Whether, for the purpose of making addition, the findings of Customs authorities would prevail over the sales tax assessment order?

Bhuwania Steel & Metal Pvt. Ltd. Vs ITO (ITAT Mumbai)- On investigation of the assessee’s purchases, it was noticed that the same were from Shri Shivkaran Goel who admitted before the Customs authorities as well as AO that he had not supplied any goods to the assessee, with which flanges liners with 55% tin could be manufactured. He accepted to have received commission @ 2% plus 4% sales-tax from the assessee in lieu of supplying the bogus bills. These facts indicate that the assessee had in fact arranged for the bogus bills from Shri Shivkaran Goel to the tune of Rs.3.48 crores so as to help Shri Vijaykumar R. Bhuwania in making false claim of duty draw back worth crores of rupees.

Thus, such amount of purchase cannot be allowed deduction. The mere fact that the sales-tax assessment in the case of assessee as well as Shri Shivkaran Goel had been made accepting the sales as such, do not bring any change to the correct factual position prevailing in the case. In fact, the Sales-tax Deptt. could have no grouse against the artificial sales reflected at a higher figure resulting into more revenue than rightly due. We, therefore, hold that the AO was justified in treating the entire purchases of Rs.3.45 lakhs from Shri Shivkaran Goel as bogus and thereafter allowing deduction of Rs.65.66 lakhs towards the purchase   of lead by the assessee from the open market. We, therefore, uphold the impugned order.

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “B”,MUMBAI

BEFORE SHRI R.S. SYAL (AM) & SMT. ASHA VIJAYARAGHAVAN (JM)

I.T.A. No. 6515/Mum/2008

(A.Y. 1989- 90)