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08-03-2019, Milan H. Sanghavi, Section 133(6), Tribunal Mumbai

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2 months 1 week ago #8771 by amit
Section - 133(6)
Order Date - 08-03-2019
Favouring - Assessee
Court - Tribunal Mumbai
Appellant - DCIT
Respondent - Milan H. Sanghavi (HUF)
Citation - 319Taxpundit220
Appeal No. - ITA No. 6830/Mum/17
Asstt. Year - 2011-12



The Revenue has filed all these appeals, challenging the orders passed by the Ld. Commissioner of Income Tax (Appeals)-53, Mumbai, in the hands of both the assessees’ herein. The appeals filed in the case of Milan H. Sanghavi, pertains to AYs. 2006-07, 2008-09, 2009-10 and 2011-12.

The appeals filed in the case of Milan H. Sanghavi (HUF), pertains to AYs. 2006-07 to 2011-12. Since the issues urged in all these appeals are identical in nature, all the appeals were heard together and are being disposed-of by this common order for the sake of convenience.

2. In all these cases, the Revenue is contesting the decision of the Ld. CIT(A) in directing the AO to sustain addition @ 12.5% on the value of the alleged bogus purchases.

3. The facts relating to the issue are stated in brief. The Revenue carried out search and seizure operations in the case of a company named M/s. Satra Properties (I) Ltd., on 23-12-2010. Simultaneously, search operation was carried out in the hands of the assessee, Shri Milan H. Sanghavi on the very same day. It was noticed that Shri Milan H. Sanghavi is the proprietor of M/s. Dipen Trading Co. Another concern named M/s. P.M. Enterprises was owned by Milan H.
Sanghavi (HUF). Both of these concerns are engaged in the business of trading in steel and cement.

4. In the case of M/s. Satra Properties (I) Ltd., the purchases made by them from three concerns named M/s. J.B. Interlink, M/s. P.K. Trading Co., M/s. N.B. Enterprises were accepted as bogus by M/s. Satra Properties (I) Ltd. It appears that the search parties identified the two concerns belonging to the assessees herein, viz., M/s. P.M. Enterprises and M/s. Dipen Trading Co. also as bogus billers. However, during the course of search operation M/s. Satra Properties (I) Ltd., did not accept that the purchases made from the entities belonging to assessees herein are bogus.

5. In the above said background, AO examined the purchases made by the assessees herein. It was noticed that the assessees have purchased materials from the following concerns, which were identified as Hawala Parties, i.e, they were providing only accommodation bills, without actually supplying the materials:

i. M/s. Shree Sai Trading Co
ii. M/s. Entech Enterprises
iii. M/s. CNS Trade Links Pvt. Ltd.,
iv. M/s. J.B. Interlink
v. M/s. KRC Trading Co
vi. M/s. R.K. Ispat
vii. M/s. Jindal Steel Corporation
viii. M/s. Tulsiani Trading Pvt. Ltd.,
ix. M/s. Paras Enterprises
x. M/s. Centurion Sales Corporation
xi. M/s. Rashmi Enterprises
xii. M/s. Macos Iron & Steel Pvt. Ltd.,

5.1. The AO issued summons to the above said parties but none of them appeared. Hence, AO asked the assessee to produce the above entities. The assessee produced Shri Dharmendra Kumar Amritlal Darjee on behalf of M/s. KRC Trading Co. In the statement taken from him, he submitted that he has actually supplied the materials to the assessees herein. He also furnished details of his income tax returns, sales tax returns along with supporting documents to show
payment of VAT. The assessee also furnished sales tax returns pertaining to another supplier named M/s. Macos Iron & Steel Co. Ltd. In respect of remaining 10 parties, the assessee could not produce anything.

5.2. The AO noticed that the assessee had also purchased materials from M/s. J.B. Interlink. The proprietor

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