CA Saurabh Chokhra
Brief of the case:
The ITAT Mumbai in the above cited case held that the surrounding circumstances and human probabilities attached to a transaction should be examined by considering the transactions as a whole. Therefore, AO cannot decide the geniuses only finding some unusual things but also bound to examine the things which are indicating that the claim of assessee may be genuine.
Facts of the case:
- The assessee is a partnership firm and is engaged in the business of trading and export of diamond and allied items. During the course of assessment proceedings, the AO made enquiries with regard to the purchases made by the assessee by issuing notices u/s 133(6) of the Act to certain parties.
- The AO disallowed the purchases made from one M/s Trichipuram Trading Pvt Ltd (TTPL) as no reply was received from the party in response to notices u/s 133(6) and the party also could not be traced on the address provided by the assessee.
- The AO suspected that the assessee should have fabricated the various documents furnished before him and accordingly he sent them for examination to the Central Forensic Science Laboratory (CFSL), Hyderabad. However, the report from CFSL was not received till the time of passing of the appellate order. Further , the AO received information from DGIT (Inv), Mumbai that the Sales tax department of Mumbai has provided list of persons who are providing hawala bills and the said list contained the name of TTPL. It was also noticed that the PAN number given by the TTPL was found to be invalid and further the said company has failed to file accounts with Registrar of Companies.
- Accordingly, the AO has doubted about the claim of purchases made from TTPL and accordingly held that the purchases were bogus and disallowed the same.
- CIT(A) also upheld the disallowance made by the AO by treating the transaction as made in nature of accommodation entries take place in secret.
- Aggrieved assessee is in appeal before ITAT Mumbai.
Contention of the Assessee:
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