Nikunj stock broker

Subscribe To Our Free Newsletter: The author has carefully examined the legal provisions, put the entire issue in its proper perspective and offered practical suggestions on how assessees can safeguard their interests Link to download this article in pdf format is at the bottom.

HC SLP dismissed by the Supreme Court dealing with set off under section 48 5 and 51 7 of the Maharashtra Value Added Tax Act, Issue before the court was when dealer collects the taxes and does not deposit it in the Government Treasury, can the purchased be entitled to set off of the said taxes. Validity of the provision was challenged. Upholding the validity of the provision the court held that. There is no reason for the court to depart from the plain and ordinary meaning of these words when used in the context of section 48 5.

In the said judgement, a statement was made on behalf of the Sales Tax authorities that nearly 35, notices have been issued to hawala beneficiaries involving a quantum of nearly 1, crores rupees. The statement and affidavit was made before the Court that the State Government shall pursue action against selling dealers who have collected tax from purchasing dealers but have not deposited the same into the Government treasury.

Statement was made before the Court that in cases of hawala transactions, recovery action and or prosecution would be initiated against such suppliers.

The Sales Tax department is bound by the assurance given before the Court. As per the information on the website of Sales Tax authorities, i. List of non-filers of CST is 93,and that of VAT is 69, as on Based on available information and information received from Sales Tax authorities, income-tax officials have issued notices to various assesses, a number of assessments have been completed, some under process and some may receive notice in due course. Assuming each of the alleged 35, beneficiaries must have dealt in two assessment years there would be at least 70, scrutiny assessments.

Whether a transaction of purchase is genuine or not is always a question of fact and the primary onus is on the assessee to prove the genuineness of purchases. Representation before tax authorities becomes very important, because once the addition is confirmed by the Tribunal, the Assessing Officer will levy the concealment penalty, and once the penalty is confirmed in number cases, the department has started initiating prosecution proceedings.

One can approach the High Court under section A of the Income—tax Act,only on substantial question of law and not on facts. Therefore, making a good representation before the Assessing Officer, drafting of grounds of appeal and statement of facts before Commissioner Appeals is very important.

Many times, it is observed that assessees do not file or file inadequate and incomplete statement of facts. When the matter is taken up before the Tribunal or High Courts, grounds before Commissioner Appealsand statement of facts become very important part of record and evidence. Broadly there could be four types of dealers from whom the assessee might have purchased the goods.

Now they may say that I have issued only hawala bills. Direct Taxation issues may arise when the purchases are from suspicious dealers. If yes, whether of individual account or of all the alleged bogus purchases from all dealers together? Korlay Trading Co Ltd ITR Cal.

The genuineness of transaction was doubted by the AO. Purchase and sale of shares made through broker. The assessee furnished the name of the company, number of shares purchased, date of sale, amount of purchase and sale money etc.

The assessee had discharged its initial burden. The claim of the assessee could not be denied merely because the broker, through whom the shares were purchased and sold, failed to produce his books. That does not mean that the transaction was not genuine. Loss on shares could not be disallowed.

Adinath Industries ITR Guj. SLP dismissed ITR St AO issued notice on ground that purchase made by assessee were bogus. Duty of authorities to make necessary inquiry before arriving at conclusion. The asessee had produced the gate pass, receipt note, weight note, laboratory report and sample report. The matter was decided on appreciation of evidence. Deletion was held to be valid. Applying the same principle if sales tax authorities have taken the view that the purchases are bogus and if assessee has accepted the same.

The order of Sales Tax authorities can be relied on by the AO to doubt the genuineness of the purchase transactions. In such a situation the burden is on the assessee to prove that though the sales tax authorities have taken the view that purchases are genuine.

The assessee has recorded the transaction relating to 50 M. However, books of account were not rejected. Identity of vendor was disclosed, source of investment was explained. Held, amounts could not be added as unexplained investment only because the vendor denied the transaction. And the fact that Sales Tax was not paid by the party who sold the goods does not affect the genuineness of transaction.

Kishan Lal Jewels P. The assessee while furnishing necessary information regarding the transactions and the aforesaid parties like purchase bills issued against goods purchased, sales- tax registration numbers of the parties, PANs, their confirmations and Bank statements showing the debit of the amount paid through Account payee Cheques to them in the account of assessee and credited in the Bank Account of sellers, had discharged its primary onus, thereafter the onus shifted on the department to rebut the same.

Addition under section 69C was held to be not justified. AO cannot make addition on the basis of observations made by the Sales Tax department without conducting independent enquiries. Nikunj Eximp Enterprises P. Sale to government department-Alleged bogus purchases-Sales not doubted, merely because suppliers not appeared before the Assessing Officer or Commissioner Appealspurchases cannot be disallowed.

Purchases made by assessee. Subsequent statements by sellers in Sales Tax proceedings that they had issued bogus vouchers. No evidence that bogus vouchers were issued to assesse. Payments by account payee cheques.

Amount represented purchases cannot be disallowed. YFC Projects P Ltd. DCIT 46 DTR Delhi Trib. Non filing of confirmation. AO was not justified in making disallowances of purchases made by the assessee merely due to non filing of confirmation from suppliers especially when the assessee has filed certificate from bank indicating the facts the cheques issued by it were cleared and no defects in the books of account was pointed out.

Addition under section 69 was not justified merely because suppliers could not be located and were not produced for examination. Scrap purchase made in cash from kabarias who did not issue bills, on internal vouchers. Stock register was maintained. Addition as bogus purchases was deleted. Assessee having failed to prove that such oil cakes were received from outside Gujarat State, as shown in aforesaid invoices, disallowance by Assessing Officer of entire freight charges in relation to aforesaid purchases had to be confirmed.

Addition made on account of purchases of oil cakes shown as made from 33 bogus suppliers could adequately cover unexplained peak amount of investment made in purchase of such oil cakes, and no separate addition could be made in respect of closing credit balances found against some of those bogus suppliers.

No appeal was filed against this order. However, in one of the orders wherein this order was relied on went to High Court. High court referred the decision and approved the decision. Some purchases are bogus. Estimation of profit is only held to be justified. AO had information that these parties are hawala entry givers-Entire purchases were added. Both the assessee and Revenue filed an appeal before the Court. High Court affirmed the view of Tribunal.

Both local sales as well as export. Purchases from four parties.

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In response to notice under section 6 none of them appeared. Enquiry by inspector revealed that five parties could not be located at the given address. Assessee produced the following documents.

Copies of purchase invoice, Copies of bank statements depicting payments made by way of account payee cheques, Quantitative disposal of these purchases showing corresponding export made out these purchases, Copies of export invoices bill of lading, foreign inward remittance certificate, Sales tax registration certificate both under the Maharashtra Sales Tax Act as well as the Central Sales Tax Act in respect of some of these parties, PAN of one of the parties Ledger account of the parties, their confirmation etc.

T including verification report of sales tax inspector, parties affidavit etc. In appeal CIT A following the ratio of Ahmedabad Tribunal in Vijay Proteins Ltd v.

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Assessee and department filed appeal to the Tribunal. Tribunal held that the assessee has discharged the primary onus which laid upon the assessee, though the assessee failed to put up the any appearance of the parties before the AO. It was upon the AO to prove that the documents are not genuine. AO never stated that the documents were bogus. Addition confirmed by the CIT A was also deleted and the appeal of assessee was allowed. Duty of the AO to issue a show cause notice calling upon the assessee to furnish explanation before disallowing the claim.

Gujarat Zenith Processing Mills v. CIT ITR Guj. It is an inherent part of section 3that where the AO is not inclined to accept the return submitted by the assessee and if he wants to modify the assessment from the return, a show-cause notice is required to be given to the assessee.

It is mandatory for an AO to issue a show cause notice, before disallowing the expenses. Obligation of the assessee- S pecific request in writing before the AO to. Summon the supplier Give an opportunity to examine him on oath Inspect his books of account Verify his proofs Examine his banker Cross check with his AO Cross check with the STO Cross check with other Govt agencies.

CIT v Hi Lux Automotive P. The reason for disallowing expenditure in respect of other four parties was that when the notices were sent they were not available.

We are of the opinion that even in their absence the assessee had produced sufficient material to show payments, namely the bank accounts of such parties. We are constrained to note that if the summons are not issued to those parties or the same could not be served at the given addresses, the Assessing Authority could have obtained their addresses from the banks as the bank statements were produced and could have made an endeavour to serve those parties at the said addresses.

Once quantitative tally of sales is furnished, the same should be accepted. No addition could be made. CIT ITR SC "an assessment made without giving the assessee an opportunity of setting out his case was liable to be set aside". CIT 26 ITR SCif the AO proposes to use any material against the assessee, which is obtained by private enquiry, it should have been communicated to the assessee so as to know full particulars of the case and the failure to do so vitiates the case of the Revenue.

Eastern Commercial Enterprises ITR Cal. The assessee is entitled to cross-examine the person who was examined by the A. Cross —examination is the sine qua non of due process of taking evidence and no adverse inference can be drawn against a party unless the party is put on notice of the case made out against him.

He must be supplied the contents of all such evidence both oral and documentary, so that he can prepare to meet the case against him. This necessary also postulates that he should cross —examine the witness hostile to him. LTD ITR 17 ST SC ITA NO OF DT Delhi HC. Person who has issued the bills has given the statement that he was carrying on the business of issuing bogus accommodation bills on commission basis with the assessee, and this was not put to the assessee for rebuttal or cross-examination, High Court held no substantial question of law.

On SLP by revenue the Court held that if the AO wants to use some statement made before him, then on request by the assessee, is bound to put the deponent for cross examination. Though the proceedings under the Income-tax Act are not governed by the strict rules of evidence, the department is bound to afford an opportunity to controvert and cross examine the evidence on which the department places its reliance. Opportunity of cross examination must be given. The consequence of breach of natural justice is that either the addition is void or matter may have to be to be remanded to lower authorities.

Display of information on website of VAT authorities cannot be the sole ground for rejecting the claim of assessee. Kalathil, Mum Trib ITA No. Suspicious purchases — Name on website of Sales Tax Department as hawala dealer not enough to disallow purchases. Held, the AO had made the addition as one of the suppliers was declared a hawala dealer by the VAT Department. The Tribunal observed that this was a good starting point for making further investigation and to take it to its logical end.

But, the AO left the job at initial point itself. It was further held that suspicion of highest degree cannot take place of evidence and the AO could have called for the details of the bank accounts of the suppliers to find out whether there was any immediate cash withdrawal from their account. Transportation of good to the site is one of the deciding factors to be considered for resolving the issue and the CIT A had given a finding of fact that part of the goods received by the assessee was forming part of closing stock.

Furthermore, since the proof of movement of goods is not in doubt and there is nothing in the order of the AO about cash trail, disallowance could not be made.

AO received information from the Sales Tax Department that the purchases made by the assessee from two parties were bogus. Solely relying on the same, AO made addition under s. Tribunal held that no addition can be made in the hands of the assessee merely on the basis of observations made by a third party.

While making the assessment, it is the satisfaction of the AO which is of prime importance. It cannot be substituted by the satisfaction of someone else. Assessee has discharged the primary onus cast on him by showing the purchases in the books of accounts, payment by way of account payee cheques and producing the vouchers of sale of goods.

AO did not make requisite investigations against the said sellers. Moreover, no opportunity was given to the assessee to confront the sellers.

Affidavit of the supplier, subsequent to disowning, accepting the transaction will discharge the obligation of the assessee. Mere affidavit will not discharge the burden. CIT 30 ITR SC had held that when an affidavit is filed, the same is proved to be correct unless it is proved to otherwise. Once affidavit is filed, if the AO is not ageing with the contents, the assessee can ask the AO to issue summons.

If summons issued and statement is recorded and the person affirms what is stated in the affidavit is correct. The burden is discharged. In spite of issuing summons the one who has given the affidavit does not present himself, the affidavit will not help the assessee. Mumbai Tribunal rejected the affidavit on the ground that it was not in the proper form. It desirable that professionals may read this judgement before preparing an affidavit.

It is not case of the Revenue that the assessee is not maintaining books of account. The purchases are recorded in the books of account. Payments are made by cheque to the immediate purchasers. They accepted and confirmed the sale. To hold otherwise, there should be some evidence in the possession of the Revenue. Suspicion, however strong, cannot take the place of evidence and that alone cannot be the criteria for deciding the matter. Addition to be restricted to rate of Gross Profit or the entire purchases to be disallowed.

It is a settled principle of income—tax law that it is the real income which is taxable under the Act. Leaders Valves P Ltd. MotaniITA Nos. The AO made disallowance of entire purchases. Only few parties filed confirmations. Note-Tribunal considered the Delhi High Court CIT v. La Medica ITR Delhi which is against the assesse, which was distinguished by Delhi High Court in CIT v. Hilux Automotive P Ltd.

The assessee derived income from commission from newspaper agency sales and purchases. He filed his return on March 31, The Assessing Officer observed that the assessee made sales in cash and while making the best judgment assessment accepted the sales showed by the assessee but applied a higher gross profit rate and made addition in respect of income from newspaper business. He also made trading addition under section 40A 3 of the Act, on the nikunj stock broker that the assessee made cash payments to the newspaper company.

The Commissioner Appeals deleted the addition on the ground that when income was assessed by estimating the profit after rejection of the books of account no disallowance could be made separately under section 40A 3 of the Act.

On appeal by the Department the Tribunal held, that the Commissioner Appeals rightly deleted the separate addition made by the Assessing Officer under section 40A 3 of the Act.

Payment by crossed cheque attracts S. The expression earlier used in s. This was done in the background of the experience that even crossed cheques were being endorsed in favour of a person other than the drawee making it difficult to trace the constituent of the money. To plug this possible loophole, the requirement of section 40A 3 was made more stringent.

If we accept the contention of counsel for the assessee that there was no distinction between a crossed cheque and an account payee cheque, we would be obliterating this amendment brought in the statute with specific purpose in mind.

Cash credits-Bogus purchases — payment made by cheques- -Sales accepted-Purchases cannot be held to be bogus.

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The Assessee had made how to buy bmw stock in usa purchases. On account of unverifiable purchases, the Assessing Officer made additions to the tune of Rs.

He was of the opinion that none of the parties could be located and therefore, such purchases were held to be bogus.

When it was challenged before the CIT Athe CIT A was of the opinion that they could not be held bogus as the corresponding sales had been effected by put call options warrants respondent in the next year.

In subsequent year also and in the past, such purchases were made which were never questioned. When challenged before the Tribunal on jforex platform review basis of the facts presented before us, it held that these work home data entry jobs hyderabad without investment could not be held bogus.

The High court held that the issue is essentially based on facts. The Tribunal, having been satisfied by genuineness of the purchases as also considering the payments made through the cheques, was of the opinion that such addition could not be sustained.

Issue, essentially and pre-dominantly any project report on fundamental analysis on stock market on facts, requires no consideration as no question of law arises.

Purchase of grey cloth from Bhivandi parties. The AO made addition of Rs. Doctors make money on prescriptions assessee claimed that the grey cloth was processed and sold to sister concern. The purchase parties were not traceable, only few parties filed confirmation.

However the payments were made by crossed bearer cheques. The ITAT ultimately held that only G. Bholanath Poly Fab P. Unexplained investments—Purchasers not traceable —Profit element embedded in purchases. Assessee is engaged in the business of trading in finished fabrics. Assessing Officer disallowed the purchases on account that parties from whom purchases were made are not found at the addresses given.

CIT Appeals stocks goldman sachs conviction buy list the assessment order. Tribunal held that purchases were made from bogus parties, but the purchases themselves tiny teacup yorkie puppies for sale in illinois not bogus as entire easy earning money without investment of opening stock, purchases and the quantity manufactured during the year under consideration were sold by the assessee.

Therefore, Tribunal held that additions should not be the entire amount, but the profit margin embedded on such purchases would be subjected to tax.

AY — Addition were made to the income of the assessee on the ground that the purchases were fictitious. The Tribunal found that there was no evidence to say that the purchases were bogus.

Deletion of addition was held to be justified. Provision of section 69C cannot be made applicable. Kirtilal Kalidas Jewellers P. Purchases recorded in the books of account though did not carry the address of parties cannot be treated as unexplained purchases. During assessment proceedings, Assessing Officer found that for beagle puppies for sale in stockport of purchases effected by assessee, no details or address of vendors were available in purchase vouchers.

He, therefore, considered such purchases to be non-genuine and an addition was made on that account. Since purchases were recorded in books of account of assessee and were also shown in its stock, in such circumstances jquery drop down list remove option because those purchases did not carry full addresses of vendors, could not be a reason to treat the said purchases as unexplained.

Therefore, impugned addition made by Assessing Officer was to be deleted. Provision of section forex managed accounts for us citizens cannot be applied.

Entries were made in the regular books of account. No allegation that the rates of various items stated in the purchase invoices are understated and the supplier concerns were found to be genuine concerns. GP rate was normal. Where a quantitative tally of sales furnished, even if hedging strategies in indian stock market are not available, no addition can be made merely on assumptions or presumptions or surmises or conjectures.

HC [SLP rejected ITR St. In the present athens stock exchange open hours, the details about purchases were furnished.

The transactions were through a broker whose bill was produced. All the details from the stage of receipt to production were produced. For further verification the assessee produced gate pass, avakchitti receipt note and weight note.

The assessee produced laboratory report and sample report. It pointed nikunj stock broker the difference paid or recovered in view of reports. The assessee produced R. The assessee pointed out the production and purchase of raw materials. The assessee submitted the details about the transaction, truck number, etc.

Thus, the assessee produced relevant materials to show purchase of materials and its use in production. Brahmaputra Steels P Ltd 76 TTJ Gauthati Trib. Assessee had maintained daily stock register in respect of purchase of raw materials and production of finished goods as required by the Central Excise Act and also furnished weekly, fortnightly and quarterly returns before authorities, factum of purchase of raw materials could not be disputed.

Therefore, transactions of purchase of raw materials were genuine and accepted. Summons issued to 12 parties returned unserved. Payments were crossed cheque Not account payee cheques -No allegation that the amount was received back by assessee. Sales were accepted —No sales can be made without purchases. Abhay Kumar Bharatkumar Shah v. Accordingly, we accept the transaction of sale of loose diamonds and gold jewellery in the hands of the assessee genuine. Non availability of the supplier at the last known address may not be the sole basis.

ACIT TTJ Ahd. Purchases were recorded in the regular books of account maintained. The assessee filed the necessary details regarding name, address, sales-tax number. The payments were made through banking channels. Thus, the sales against purchases are not doubted. It is not the case of AO that amounts paid for purchases had come back to the assessee.

AO had made addition merely on the ground that the suppliers are not located and they were not produced for examination. This is not a relevant factor.

Additional stock market symbol cargill surrendered by the assessee firm having been added to the income of the business itself, it is to be considered while working the deduction under section IB.

Mere information on web site may not constitute the information, however, based on the same the return of the assesse is verified and after recording the reasons the notice is issued it may be valid information. Reassessment-Alternative remedy-Writ petition to challenge a reassessment order should not be entertained.

The assessee filed a Writ Petition in the High Hurricane sandy affecting the stock market to challenge the said notice and re-assessment order.

The High Court entertained the Writ Petition and quashed the re-assessment order. On appeal by the department to the Supreme Court HELD reversing the High Court:.

The assessee cannot be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article of the Constitution when he has adequate remedy open to him by an appeal to the Commissioner of Income-tax Appeals.

As the said statutory remedy is an effectual and efficacious one, the S&p 500 put options prices Court ought not to have entertained the Writ Petition filed by the assessee. Reassessment—Notice and order on objections cannot be challenged in a Writ Petition.

However, this decision would not bind assessees in states other than Tamil Nadu. The department relied on the judgement of the Madras High Court in JCIT vs. HELD by the High Court rejecting the plea:. The argument, based on JCIT vs. Kalanithi Maranthat this Court should not exercise its writ jurisdiction under Article of the Constitution of India and the petitioner should be left to avail of the statutory remedies available under the Act, is not acceptable. The decision of the Madras High Court in Kalanithi Maran proceeded on the basis that the dispute urged before it were with regard to adjudicatory facts and not with regard to jurisdictional facts as raised in this petition.

The Madras High Court itself points out that that when an assessment sought to be reopened by an Officer who is not competent to do so or where on the face of it would appear that the reopening is barred by limitation or lacks inherent jurisdiction, the court which dragons earn the most money dragon city certainly entertain a challenge to the reopening notice in its writ jurisdiction.

The Madras High Court itself drew a distinction between the adjudicating facts and jurisdictional facts. Jurisdictional facts are those facts which give jurisdiction to enter upon enquiry, while adjudicatory facts come up for consideration after validly entering upon enquiry i. It is only when jurisdictional facts are satisfied will the AO acquire the authority to deal with the matter on adjudicatory facts.

The decision of the Madras High Court is of no avail in the facts of the present case. It may be pointed out that there could forex techniques strategies occasions where jurisdictional facts could itself be a matter of factual enquiry. In such a case even if the challenge is with regard to jurisdictional facts, yet the Court in its discretion how to become a successful commodity trader in indian not entertain the petition as it could be best left for determination before the authorities under the Act.

ITO, ITA WP Lodging no. Reassessment — Suspicious purchases — Disposal of objections — To be linked with recorded reasons. Assessment of the assessee roth ira options trading restrictions reopened.

The recorded reasons stated that the assessee had taken bnz forex forecast entries from a Surat based diamond concern and this information according to the recorded reasons was obtained by the Department from search and survey action on the said diamond concern. The assessee objected to the recorded reasons which were disposed off the by AO referring to investigation carried out by Sales Tax authorities, display of names of parties on the website of Sales Spot options binary trading signals reviews department.

Held, since these facts were even remotely adverted to in the recorded reasons, the order disposing off objections was held unsustainable in law with fresh opportunity to AO to dispose off the objections keeping in mind the recorded reasons. GKN Driveshafts India Ltd. When notice under section asian session forex signals reopening of assessment under section is received by an assessee, he should immediately ask for a copy of the reasons recorded value of put option calculator reopening, because the AO is obliged to give the same and also consider the objections raised by the assessee to the reopening.

Allana Cold Storage Ltdv. ITO ITR 1 Bom. Meena, ITO ITR Delhi HC. Assessee has kita sa stock market file objections. Assessing Officer has to dispose the objection. Assessing Officer should not proceed with assessment for 4 weeks thereafter. The assessee may decide whether to file writ petition or pursue normal legal remedies.

If the AO fails to provide a copy of the reasons recorded till the completion of the assessment, though specifically asked for by the assessee, the reassessment order is invalid.

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Wherein observed that where the notice was issued after expiry of four years and the A. Nickunj Eximp Enterprises Pvt. ACIT Optionvue backtrader 69 Bom HC. In the return of income the assessee stated that guaranteed return and bonus on keyman insurance being contingent receipts were not offered to tax. Notice was issued under section The assessee filed detailed reply and after considering the reply proceedings were dropped.

Once again notice was issued to tax the said sum. The assessee once again made the detailed representation to drop the proceedings. The AO did not drop the proceedings. Remington 700 adl varmint replacement stock assessee filed the writ petition. The second notice was quashed.

In cases where the order was passed by the AO by due application of mind, revision was not possible. Assuming the AO has passed the order applying the GP the CIT cannot revise on the ground that entire purchases should have been disallowed.

Assessment was reopened on the basis of survey action, it was alleged that bogus bills were purchased from two parties. Transporter entry was not made in the octroi. Quantity tally was produced. Commissioner revised the order on the ground that there was statement of transporter that the bills were bogus.

CIT set aside the order and directed the AO to once swedish stock market opening hours gmt re-examine the issue. The CIT has not agreed with the view of the Assessing Officer that itself would not give jurisdiction to revised under section Tribunal followed the ratio in Malbar Industries Co Ltd v.

CIT ITR 83 SC. One may also refer the judgment of jurisdictional High Court in Grasim Industries Ltd. CIT ITR 92 Bom. Officer must have made only addition to GP. If assessee files an appeal there could be possibility of enhancement of Income.

The CIT A has powers to enhancement. Statement of facts and grounds of appeal are the most important documents when the texas instruments stock options are filed before the Tribunal and High Court. SAS Pharmacetical ITR Delhi HC. ITO 49 ITD Delhi Trib. If survey takes place and the amount is disclosed in the return, penalty cannot be levied. What is punishable under section 1 c is actual concealment in the return and not merely an attempt to make concealment.

If due date has not expired and survey takes place and assessee offers the bogus purchases in the return, there engagement rings overstock reviews not be penalty under section 1 c. Concealment of income must be in the return. Penalty-Concealment-Surrender of income after detection of incriminating documents-Satisfaction need not be recorded in particular manner-Voluntary disclosure-Under Explanation 1 to s.

Penalty—Concealment-Bogus purchases—Statement of seller denying the sales-Penalty held to be valid. The seller, in urban forex correlation sworn statement, had stated that he had not made any sales and had given only bills to the assessee.

The assessee had also not chosen to cross-examine the seller. The Tribunal as well as the appellate authority managed forex account wikipedia not controverted or distinguished this fact by relying on any statement or material documents produced by the assessee.

Assessment was adding only GP. On appeal High Court reversed the order of Tribunal. Therefore, the levy of penalty was valid. Nalin P shah HUF www. Itatonline the court held that merely because claim of assesse was not sustainable in law penalty cannot be levied.

In prosecution proceedings under Income tax Act burden is on assesse to prove that there exists a reasonable cause. A person shall not be proceeded against for an offence under section C or section in relation to the assessment for an assessment year in respect of which the penalty imposed or imposable on him under clause iii of sub section 1 of section has been reduced or waived by an order under section A.

Once the commissioner waives even part of penalty, there cannot be prosecution. However, if waiver petition is rejected, only remedy is to file writ petition before the High Court. One may have to draft the petition in such a way that at least some portion of penalty is waived. In Asha Pal Gulati v. CBDT ITR 73 Delhi HC. Court held that language of section A 3 does not talk of one year, but one instance. Hence, for a number of years, one application can be made.

This ensures finality of assessment with in eighteen months. Generally, the Commission is very liberal in waiving penalties. Therefore, in cases where reassessment is pending and appeal is set aside by the Tribunal, where order under section setting aside the order, or under order set aside under section, one can approach the settlement Commission. This is a welcome provision. A number of assessees have approached the settlement commission where matters are admitted and final orders have been passed accepting the gross profit on the alleged bogus purchases.

One has to be very cautious before approaching the Court. However, in an appropriate case it may be advisable to file a writ petition to challenge reassessment, recovery, not furnishing the information, early hearing of appeal or where there is gross violation of national justice, etc. Statement that the assessee stated that bogus bills are obtained and cash was withdrawn for getting various Govt contract. Can the assessee be penalised or prosecuted? In India, the main law concerning bribery is a legislation called the Prevention of Corruption Act, According to this law, bribe taking by a public servant and bribe giving are equally wrong and, in the event of conviction, both are punishable by anywhere between 6 months to 5 years imprisonment and they shall also be liable to fine.

For the most part, the act of giving and taking a bribe are treated at par under this law. It may be added here that the giving of a bribe is treated by lawyers as abetment to the crime of bribery, and so bribe giving is covered under this section.

State of Maharashtra, SC the bribe giver is in the position of accomplice and unless there is corroboration it is not safe to rely upon the evidence of the bribe giver. According to the learned counsel, giving bribe to a public servant is abetment punishable under Section 12 of PC Act and of the IPC.

When statements of parties or if assessee are not provided, the assesse can approach the Assessing Officer under the Right of Information Act. Assessees can also ask details of statues of alleged bogus dealers from the Sales Tax authorities, and assessment status under the Income—tax Act.

Addition on account of bogus purchases was justified where assessee had failed to discharge onus to prove that purchases were genuine. Raw material was purchased by assessee. AO gave finding that seller was not in existence. Bank account was introduced by one of the sister concern of the assessee. The amount was withdrawn by the person who introduced the bank account. On facts the high Court reversed the order of Tribunal and confirmed the order of AO. This decision was distinguished in CIT v.

Hilux Automotive P Ltd 23 DTR Delhi HC. Manufacturer — Specific finding by the AO in order to lower down the profits, bogus purchases was introduced. Assessee being manufacturer, the deduction of purchases against sales was not allowable. Burden is on assessee to prove the genuineness of purchases. Payments were not made. Court held that the assessee should furnish the latest address if they migrated to some other places.

Assessee has not discharged the burden. Request the AO to give the copies of documents which he intends to use against the assessee.

Make an application for copies of statement of parties and assessee if the statement was taken in the course of survey etc. If statement was given on wrong presumption of law or facts—File retraction within reasonable time.

Make application under RTI to get the information of the alleged hawala supplier and details of his assessment under Sales Tax. Tribunal is the final fact finding authority. Only question of law can be challenged in the High Court. Hence, proper representation before ITAT is very important. Precautions an assessee should take while dealing with new suppliers to avoid disallowance of claim for purchases. The Entire Law On Taxation Of Purchases From Suspicious Dealers Sir this all case studies has covered for all the 3 examples you had listed.

What will be the position of only bill providers during his assessment? In my opinion there must be harmonious balancing. Acckrding toion 48 2 of the vat act the purchasing dealer has verified validity of Tin number.

As per 48 5 he has taken certificate also. Even sales tax officers were sleeping for 5 years. One department says party is. Of tea eble another says party has refused to give information u der rti and third says that in fccancelled wef and hence the question of calling lparty does.

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Thus bar oniusly balancing as many knnoce t traders are suffering in. Y opinion tax should be paid by purcnasi g dealer Penalty by selling dealer and interest by department as they are also at fault. Kalathil Millennium Mumbai ITA No. In this case the AO made an addition of Rs.

First ground of appeal is about deleting an addition of Rs. Therefore ,he was asked give correct addresses or in the alternative to explain as to why the purchases of Rs. He was also asked to submit sample bills of those parties.

The assessee submitted a letter dated as under:. The sample bills submitted contained TIN numbers of the vendors. The same were verified in the Maharashtra sales tax department official website http: As regards DKE ,the website search did not yield any results for the TIN numbers shown in the bills.

The AO concluded that the TIN number shown in DKE bill itself was bogus. After considering the submissions of the assessee ,the AO held that same was not acceptable ,that merely payment to parties through banking channel did not prove the genuineness of purchase or genuineness of expenses made by the assessee. He made an addition of Rs. We have heard the rival submissions and perused the material before us.

We find that AO had made the addition as one of the supplier was declared a hawala dealer by the VAT Department We agree that it was a good starting point for making further investigation and take it to logical end. But ,he left the job at initial point itself. Suspicion of highest degree cannot take place of evidence. He could have called for the details of the bank accounts of the suppliers to find out as whether there was any immediate cash withdrawal from their account.

We find that no such exercise was done. Transportation of good to the site is one of the deciding factor to be considered for resolving the issue. The FAA has given a finding of fact that part of the goods received by the assessee was forming part of closing stock. As far as the case of Western Extrusion Industries. But ,in the case before us ,there is nothing, in the order of the AO, about the cash trail. Secondly ,proof of movement of goods is not in doubt. Therefore ,considering the peculiar facts and circumstances of the case under appeal, we are of the opinion that the order of the FAA does not suffer from any legal infirmity and there are not sufficient evidence on file to endorse the view taken by the AO.

So, confirming the order of the FAA, we decide ground no. Suresh Trading Company [ STC SC]. The High Court answered the question in the negative and in favour of the respondants. The High Court noted that the effect of disallowing the deductions claimed by the respondants was, in substance, to tax transactions which were otherwise not taxable. The condition precedent for becoming entitled to make a tax-free resale was the purchase of the goods which were resold from a registered dealer and the obtaining from that registered dealer of a certificate in this behalf.

This condition having been fulfilled, the right of the purchasing to make a tax-free sale accrued to him. In our view, the High Court was right.

A purchasing dealer is entitled by law to rely upon the certificate of registration of certificate of the selling dealer and to act upon it.

Whatever may be the effect of a retrospective cancellation upon selling dealer, it can have no effect upon any person who has acted upon the strength of a registration certificate when the registration was current. The argument on behalf of the department that it was the duty of person dealing with registered dealers to find out whether state of facts exists which would justified the cancellation of registration must be rejected.

Very nice information and cover all related subjects. We are very thank full and grateful to author. It is a fantastic work done, we salute to the author and their team. It is hot topic of the day and would be helpful to our professional colleague. Thank you sir, and we express our gratitude for the job done. It is a full and exhaustive article. Lot of work has been done and would be useful to lot many professional as it is a hot topic of the day. We sincerely are grateful to the author for their help to the professional brother and sister.

It is very good article on latest hot topic in the department. It will be useful to safeguard the interest of the clients before the authorities. A well research article. But, as professionalsit should be our duty to advise client to pay right ful taxes and do not suggest them the means of evading taxes. If we have to grow and prosper, we have to pay correct taxes to the government. It is our first and foremost obligation as well as our duty towards the country.

We have to change our mind set and thought process of evading taxes. What it shows is the States pass laws like Union of India without forward thinking that means lack of knowledge on what kind of implications there would be?

Again see here, the laws are balanced on scales mean pro and cons principles, if either pros or cons fail then it cannot be called any law at all can any man with common sense would say, true common sense is uncommon today in legislation making, today legislation is some spur moment activity with no balances in thoughts. How can one assume all people are dud while all executive is the most intelligent and clever species, in the situation of VAT why the state wanted seller take the VAT from buyer but state should have said the buyer himself pay VAT and thus sales could be effected like the banks pay housing cheques to seller once sale is registered at registrar office.

Laws today most imbalanced ones that constitutional courts first test before passing any judgements! However, you have inadvertently omitted reference to several decisions of the Gujarat High Court. Particularly Madhav Steel Corpn. Also Giriraj Sales Corp. It is fine summary of the law on the subject. Once again I have to congratulate a busy practitioner like you to devote time and energy on the subject of great practical importance.

I am happy to note that in the last issue of ITAT online. T returns till in cases covered by section 44AB. I am happy that the Gujarat High Court had taken a lead on the vital issue of practical importance compelling the CBDT to extend the time because of the writ of mandamus against the CBDT. Even under due process also is based on natural justice.

Law is not an end itself as its application should be based on sound common sensetrue it has become Uncommon among Revenue menjust because they apply laws and rules like an automaton machine like, if that is the end then just put robots in place why do you need a big batalion of revenue men if they do not understand what is discretion, why tax payers funds are getting wasted on their fat salaries and perks n like.

Bholanath Poly Fab Pvt. My amount was minimal and penalty was not levied, I have not appealed and have paid the tax. This is an excellent treatise on the burning subject and the author has worked very hard to do complete justice to the subject. I hope he will update the same at regular intervals to increase its utility. This article may start the trend to give one stop information on the concerned subject.

This article will prove immensely useful to the Bench and Bar. The author has done tremendous service to the professionals practicing on direct taxes. A great contribution on the burning issue, which every professional is effected by. I am sure it will go into the golden pages of the library of every professional. Keep up the good work, Doctor. Now Revenue due to VAT disclosure in sales taxes, the rev would go heltar-skelterbesides a large cash moves possible between bogus and revenue men.

Now vigilance need to keep watch on revenue, book the fellows duly under prevention of corruption Act, that way reduce such corrupt officers who only help all bogus assesses to surface. Central vigilance commission need to keep track as most officers either knowing or not knowing IT laws masquerade the revenue.

As far as Punjab is concerned, information regarding genuineness of supplier is flashed while filling VAT Returns. I think this is the first artile available on the subjeact of utmost importance in the present days.

The author has touched upon each and every aspect of the subject matter. Indeed a great service to profession. As usual a great contribution by Great Dr. Very well written article. The suggested precautions are good but, I am afraid, some of those are not practicable.

But the issue needs contest in Bombay High Court since any number of citation fails to move the adamant authorities of the VAT administration. Most thanks for Good views Dr. Further your hard work is most valuable and knowledgeable for all of us who are dealing with the cases in several courts. But for all that bogus transactions our professionals friends are equal responsible because they badly advised to the businessmen for taking this type of transaction to reduce the tax liability. It would be batter if they advise to pay tax least taxes batter utilizing the applicable laws and exemptions too.

It is very bad on your part to blame professional persons for such hawala transactions. Businessmen and their staff are quite experienced and qualified enough to manage such transactions. They do no need such advise from professional persons. Even professional persons who even do audit also do not know or can identify such transactions. So please be kind and respectful enough to respect professional persons. A Well researched article.

Author deserves our Kudos. Hope dept apellate authorities will take note. Your email address will not be published. Leave this field empty. Notify me of follow-up comments by email. Notify me of new posts by email. If you are a tax professional, you must sign up for our free newsletter. Because we keep you informed about the latest developments in the world of tax. Link to download this article in pdf format is at the bottom. Compiled by Mr Rahul Sarda, Advocate, KSA Legal Research Team.

Lecture delivered on for the Chamber of Tax Consultants, Mumbai at IMC. February 22, at 5: Kunal A Mody says: March 2, at March 1, at February 22, at 9: Kothari Former Member, ITAT says: February 4, at 5: February 4, at Bhatt from Bhavnagar says: January 28, at 1: January 22, at December 23, at 6: November 5, at October 10, at 6: H Kaji, Advocate says: September 27, at 9: October 20, at September 24, at SAMIR N DIVATIA says: September 23, at 9: September 19, at 4: September 15, at 1: September 11, at 9: September 10, at 9: September 10, at 8: S S Chug says: September 10, at 7: December 15, at 8: September 10, at 3: Ashwani Joshi, Advocate says: September 10, at 2: September 10, at 1: September 10, at September 17, at Ashok B patel says: Leave a Reply Cancel reply Your email address will not be published.

In other words, at what rate, the client shall pay GST? Adv C P Chugh: HI Mr Paras Nice write up on FTC. I would like to know How form 67 is to be furnished i. Very good, well researched article. Sir, In many firms of advocates and individual advocates, the services are availed from other firms of Responsive Theme powered by WordPress.

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