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Per Shamim Yahya, A. M.:

These cross appeals by the Revenue and the Assessee are directed against the respective orders of the learned Commissioner of Income Tax (Appeals), Mumbai ('ld.CIT(A) for short) pertain to the respective assessment years.

Sikkim Ferro Allo ys Lt d.

2. Since the issues are common and connected and the appeals were heard together, these have been consolidated and disposed of by this common order.

1. Aakash Ferromet Pvt. Ltd.

2. Adhunik Steel Corporation

3. Arihant Trading Co.

4. New Steel (India)

5. Moksh Trading Co.

Sikkim Ferro Allo ys Lt d.

During the course of assessment proceeding, the Ld. AR of the assessee company was issued a show cause and asked to prove the genuineness of the transactions, on account of purchases made, during the year under consideration along with the documentary evidence such as Ledger Confirmation, Bills, Lorry Receipts, Delivery Challans, Weighing Bridge Receipts, etc. The AO further noted that in the meanwhile, a survey action was conducted on the assessee company on 26.12.2012 by the Investigation Team, Mumbai. During the course of survey action, it was found that, the assessee has made purchases from the alleged parties (who have provided accommodation entries without actual delivery of goods). The purchases made from alleged parties are as under:

6. Upon AO enquiry in this regard, assessee referred to the details given in the survey and response thereto. The assessee also stated that statement given by proprietor of M/s. Arihant Trading company was general in nature that no adverse inference has been given by Investigation Officer. Assessee also denied that it was aware of as to Sikkim Ferro Allo ys Lt d.

how investigation was done by Sales tax department. Assessee further submitted that since purchases are from local, lorry owners normally do not given any lorry receipts. Assessee also placed reliance upon case laws in this regard. However, the AO was not satisfied. He proceeded to add peak credit involved in the transactions and held as under:-

Sikkim Ferro Allo ys Lt d.

g. After carefully going through the accounts of sundry creditors, the peak credit balance in the accounts of the bogus traders cum creditors from whom the assessee has taken bogus purchase bills was worked out. The bogus purchase during the year under consideration from bill providers isRs.5,58,60,854/- . h. From the above findings and on the basis of Sales Tax Department (Maharashtra) findings regarding these alleged parties, it is inferred that the assessee has resorted to cash purchases in the open market, and the payments were done through cheques to the alleged parties, the peak credit balance shows the cash in the hands of each assessee. Hence, the peak credit is also calculated. The peak credit in the case of assessee company is Rs.4,93,60,854/-. Hence, an amount of Rs.4,93,60,854/- is added back to the total income of the assessee. The penalty proceedings have been initiated u/s 271(l)(c) of the IT Act, 1961, separately for concealing the particulars of total income and filing inaccurate particulars of income.