DCIT Vs Ramelex Private Ltd. (ITAT Pune)
The Income Tax Appellate Tribunal (ITAT), Pune Bench, in the case of DCIT Vs. Ramelex Private Ltd., dismissed the Revenue’s appeal, upholding two key decisions made by the Commissioner of Income Tax (Appeals) [CIT(A)]. The rulings concerned the factual verification of Hawala purchases and the legal restriction of the disallowance to a profit element, rather than the entire purchase amount, in cases involving bogus purchases supported by VAT data.
Verification of Hawala Purchase Figures
The first issue concerned a significant discrepancy in the reported amount of Hawala purchases from a supplier named M/s. Entech Enterprises. The Assessing Officer (AO) recorded the purchase figure as ₹1,16,99,702. However, the assessee contended that this was a typographical error and the correct amount was only ₹11,63,175. The difference amounted to over ₹1.04 crore.
The Revenue argued that the CIT(A) accepted the reduced figure without proper verification from the AO. The assessee’s Authorized Representative (AR) submitted that the mistake was brought to the AO’s notice during assessment proceedings, but documentation could not be furnished then due to pending Sales Tax appeals. Before the CIT(A), the assessee provided a Cost Accountant’s certificate confirming the correct figure and a letter to the Assistant Commissioner of Sales Tax.
