Deputy Commissioner of Income-tax, V. M/s. Shiva Global Agro Industries Ltd., Nanded

ITA 85/PUN/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9197 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-07-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 19-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK AGGARWAL
• Keywords: Bogus purchase; Rejection of books of accounts
• Section: 143(3); 133(6); 131; 2

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.85/PUN/2015 / ASSESSMENT YEAR : 2010-11 DY. COMMISSIONER OF INCOME TAX , NANDED CIRCLE, NANDED. . / APPELLANT V/S M/S. SHIVA GLOBAL AGRO INDUSTRIES LIMITED, NEAR S.B.I., NEW MONDHA, NANDED. PAN : AAECS0059A. . / RESPONDENT ASSESSEE BY : SHRI ABHAY AVCHAT. REVENUE BY : SHRI VIVEK AGGARWAL. / ORDER PER ANIL CHATURVEDI, AM : THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) AURANGABA D DATED 13.11.2014 FOR THE ASSESSMENT YEAR 2010-11. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER :- 2.1 ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING IN FERTILIZERS. ASSESS EE FILED ITS RETURN OF INCOME FOR A.Y. ON 2010-11 ON 16.09.2011 DECLARING TOTAL INCOME OF RS.2,36,70,060/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAM ED / DATE OF HEARING : 10.07.2017 / DATE OF PRONOUNCEMENT: 14.07.2017 2 U/S 143(3) OF THE ACT VIDE ORDER DT.20.03.2013 AND THE T OTAL INCOME WAS DETERMINED AT RS.3,53,23,027/-. AGGRIEVED BY T HE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A) WHO VIDE ORDER DT.13.11.2014 (IN APPEAL NO.ABD/CIT(A)/244/2013 - 14) ALLOWED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A), AURANGABAD HAS ERRED IN DELETING THE ADDITI ON OF RS.1,11,95,157/- MADE ON ACCOUNT OF BOGUS PURCHASES . 2. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A), AURANGABAD HAS ERRED IN HOLDING THAT THE PU RCHASES SHOWN BY THE ASSESSEE ARE GENUINE PURCHASES EVEN TH OUGH IT IS A FACT THAT THE SAME WERE PROVED AS HAWALA PU RCHASES BY THE SALES TAX DEPARTMENT. 3. THE APPELLANT PRAYS LEAVE TO ADDUCE SUCH FURTHER EVIDENCE TO SUBSTANTIATE ITS CASE AS THE OCCASION M AY DEMAND. 3. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETHER. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, INFORMATION WITH REGARD TO HAWALA TRANSACTIONS WERE RECEIV ED FROM SALES-TAX DEPARTMENT WHEREIN THE AO WAS INFORMED TH AT ASSESSEE HAD INDULGED IN HAWALA TRANSACTIONS OF RS.1,16,42,963/- AND HAD MADE VAT PAYMENT OF RS.4,47,806/- AND THE NET HAWALA TRANSACTION WAS OF RS.1,11,95,157/-. THE ASSESSEE WAS ASKED TO EXPLAIN THE TRANSACTIONS AND SHOW CAUSE AS TO WHY THE AMOUNT NOT BE ADDED AS INCOME OF THE ASSESSEE. ASSESSEE INTER-ALIA SUBMITTED THAT THE ACID WHICH IS USED AS RAW-MATERIAL FOR THE MANUFACTURING OF FERTILIZER HAS INDEED BEEN RECEIVED BY IT AN D 3 THE ASSESSEE WAS HAVING DELIVERY CHALLANS, COPIES OF INVOIC ES RECEIVED FROM THE TRANSPORTERS, COPIES OF GOODS RECEIPT N OTES REGISTER AND STOCK REGISTER TO SHOW THAT THE RAW MAT ERIAL HAS GONE INTO THE PROCESS OF MANUFACTURING AND THE GOODS HA VE INTER-ALIA BEEN MANUFACTURED AND THE FINAL SALE HAS BEEN EFFECTED. IT WAS ALSO SUBMITTED THAT ALL THE PAYMENTS FOR SALE OF GOODS HAS BEEN RECEIVED BY ACCOUNT PAYEE CHEQUES. TH E SUBMISSION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE AO. HE TREATED THE TRANSACTION TO BE SHAM TRANSACTION AND MADE ADDITION OF RS.1,11,95,157/-. AGGRIEVED BY THE ORDER O F AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO DELE TED THE ADDITION BY HOLDING AS UNDER : 7. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE A ND RIVAL CONTENTIONS. IN RESPECT OF THE ISSUE OF ALLEGED NO N-GENUINE PURCHASES, IT HAS BEEN NOTICED THAT IN THE CASES OF NANDED RANGE ISSUE BASED AUDIT (IBA) OF THE BOOKS OF ACCOU NT AND RECORD OF VARIOUS BUSINESS CONCERNS HAS BEEN CARRIE D OUT BY THE SALES TAX DEPARTMENT AND THE SAID DEPARTMENT HAS NO TICED THAT THE SELLER OF THE GOODS HAS NOT PAID VAT WHICH HAS BEEN CHARGED IN THE INVOICES ISSUED TO THE VARIOUS CONCE RNS INCLUDING THE APPELLANT. THE APPELLANT AND VARIOUS OTHER ASS ESSEES OF NANDED RANGE HAVE CLAIMED SET-OFF OF THE SAID VAT C HARGED BY THE SUPPLIERS WHILE ARRIVING AT VAT LIABILITY. THE SALES TAX DEPARTMENT HAS, THEREFORE, ISSUED THE NOTICE IN FOR M NO.302 TO THE VARIOUS ASSESSEES. THERE IS PROVISION IN MVAG ACT THAT IN CASE THE SUPPLIER FAILS TO PAY VAT COLLECTED FROM T HE PURCHASERS, THE PURCHASERS ARE NOT ELIGIBLE TO CLAIM SET-OFF OF THE SAME AND THE SET-OFF CLAIMED IS NOT ALLOWABLE AND THE SAID M VAT NOT PAID BY THE SUPPLIER IS TO BE DISALLOWED AND THE SET-OFF CLAIM IS TO BE RECOVERED FROM THE PURCHASER. THE ABOVE FACTS HAVE BEEN REVEALED FROM ISSUE BASED AUDIT CARRIED OUT BY THE SALES TAX DEPARTMENT AND HENCE THE NOTICES FOR RECOVERY OF MV AT NOT PAID BY THE SUPPLIER HAVE BEEN ISSUED. THE ABOVE F ACTS NOWHERE ESTABLISHED THAT THE SAID PURCHASES MADE BY THE APPELLANT WERE BOGUS OR NON-GENUINE PARTICULARLY IN VIEW OF THE ABOVE FACTS CLAIMED BY THE LD.AR OF THE APPELLANT, DURING THE APPELLATE PROCEEDINGS WHICH HAVE BEEN MENTIONED IN THE EARLIER PARA-6 OF THIS APPELLATE ORDER. IT HAS ALSO BEEN NOTICED THAT ON THE SIMILAR FACTS, HON'BLE ITAT, JODHPUR BENCH IN THE CASE OF ITO VS. PERMANAND (200 7) 107 TTJ 395 (JD) HAS LAID DOWN THAT THE A.O. COULD NOT MAKE ADDITION IN THE HANDS OF THE ASSESSEE MERELY ON THE BASIS OF 4 OBSERVATION MADE BY SALES TAX DEPARTMENT THAT THE P URCHASES MADE BY THE ASSESSEE FROM CERTAIN PARTIES WERE BOGU S WITHOUT CONDUCTING INDEPENDENT ENQUIRIES. IN THE RECENT DECISION, HON'BLE MUMBAI TRIBUNAL IN THE CASE OF DCIT-25(3)(308), MUMBAI VS. RAJEEV G.KALATHI, MUMBA I IN ITA NOS.67, 27/MUM/2012 (A.Y. 2009-10) VIDE ORDER DATED 20/08/2014 HAS LAID DOWN IN PARA-2.4 OF THE APPELLA TE ORDER THAT THE A.O. CANNOT MAKE ADDITION ONLY FOR THE REAS ON THAT THE SUPPLIER WAS DECLARED A HAWALA DEALER BY VAT DEPART MENT; THE A.O. HAS TO ESTABLISH BY MAKING NECESSARY ENQUIRIES THAT THE PAYMENTS MADE TO THE SUPPLIERS THROUGH BANKING CHAN NEL HAVE BEEN IMMEDIATELY WITHDRAWN IN CASH BY THEM. IN THE SAID CASE AS WELL AS IN THE CASE OF THE APPELLANT THE A.O. HA S NOT BROUGHT ON RECORD ANY SUCH EVIDENCE. IN THE CASE UNDER APPEAL, THE APPELLANT HAS MAINTAI NED ALL THE RELEVANT RECORD ABOUT THE IMPUGNED PURCHASES SUCH A S DELIVERY CHALLANS, GOODS RECEIVED NOTES AND REGISTER, DAY-TO -DAY STOCK RECORD, INVOICES AND ALL THE PAYMENTS TO SUPPLIERS HAVE BEEN MADE BY ACCOUNT PAYEE BANK CHEQUES. THE APPELLANT HAS ALSO POINTED OUT THAT THE A.O. HAS NOT FOUND ANY DISCREP ANCY IN THE BOOKS OF ACCOUNT AND RECORD MAINTAINED AND HAS ALSO NOT REJECTED THE BOOK RESULTS. THE APPELLANT HAS ALSO POINTED OUT THAT THE SSP FERTILIZERS PRODUCED AND SOLD IS SUBSI DIZED PRODUCT AND THE ACTIVITY OF PRODUCTION, QUANTITY AND QUALIT Y OF RAW MATERIAL AND FINISHED GOODS ETC. IS UNDER STRICT CO NTROL AND SUPERVISION OF THE GOVERNMENT AGENCIES. THE APPELL ANT HAS ALSO POINTED OUT THAT WITHOUT USING THE IMPUGNED RA W MATERIAL AND THE HDPE BAGS, THE FERTILIZER COULD NOT HAVE BE EN PRODUCED, PACKED AND SOLD. THE ABOVE CONTENTIONS OF THE APPE LLANT ARE FOUND TO BE REASONABLE, CORRECT AND ACCEPTABLE. THE HON'BLE BOMBAY HIGH COURT HAS OBSERVED IN THE C ASE NIKUNJ EXIMP ENTERPRISES PVT.LTD. (2012) 216 TAXMAN 171 ORDER DATED 17/12/2012 AS UNDER THE ASSESSEE HAD FILED LETTERS OF CONFIRMATION OF SUPPLIERS, COPIES OF BANK STATEMENT SHOWING ENTRIES OF PAYMENT THROUGH ACCOUNT PAYEE CHEQUES TO THE SUPPLIERS, COPIES OF INVOICES FOR PURCHASES AND STO CK RCONCILIATION STATEMENT. THESE STATEMENTS GAVE COM PLETE DETAILS WITH REGARD TO OPENING STOCK, PURCHASES, SA LES AND CLOSING STOCK AND NO FAULT WITH REGARD TO IT WA S FOUND AND SALES MADE ARE TO THE GOVERNMENT DEPARTMENT. BESIDES THE BOOKS OF ACCOUNTS OF THE RESPONDENT ASSESSEE HAVE NOT BEEN REJECTED. DISALLOWANCE ON THE ABOVE BASIS WAS NOT JUSTIFIED. THE HON'BLE JURISDICTIONAL HIGH COURT HAS HELD IN C ONCLUDING PARA AS UNDER IN OUR VIEW, MERELY BECAUSE THE SUPPLIERS HAVE NOT APPEARED BEFORE THE ASSESSING OFFICER OR THE CIT(A) , ONE CANNOT CONCLUDE THAT THE PURCHASES WERE NOT MADE BY THE RESPONDENT ASSESSEE. THE ASSESSING OFFICER AS WELL AS CIT(A) HAVE DISALLOWED THE DEDUCTION OF RS.1.33 CRORES ON ACCOUNT OF PURCHASES MERELY ON THE BASIS OF SUSPICION BECAUSE THE SELLERS AND THE CANVASSING AG ENTS 5 HAVE NOT BEEN PRODUCED BEFORE THEM. WE FIND THAT T HE ORDER OF THE TRIBUNAL IS WELL A REASONED ORDER TAKI NG INTO ACCOUNT ALL THE FACTS BEFORE CONCLUDING THAT THE PURCHASES OF RS.1.33 CRORES WAS NOT BOGUS. NO FAUL T CAN BE FOUND WITH THE ORDER DATED 30.04.2010 OF THE TRIBUNAL. IN VIEW OF THE ABOVE FACTS AND DISCUSSION AND THE R ATIO LAID DOWN BY THE ABOVE REFERRED DECISIONS, I AM OF THE CO NSIDERED VIEW THAT THE A.O. IS NOT JUSTIFIED IN MAKING ADDITI ON OF RS.1,11,95,157/- ONLY ON THE BASIS OF THE INFORMATI ON RECEIVED FROM SALES TAX DEPARTMENT FOR THE REASON THAT VAT H AS NOT BEEN PAID BY THE SUPPLIERS AND WITHOUT BRINGING ON RECORD ANY EVIDENCE SHOWING THAT THE IMPUGNED PURCHASES WERE B OGUS. THE ADDITION OF RS.1,11,95,157/- IS DELETED. THE A .O. IS DIRECTED ACCORDINGLY. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPE AL BEFORE US. 5. BEFORE US, LD.D.R. SUPPORTED THE ORDER OF AO. LD.D.R. FURTHER SUBMITTED THAT IF AO HAD FAILED TO MAKE NECESSARY ENQUIRIES, LD.CIT(A) COULD HAVE MADE THE NECESSARY ENQUIRIES AT HIS END BECAUSE HIS POWERS ARE CO-TERMINUS WITH THAT OF AO AND FOR THIS PROPOSITION, HE RELIED ON THE DECISION OF DELHI HI GH COURT IN THE CASE OF CIT VS. JANSAMPARK ADVERTISING AND MARKETING P. LTD. REPORTED IN (2015) 375 ITR 373 (DEL). HE THEREFORE SUBMITTED THAT THE MATTER MAY BE SENT BACK TO THE AO FOR VERIFICATION. LD.A.R. ON THE OTHER HAND, REITERATED TH E SUBMISSIONS MADE BEFORE AO AND LD.CIT(A) AND SUPPORTED TH E ORDER OF LD.CIT(A). HE FURTHER SUBMITTED THAT THE ISSUE IS ALSO COVERED IN ASSESSEES FAVOUR BY VARIOUS DECISIONS OF TRIBU NAL INCLUDING THE DECISION IN THE CASE OF CHHABI ELECTRICALS PVT. LIMITED VS. DCIT DT.28.04.2017. HE ALSO PLACED ON RECORD TH E COPY OF THE AFORESAID ORDER. HE THUS SUPPORTED THE O RDER OF LD.CIT(A). WITH RESPECT TO LD.D.R.S RELIANCE ON THE DECISION OF 6 HONBLE DELHI HIGH COURT IN THE CASE OF JANSAMPARK ADVERTISING (SUPRA) HE SUBMITTED THAT THE FACTS IN THAT CA SE WERE DIFFERENT AND THEREFORE THE RATIO OF THAT DECISION IS NOT APPLICABLE TO THE PRESENT CASE. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WIT H RESPECT TO MAKING OF ADDITION OF RS.1,11,95,157/- TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF HAWALA PURCHASE TRANSACTIONS. WE FIND THAT LD.CIT(A) WHILE DECIDING THE ISSUE IN FAVOUR OF THE ASSESSEE HAS NOTED THAT ASSESSEE HAS MAINTAINED ALL THE RELEVANT RECORDS ABOUT IMPUGNED PURCHA SES SUCH AS DELIVERY CHALLANS, GOODS RECEIVED NOTES AND REGIST ER, DAY-TO-DAY STOCK RECORD, INVOICES AND ALL THE PAYMENTS T O SUPPLIERS HAD BEEN MADE BY A/C PAYEE CHEQUES. HE HAS ALSO NOTED THAT AO HAS NOT FOUND ANY DISCREPANCY IN THE BOO KS OF ACCOUNTS AND RECORDS MAINTAINED BY THE ASSESSEE AND NOT REJECTED THE BOOKS OF ACCOUNTS. HE HAS FURTHER NOTED THAT THE PRODUCTION OF SSP FERTILIZERS ARE UNDER STRICT CONTROL AN D SUPERVISION OF GOVERNMENT AGENCIES AND THERE IS NO ADVER SE FINDING BY THE GOVERNMENT AGENCIES. THE AFORESAID FINDING OF LD.CIT(A) HAS NOT BEEN CONTROVERTED BY REVENUE. WE FURT HER FIND THAT THE CO-ORDINATE BENCH OF THE TRIBUNAL ON IDENT ICAL ISSUE IN THE CASE OF CHHABI ELECTRICALS PVT. LTD (SUPRA) HAS NOTED AS UNDER : 40. IN VIEW OF THE ABOVE SAID RATIOS, THE PRESENT ISSUE OF BOGUS PURCHASES IS TO BE DECIDED ON THE BASIS OF FA CTS OF EACH CASE. THE FIRST ASPECT IS THE INFORMATION RECEIVED BY THE ASSESSING OFFICER FROM THE SALES TAX DEPARTMENT IN RESPECT OF 7 ALLEGED HAWALA DEALERS. IN MANY CASES, THE ASSESSI NG OFFICER HAS NOT EVEN RECEIVED THE COPY OF STATEMENT RECORDE D OR ANY OTHER EVIDENCE FROM THE SALES TAX DEPARTMENT, EXCEPT THE LIST OF HAWALA DEALERS AND ON THE BASIS OF THE SAID LIST, THE ASSE SSMENT PROCEEDINGS HAVE BEEN COMPLETED IN THE HANDS OF ASS ESSEE, WHO HAD MADE THE PURCHASES FROM THE SAID PARTIES. IN C ASE, NO SUCH EVIDENCE HAS BEEN RECEIVED BY THE ASSESSING OFFICER BEFORE MAKING ADDITION, THEN THERE IS NO WARRANT IN MAKING AFORESAID ADDITION IN THE HANDS OF ASSESSEE MERELY ON THE BAS IS OF SO CALLED LIST OF HAWALA DEALERS. THERE ARE OTHER CASES, WHE RE THE ASSESSING OFFICER HAD RECEIVED THE STATEMENT OF THE PERSONS WHO WERE HAWALA DEALERS AND WHO HAD ADMITTED TO HAVE JU ST ISSUED BILLS OF SALE WITHOUT DELIVERY OF GOODS. IN SUCH C IRCUMSTANCES, THERE IS EVIDENCE AGAINST THE RESPECTIVE ASSESSEE T HAT WHERE THE SELLER OF THE GOODS, HAS ADMITTED NOT TO HAVE ENTER ED INTO REAL TRANSACTION OF SALE OF GOODS. AGAINST SUCH NON-TRA NSACTION, THERE CAN BE NO DELIVERY OF GOODS, THEN IT IS CASE OF PAS SING OF BILLS OF SALE AND PURCHASES, AGAINST WHICH NO VAT HAS BEEN P AID. SUCH BOGUS PURCHASES ARE THEN TO BE ADDED IN THE HANDS O F ASSESSEE. WHERE THE ASSESSING OFFICER HAD CONFRONTED THE ASSE SSEE WITH THE INFORMATION RECEIVED, SUPPLIED COPIES OF STATEMENTS AND WHERE THE PERSONS HAVE NOT BEEN TRACED AND NO CONFIRMATION HA S BEEN FILED BY THE ASSESSEE IN THIS REGARD, THEN THE ADDITION I S TO BE MADE IN THE HANDS OF ASSESSEE ON ACCOUNT OF SUCH BOGUS PURC HASES. IN THE FACTS AND CIRCUMSTANCES OF SOME CASES, THE GOOD S HAVE BEEN TRANSFERRED BY SUCH HAWALA DEALERS TO THE RESPECTIV E PURCHASERS, AGAINST WHICH THE ASSESSEE HAS TO DISCHARGE ONUS OF ESTABLISHING THE TRAIL OF GOODS WHICH ARE TRANSFERRED AND FURTHE R SOLD BY THEM. WHERE THE ASSESSEE IS ABLE TO PRODUCE EVIDENCE OF P URCHASE OF GOODS BY WAY OF WEIGHMENT BRIDGE RECEIPTS, TRANSPOR TATION DOCUMENTS, PAYMENT OF OCTROI AND SUBSEQUENT SALE OF GOODS TO THE RESPECTIVE PARTIES AND / OR WHERE THE ASSESSEE HAS MAINTAINED COMPLETE QUANTITATIVE DETAILS OF PURCHASE AND SALE OF GOODS, THEN TOTAL BOGUS PURCHASES CANNOT BE ADDED IN THE HANDS OF ASSESSEE, BUT GP RATE OF 10% IS TO BE APPLIED ON BOGUS PURCHA SES. WHERE THE ASSESSEE DOES NOT ESTABLISH ITS CASE, THEN THE COMPLETE BOGUS PURCHASES ARE TO BE ADDED AS HAWALA PURCHASES. FUR THER, IN CASES, WHERE THE STATEMENTS ARE RECORDED AND COPIES OF WHICH HAVE BEEN SUPPLIED TO THE ASSESSEE AND ASSESSEE EST ABLISHED THE CASE OF RECEIPT OF GOODS AND ITS ONWARD TRANSMISSIO N BY WAY OF SALE BILLS, THEN THE FACTUM OF PURCHASES BY THE ASS ESSEE STANDS ESTABLISHED IN SUCH CIRCUMSTANCES. HOWEVER, THE BE NEFIT OF PURCHASES BEING MADE FROM GREY MARKET, NEEDS ESTIMA TION IN THE HANDS OF ASSESSEE. THE TRIBUNAL HAS ALREADY HELD T HAT THE ADDITION BE MADE BY ESTIMATING THE SAME @ 10% OF TH E ALLEGED HAWALA PURCHASES. ACCORDINGLY, IT IS SO HELD. IN VIEW THEREOF, THE ISSUES WHICH EMERGE ARE AS UNDER:- I. IN CASE NO INFORMATION IS RECEIVED BY THE ASSESSING OFFICER FROM THE SALE TAX DEPARTMENT AND NO COPY OF STATEME NT RECORDED OR ANY OTHER EVIDENCE IS RECEIVED FROM THE SALES TAX DEPARTMENT, THEN NO ADDITION IS TO BE MADE ON THE B ASIS OF NAME OF HAWALA DEALER IN THE LIST PREPARED BY THE S ALES TAX DEPARTMENT, WHERE THE ASSESSEE HAD ASKED FOR THE SA ID INFORMATION DURING ASSESSMENT PROCEEDINGS. II. WHERE THE ASSESSING OFFICER HAD RECEIVED THE STATEM ENTS OF PERSONS WHO HAD ADMITTED TO HAVE JUST ISSUED BILLS OF SALE WITHOUT ANY DELIVERY OF GOODS. IN VIEW OF SUCH EVI DENCE, 8 WHERE THE ASSESSEE HAD NOT ENTERED INTO REAL TRANSA CTION OF PURCHASE OF GOODS AND IN THE ABSENCE OF ANY DELIVER Y OF GOODS, THE SALES ARE BOGUS AND THE ENTIRE SALES ARE TO BE ADDED IN THE HANDS OF ASSESSEE. ADMITTEDLY, THE DE ALER HAD NOT EVEN PAID VAT AGAINST SUCH PASSING OF GOODS. III. THE CASE WHERE THE ASSESSING OFFICER HAD CONFRONTED THE INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT AND HAD SUPPLIED COPIES OF STATEMENTS RECORDED AND HAD ALSO ISSUED NOTICE UNDER SECTION 133(6) OF THE ACT, WHERE HAWAL A DEALER WAS NOT TRACEABLE AND IN THE ABSENCE OF THE ASSESSE E FAILING TO FILE ANY DOCUMENTARY EVIDENCE OF DELIVERY OF GOODS, ADDITION IS TO BE UPHELD IN THE HANDS OF ASSESSEE ON ACCOUNT OF SUCH BOGUS PURCHASES. IV. THE NEXT INSTANCE IS THE CASE OF GOODS WHICH HAVE B EEN ADMITTEDLY SOLD BY THE HAWALA DEALER AND HAS BEEN R ECEIVED BY THE ASSESSEE, WHO IN TURN HAD MAINTAINED QUANTIT ATIVE DETAILS AND ALSO EVIDENCE OF ITS MOVEMENT I.E. TRAN SPORTATION DETAILS AND QUALITY CONTROL DETAILS OF CONSUMPTION OF THE SAID MATERIAL OR EXACT DETAILS OF SALE OF THE SAME CONSI GNMENT THROUGH SAME TRANSPORTER DIRECTLY TO THE PARTY, THE N 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 AS SESSEE. THE TRIBUNAL IN M/S. CHETAN ENTERPRISES VS. ACIT (S UPRA) HAS ALREADY HELD THAT THE ADDITION BE MADE BY ESTIMATIN G THE SAME @ 10% OF THE ALLEGED HAWALA PURCHASES, OVER AN D ABOVE THE GP SHOWN BY THE RESPECTIVE ASSESSEE. V. ANOTHER SET OF CASES WHERE THE STATEMENTS RECORDED BY THE SALES TAX DEPARTMENT HAVE BEEN HANDED OVER TO THE A SSESSEE AND THE COPIES OF SAME HAVE BEEN SUPPLIED TO THE AS SESSEE, THEN WHERE THE ASSESSEE ESTABLISHED THE CASE OF REC EIPT OF GOODS AND ITS ONWARD TRANSMISSION, THEN THE FACTUM OF PURCHASES BY THE ASSESSEE STANDS ESTABLISHED IN SUC H CIRCUMSTANCES. HOWEVER, ESTIMATION IS TO BE MADE I N THE HANDS OF ASSESSEE BECAUSE OF PURCHASES FROM THE GRE Y MARKET AND FOLLOWING THE ABOVE SAID RATIO, ADDITION IS TO BE MADE BY ESTIMATING THE SAME @ 10% OF THE ALLEGED HAWALA PUR CHASES, OVER AND ABOVE THE NET PROFIT SHOWN BY THE ASSESSEE . 7. BEFORE US, LD.D.R. RELYING ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF JANSAMPARK ADVERTISING (SUPRA), HAS PRAYED THAT THE MATTER BE SENT BACK TO AO FOR VERIFICATION AS LD.CIT(A) ALSO DID NOT CARRY OUT ANY VERIFICATIO N OF FACTS AT HIS END. WE FIND THAT IN THE CASE OF JANSAMPAR K ADVERTISING (SUPRA) AO HAD ISSUED SUMMONS U/S 131 OF THE ACT 9 TO THE PARTIES FROM WHOM ASSESSEE HAD RECOVERED SHARE APPLICATION MONEY BUT NONE APPEARED AND THE SUMMONS WE RE ALSO RECEIVED BACK UNDELIVERED. FURTHER THE AO DIRECTED THE ASSESSEE TO PRODUCE THE PERSONS IN QUESTION BUT THE D IRECTIONS WERE NOT COMPLIED WITH BY ASSESSEE. IN SUCH A SITUATION, THE ADDITION WAS MADE BY AO. IN THE APPELLATE PROCEEDINGS, LD.CIT(A) RELYING ON THE DECISION CITED IN HIS ORDER ALLOWED T HE ASSESSEES CLAIM. LD.CIT(A) ALSO DID NOT CALL FOR ANY REMAND REPORT. HOWEVER, IN THE PRESENT CASE, THERE IS NO FINDIN G OF THE AO THAT HE ISSUED SUMMONS U/S 131 OF THE ACT AND DESP ITE DIRECTIONS OF AO, ASSESSEE DID NOT PRODUCE THE PARTIES. I N SUCH A SITUATION, WE ARE OF THE VIEW THAT THE FACTS ARE DISTINGUISHABLE AND THEREFORE THE RATIO OF DECISION RELIED UPON BY REVENU E IS NOT APPLICABLE. CONSIDERING THE FACTS OF THE PRESENT CASE AND IN THE LIGHT OF THE DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF CHHABI ELECTRICALS (SUPRA), WE ARE OF T HE VIEW THAT NO INTERFERENCE TO THE ORDER OF LD.CIT(A) IS CALLED FOR. WE THEREFORE DISMISS THE GROUNDS OF THE REVENUE. THUS THE GROUNDS OF REVENUE ARE DISM ISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED ON 14 TH DAY OF JULY, 2017. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 14 TH JULY, 2017. YAMINI 10 #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5. 6. THE CIT(A) AURANGABAD. THE CIT, AURANGABAD. '#$ %%&',) &', / DR, ITAT, B PUNE; $+,-/ GUARD FILE. / BY ORDER , // TRUE COPY / / //TRUE COPY// ./0%1&2 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE