Case Law Details
Case Name : Shri Rajeev G. Kalathil Vs DCIT (ITAT Mumbai)
Related Assessment Year :
Courts :
All ITAT ITAT Mumbai
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CA Sandeep Kanoi
ITAT Mumbai has in the case of Shri Rajeev G. Kalathil Vs. DCIT held that Purchases can not be termed as bogus by the AO merely because the supplier was listed as a hawala dealer by the Vat authorities.
First ground of appeal is about deleting an addition of Rs.13,69,417/- on account of non-genuine purchases.During the course of assessment proceedings,notices u/s. 133(6)of the Act were sent to some of the sundry creditors on random basis.Howev
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Author Bio
Dear; I agree with above written it seems very easy to fool any business man as the tax evaders know nothing is going to happen the no action nothing just give one simple affidavit &then the purchaser will have to suffer very great system I request u to new government to look into this matter as income nt purchaser have to suffer a lot & then they will loose faith in government. Thank.
Similar Type of cases in Pune ITO has been there only to prove Movement of the goods and give proofs of such documents or to produce the concern dealers but such dealers are either closed the business due to inability of payment of VAT or the hashments of deptt. The can give documents and help department some times but problems arises to dealers who are innocent and doing business regularly along with 10-15 % irregular business mans Vat Authorities avoid to collect from HAWALA dealers and issue notices and disallow setoffs ans make payments of VAT or Go in appeal instead of following them. The laws are agianst the humanity and they can used to harash regular businessmans. They send list of such dealers and their suppliers as Hawala But such hawala dealers were unknown to the concern purchasers at the time of transactions and they have cllected VAT from regular Bills. The Vat authorities said you pay as you had taken the set off. It will become wrong and double taxation in some cases it is not a margin of businesman also.
It is now being heared that after sales tax department income tax authorities are going to harres the innocent business men. Any body now about it please post a reply.
Very true many had sleepless night, mere fact this is terror or can be called as TAX TERRORISM and the common man is killed not by terrorrist bullet but by Government tax bullet
It Is ridiculous on part of Govt Machinery , Honest tax payer are being harassed unwanted. All profession forum is strongly object such,harsh & unconstitutional provisions .
Mahendra Doshi
In Mumbai and Maharashtra, Sales Tax Department has found that around 2000 suspicious suppliers have sold goods and issued sales Invoice without paying taxes. Purchasers, on the basis of said sales Invoices, claimed set off of taxes as legitimately permitted by law. But since, seller had not paid taxes, Sales tax department, instead of being harsh and coercive with sellers who was guilty and had made mockery of system fooling department, invoked section 48(5) of Mvat act and started to recover said evaded taxes from purchaser of goods. This has become burning issue and trading community is being harassed in such a way.
All these suppliers/sellers held valid registration numbers at the time of transactions. But department cancelled their 4-5 years old number with retrospective effects.
Department had a long sleep of so many years and woken up after computers (Electronic system) found an abnormal mismatch in tax payments v/s set off claimed.
Department contacted those sellers and took (forced them) their statement in writing that they had issued fake invoices without delivery of goods. Such statement saved those defaulting suppliers from paying huge tax liability and helped department to catch genuine purchasers in view of section 48(5). See smartness of Department that after taking (desired) statement, those sellers are free and genuine existing purchasers are being harassed with coercive recovery action with penalty and interest.
Further with above ongoing episode which caught eye of and was wrongly interpreted in media also, Income tax department sprang into action seeing opportunity to do something to fill their coffers to meet target. They had got an easy pray in above episode without doing anything. They got easily available list of those beneficiary buyers from sales tax department and started sending scrutiny notices opening old cases of such buyers. The highest income tax authority gave standing instructions to officers to open cases and make 100% additions of such purchases and tax them with interest and 100% penalty without considering any facts. It is ridiculous that department believes statements of such sellers who fooled, cheated and made mockery of system but does not rely on valid documents and evidences. Department believes that seller did not deliver goods and only issued fake sales invoices but at the same time accepts subsequent sales of goods by purchasers. It tantamount to say that goods were manufactured out of said Fake Bills issued by seller and further sold by purchaser. Even a layman will understand the intention behind it, is to show up inflated income tax arrears and at the same time to show that they are also doing their part of work. It is a pity that law makers go to the extent of making any law giving retrospective effects. For 5% or 12.5% evasion of taxes by said unscrupulous sellers, Existing purchasers are being harassed for recovery of 100 to 120% (Including interest and penalty) by sales and income tax department.
Business community humbly request Platform like Tax Guru to raise this issue with the new government and highlight it as the issue has shaken the confidence of business community. Highhandedness by tax officers making retrospective laws and punishing each and every purchaser without considering facts of the case is uncalled for.
The ITAT Mumbai order in the matter is welcome and highly appreciable and will extend much needed relief to Victimized assesses. Only ITAT and Higher courts can teach them a lesson but need of the hour is that even Assessing officers must be well educated of law and there should rest accountability on them.