BE DEEMED T HAT THE ASSESSEE HAS DEDUCTED AND PAID THE TAX ON SUCH SUM ON THE DATE OF FURNISH ING OF RETURN OF INCOME BY THE RESIDENT PAYEE REFERRED TO IN THE SAID PROVISO. TH E FIRST PROVISO TO SECTION 201 (1) OF THE ACT HAS BEEN INSERTED TO BENEFIT THE ASS ESSEE. IT ALSO STATES THAT WHERE A PERSON FAILS TO DEDUCT TAX AT SOURCE ON THE SUM PAI D TO A RESIDENT OR ON THE SUM CREDITED TO THE ACCOUNT OF A RESIDENT SUCH PERSON S HALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN RESPECT OF SUCH TAX IF SUCH RESIDENT HAS FURNISHED HIS RETURN OF INCOME UNDER SECTION 139 OF THE ACT. NO DOUBT, T HERE IS A MANDATORY REQUIREMENT UNDER SECTION 201 TO DEDUCT TAX AT SOUR CE UNDER CERTAIN CONTINGENCIES, BUT THE INTENTION OF THE LEGISLATURE IS NOT TO TREAT THE ASSESSEE AS A PERSON IN DEFAULT SUBJECT TO THE FULFILLMENT OF THE CONDITIONS AS STIPULATED IN THE FIRST PROVISO TO SECTION 201(1). THE INSERTION OF T HE SECOND PROVISO TO SECTION 40(A) (IA) ALSO REQUIRES TO BE VIEWED IN THE SAME M ANNER. THIS AGAIN IS A PROVISO INTENDED TO BENEFIT THE ASSESSEE. THE EFFECT OF THE LEGAL FICTION CREATED THEREBY IS TO TREAT THE ASSESSEE AS A PERSON NOT IN DEFAULT OF DE DUCTING TAX AT SOURCE UNDER CERTAIN CONTINGENCIES. WHAT IS COMMON TO BOTH THE PROVISOS TO SECTION 40 (A) (IA) AND SECTION 210 (1) OF THE ACT IS THAT THE AS LONG AS THE PAYEE/RESIDENT ( WHICH IN THIS CASE IS ALIP) HAS FILED ITS RETURN OF INCOME DISCLOSING THE PAYMENT R ECEIVED BY AND IN WHICH THE INCOME EARNED BY IT IS EMBEDDED AND HAS ALSO PAID T AX ON SUCH INCOME, THE ASSESSEE WOULD NOT BE TREATED AS A PERSON IN DEFAUL T. AS FAR AS THE PRESENT CASE IS CONCERNED, IT IS NOT DISPUTED BY THE REVENUE THAT T HE PAYEE HAS FILED RETURNS AND OFFERED THE SUM RECEIVED TO TAX. 5. WE MAY ALSO REFER THAT THE COORDINATE BENCH OF MUM BAI TRIBUNAL IN PIYUSH C MEHTA 52 SOT 27, BY FOLLOWING THE DECISION OF CALCUTTA HI GH COURT IN CIT VS VIRGIN CREATION IN ITA NO. 302 OF 2011 DATED 23.11.2011 HE LD THAT WHEN THE DEDUCTED TAX WAS PAID BEFORE THE DUE DATE OF RETURN NO DISALLOWA NCE IS WARRANTED. THE HONBLE APEX COURT IN R.B. JODHAMAL KUTHIALA 82 ITR 570 HEL D THAT THE PROVISION WHICH HAS THE REMEDY TO MAKE THE PROVISION WORKABLE, REQUIRE TO BE TREATED WITH RETROSPECTIVE 4 ITA NO. 6614/M/2014 SHARAD V. SHAH OPERATION SO THAT REASONABLE RESTRICTION CAN BE GIV EN TO THE SECTION AS WELL. THUS, WE MAY CONCLUDE THAT GROUND NO. 1&2 OF APPEAL RAISED B Y REVENUE IS SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF HONBLE DE LHI HIGH COURT IN ANSAL LAND MARK TOWNSHIP P. LTD. THE ASSESSEE HAS DEPOSITED T HE AMOUNT BEFORE DUE DATE OF FILING OF RETURN U/S 139(1) AND THEN IT WAS COVERED BY CLAUSE-A OF SECTION 40(A)(IA) OF THE ACT NO DISALLOWANCE WAS WARRANTED. THUS, RESPEC TFULLY FOLLOWING THE DECISION OF HONBLE DELHI HIGH COURT, WE DO NOT FIND ANY ILLEGA LITY OR INFIRMITY IN DELETING THE DISALLOWANCE U/S 40(A)(IA) BY LD. CIT(A). THUS, GRO UND NO. 1 & 2 OF THE APPEAL IS DISMISSED. 6. GROUND NO.3 & 4 RELATES TO DELETING THE DISALLOWANC E U/S 69C OF RS.2,04,85,681/-. THE LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF A O AND WOULD ARGUE THAT THE NAME OF PARTIES FROM WHOM THE ASSESSEE HAS PURCHASE D THE GOODS WERE INCLUDED IN THE LIST OF SUSPICIOUS/HAWALA DEALERS IN THE VAT/SA LES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA. THOSE PARTIES WERE NOT CARRYING OU T THE GENUINE BUSINESS OF PURCHASE AND SALE OF GOODS TO WORK MERELY ISSUING B ILLS WITHOUT ACTUAL SALE AND PURCHASE OF GOODS. THE REGISTRATION OF ALL DEALERS WAS CANCELLED BY THE SALE TAX DEPARTMENT. THE ASSESSEE DESPITE GIVING OPPORTUNITY FAILED TO PROVE THE GENUINENESS OF PURCHASES. THUS, AO MADE THE DISALLOWANCE OF PUR CHASES. THE LD. CIT(A) DELETED THE ENTIRE DISALLOWANCE. ON THE OTHER HAND, LD. AR OF THE ASSESSEE SUPPORTED THE ORDER OF LD. CIT(A) AND ARGUED THAT DURING THE APPELLATE PROCEEDING, THE LD. CIT(A) DELETED THE ADDITION ON THE BASIS OF REMAND REPORT SUBMITTE D BY AO. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF BOTH TH E PARTIES AND FURTHER GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE SEEN THAT DURING THE ASSESSMENT PROCEEDINGS REOPEN AFTER THE ORDER OF LD CIT, THE AO NOTICED THAT ASSESSEE HAS MADE PURCHASES FROM THE FOLLOWING PARTIES, WHOSE NAME WE RE INCLUDED IN THE LIST OF SUSPICIOUS IN THE WEBSITE OF SALES TAX DEPARTMENT O F MAHARASHTRA GOVERNMENT; 1. D M/S MANOJ TRADING COMPANY. 2. NEWSTAR METALS & TUBES PVT. LTD. 3. PRAYAN TRADING COMPANY 4. VITARAG TRADING COMPANY 5. SAMPARK STEELS. 6. SHUKAN STEEL CORPORATION 7. SUN ENTERPRISES 5 ITA NO. 6614/M/2014 SHARAD V. SHAH 8. M.R. CORPORATION 9. VINAY TRADING COMPANY 10. SAMARTH TRADING COMPANY 11. S.M. ENTERPRISES THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE PARTIES ALONG WITH THEIR BOOKS OF ACCOUNTS, PURCHASE BILLS, SENSELESS, BANK ACCOUNTS FOR THE RELEVANT FINANCIAL YEAR RELEVANT TO ASSESSMENT YEAR VIDE NOT ICE DATED 21.01. 2013. IN REPLY TO THE SAID NOTICE THE ASSESSEE CONTENDED THAT SOME OF THE SUPPLIER HAVE CLOSED DOWN THEIR BUSINESS AND ASK FOR FURTHER TIME TO PRODUCE THE PARTIES. THE ASSESSEE INSTEAD OF PRODUCING THE PARTIES FILED DETAILS OF THIS OF T HE PARTIES PAYMENTS MADE AWARE AND CONTENDED THAT THEY ARE NOT IN A POSITION TO PRODUC E THE PARTIES AFTER MORE THAN FIVE YEARS FROM THE DATE OF PURCHASE. THE AO MADE THE EN QUIRIES THROUGH WARD INSPECTOR, WHO REPORTED THAT NONE OF THE PARTIES ME NTIONED IN THE LIST ARE AVAILABLE ON THE ADDRESS MENTIONED IN THE BILLS. THE AO AFTER EXAMINING THE DETAILS OF EACH OF THE PARTIES AND THEIR OUTSTANDING AS ON 31 ST MARCH 2007 ADDED A SUM OF RS. 58,26,358/-AS WELL AS MADE THE ADDITION OF A ENTIRE AGGREGATE OF PURCHASES UNDER SECTION 69C OF THE ACT. DURING THE FIRST APPELLATE PROCEEDING SIMILAR ARGUMENTS WERE MADE BEFORE COMMISSIONER (APPEALS). THE ASSESS EE FURTHER FILED EVIDENCES IN THE FORM OF PAPER BOOK CONTAINING RECONCILIATION TH E STATEMENT, UTILIZATION / CONSUMPTION OF RAM MATERIAL PURCHASED FROM ALL 11 P ARTIES, RATIO OF CONSUMPTION AS COMPARED TO THE PRECEDING YEARS, COMPARISON OF G ROSS PROFIT RATIO OF THE CURRENT YEAR AND THE PRECEDING YEARS, BANK STATEMENTS SHOWI NG THE DETAILS OF PAYMENT MADE TO THE PARTIES, TRANSPORT BILLS, DELIVERY CHAL LANS, LABORATORY TESTS ATTRIBUTE, COMPARATIVE STATEMENT OF THREE YEARS SHOWING THE MA TERIAL CONSUMPTION DURING THE THREE YEARS. THE ADDITIONAL EVIDENCE OF THE ASSESS EE WAS FORWARDED TO THE ASSESSING OFFICER FOR ASCERTAINING THE VERACITY OF THE FACTS AND VERIFICATION OF THE EVIDENCES BY THE ASSESSING OFFICER. THE ASSESSING OFFICER SUBMIT TED HIS REPORT VIDE REPORT DATED 1 AUGUST 2014. AFTER CONSIDERING THE REMAND REPORT WITH REGARD TO THE DISALLOWANCE OF ALLEGED BOGUS PURCHASES OF RS.2,04,85,861/- A ND CONSIDERING THE OTHER MATERIAL AVAILABLE ON RECORD THE LD CIT(A) PASSED THE FOLLOW ING ORDER; 4.4 I HAVE CONSIDERED THE ASSESSMENT ORDER, SUBMISSION MADE BY THE APPELLANT, THE AOS REMAND REPORT AND THE COUNTER COMMENTS OF THE APPELLANT THEREON, ON APPRECIATION OF THE FACTS, IT IS NOT IN DISPUTE THA T APPELLANT HAD PURCHASED THE 6 ITA NO. 6614/M/2014 SHARAD V. SHAH MATERIAL AND ACTUALLY USED FOR THE PURPOSE OF MANUF ACTURING, THE FACT HAS NOT BEEN DENIED BY AO. IT IS ALSO FOUND FROM THE FACTS THAT GROSS PROFIT RATIO OF THE APPELLANT HAS INCREASED SINCE THE YEAR UNDER CONSIDERATION AS AGAINST THE PRECEDING PREVIOUS YEAR AND THEREFORE, PRIME FACIE IT IS NOT A CASE WH ERE APPELLANT HAS INTRODUCED PURCHASES TO REDUCE HIS INCOME. THE APPELLANT HAS A LSO PRODUCED VARIOUS DETAILS BEFORE THE AO IN REMAND PROCEEDING SHOWING MATERIAL USED IN MANUFACTURING. IT IS ALSO NOT IN DISPUTE THAT THE MATERIAL HAS BEEN RECE IVED AND CONSUMED BY ASSESSEE FOR HIS OWN MANUFACTURING. IT IS ALSO NOT IN DISPUT E THAT THE MATERIAL HAS BEEN RECEIVED AND CONSUMED BY ASSESSEE FOR HIS OWN MANUF ACTURING. THE ONLY REASON FOR DISALLOWANCE ACCORDING TO AO IS THAT THE PARTIES FR OM THE ASSESSEE HAD PURCHASED THE GOODS WERE APPEARING IN THE LIST OF SUSPICIOUS HAWALA DEALERS IN THE WEBSITE OF MVAT SITE. I AM UNABLE TO SEE TO THE AOS ACTION IN ASSESSMENT OF DISALLOWING THE ENTIRE CLAIM MERELY ON THE SUSPICIOUS BASED IN THE LIST OF DEALERS APPEARING IN THE MVAT SITE. IT IS WELL ESTABLISHED AND SETTLED LAW T HAT SUSPICIOUS DEALERS WOULD MAY IT BE CANNOT PARTAKE THE CHARACTER OF EVIDENCE. IT IS ALSO UNDISPUTED FACT THAT APPELLANT HAD MADE ALL PAYMENTS THROUGH ACCOUNT PAY EE CHEQUES OR RTGS AND HAD THERE BEEN ANY DOUBT ABOUT SUCH PAYMENTS, THE AO CO ULD HAVE CARRIED THE MATTER FURTHER TO FIND OUT FROM THE BANKERS ABOUT THE GENU INENESS OF THE TRANSACTION, WHICH THE AO HAS NOT DONE. VERY RECENTLY THE HONORABLE IT AT MUMBAI IN CASE OF RAJEEV KALAHATHI ( ITA NO. 6727/ MUM/2012 VIDE ORDER DATED 23 AUGUST 2014 HAS HELD ON A SIMILAR SET OF FACTS THAT WENT THE TRANSPORTATION OF GOODS ARE NOT IN DOUBT OR THE CONJUNCTION OF METAL IS NOT IN DOUBT ADDITION CANNO T BE MADE MERELY ON THE BASIS OF THE SUPPLIER ONE HAWALA DEALERS. IN THE INSTANT CAS E ASSESSEE HAS SHOWN PRODUCT WISE CONSUMPTION OF RAW MATERIAL INDICATING THE REC EIPT AND CONSUMPTION OF MATERIAL. I DO NOT FIND ANY REASON TO SUSTAIN THE A DDITION MADE BY THE AO. THEREFORE, CONSIDERING THE ABOVE FACTS AND MORE SO THE REMAND REPORT OF THE AO ADDITION MADE BY THE AO IS DELETED. THIS GROUND IS ALLOWED. 8. WE HAVE SEEN THAT THE LD CIT(A) ON FILING ADDITIONA L EVIDENCE BEFORE HIM, FORWARDED THE EVIDENCE TO AO FOR HIS REPORT. THE AO FURNISHED HIS REPORT AND AFTER CONSIDERING THE REMAND REPORT, EXAMINED THE GROSS P ROFIT FOR PREVIOUS YEARS AND FOUND THAT THE GROSS PROFIT OF ASSESSEE WAS INCREAS ED IN THE YEAR UNDER CONSIDERATION. WE HAVE FURTHER NOTICED THAT THE LD DR COULD NOT BRING ANY MATERIAL IN OUR NOTICE OR CONVINCE US, WHICH MAY INFLUENCE U S TO DIFFER WITH THE FINDING OF THE LD CIT (A). THUS, WE DO NOT FIND ANY MERIT IN T HE GROUND NO.3 &4 OF APPEAL RAISED BY REVENUE. IN THE RESULT, APPEAL FILED BY REVENUE IS DISMISSED. JKTLO UKK . ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH FEBRUARY,2017. + ! , - 15 QJ ( , 201 7 ! 12 3 SD/- SD/- ( / RAJENDRA ( IOU IOUIOU IOU / PAWAN SINGH)) ( / ACCOUNTANT MEMBER # ( / JUDICIAL MEMBER 7 ITA NO. 6614/M/2014 SHARAD V. SHAH 2 /MUMBAI, - /DATE: 15.02.2017 SK ' )!*+ ,+! / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ 45 ( 6' , 4. THE CONCERNED CIT / 45 6' 5. DR E BENCH, ITAT, MUMBAI / 781 '95 B BB B , . . . 2 6. GUARD FILE/ 1 2 7' ' //TRUE COPY// + / BY ORDER, / DY./ASST. REGISTRAR ( 95 , 2 /ITAT, MUMBAI