TMI Blog2020 (3) TMI 1337X X X X Extracts X X X X X X X X Extracts X X X X ..... ned and the cheques issued to M/s Vishal Traders were only an eye wash, the cash was returned back to the assessee. The assessee in the present case has not placed on record either before Assessing Officer or before CIT(A) with regard to its GP rate or maintenance of the stock register or to show that the prices shown in the bills of the Vishal Traders where the current prevailing price of the goods, which was shown as purchases by the assessee. The CIT(A) has carried out a detailed inquiry and on analysis of facts has come to the conclusion that as the purchases claimed from the Gayatri Cotton could not be substantiated by the appellant-assessee and there is nothing on record to show that the cash purchases made by the appellant were true and correct. No purpose would be served to remand the matter back to the Tribunal so as to give an opportunity of hearing to the appellant as the Tribunal has passed the impugned order in absence of the appellant. No legal infirmity of the impugned order passed by the Tribunal - No substantial question of law. - R/TAX APPEAL NO. 45 of 2020 With R/TAX APPEAL NO. 10 of 2020 - - - Dated:- 3-3-2020 - HONOURABLE MR. JUSTICE J.B. PARDIWA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e CIT(A) by following the decision of the High Court of Gujarat in case of Sanjay Oilcake Industries vs. Commissioner of Income-Tax reported in 2009 (316) ITR 274 (Guj.) without considering the facts of the case. 5.3. The learned senior advocate further submitted that the Assessing Officer has made addition of the entire purchases from M/s Vishal Traders of ₹ 5,67,49,767/- as which was reduced to 25% by the CIT (Appeals), but the Tribunal did not appreciate that the appellant submitted accounts of the suppliers together with account of M/s Vishal Traders and Gayatri Cotton. Moreover, sales and closing stocks are not disputed by the Assessing Officer. It was submitted that there is no basis of taking estimation of income of 25% despite there being no rejection of books of accounts by the Assessing Officer under Section 145 of the Act, 1961. 6. On the other hand, Mr. M.R. Bhatt, the learned senior advocate assisted by Ms. Mauna Bhatt, the learned standing counsel appearing for the respondents-Revenue submitted that a Co-ordinate Bench of this Court by order dated 11.02.2019 passed in Tax Appeal No.705 of 2019 has confirmed the impugned order passed by the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the transporters involved in the delivery of the goods during the course of assessment proceedings, however, the assessee failed to do so. As the assessee could not produce any independent or third party evidence in support of its claim of purchases from M/s Vishal Traders. The Assessing Officer after discussing the facts and placing reliance on various judicial pronouncements made addition of ₹ 5,67,49,767/- to the total claim of the assessee as under the bogus purchases. 9. Being aggrieved, the assessee preferred appeal before the CIT(A), wherein the addition came to be restricted to 25% of the alleged bogus purchases on the basis of the decision of this Court in case of M/s. Tirupati Cotton Ginning Factory. The CIT(A) has observed as under : In the instant case the appellant has made purchases from several parties, Vishal Traders and Gayatri Cotton Co. being two of them. Out of total purchases 15,08,70,598, purchases from Vishal Traders claimed of ₹ 71,29,715 and from M/s. Gayatri Cotton Co claimed of ₹ 1,13,73,994 are accommodation entries, to regularize purchases made from farmers / unregistered dealers who do not issue bills. Therefore, in my ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s order, it is held that the amount of purchases shown from Gayatri Cotton Co of ₹ 1,13,73,994 are actually inflated purchase to regularize cash purchases from unregistered dealers / farmers. It is important to mention that in the bank account of Gayatri Cotton Co. maintained at the Harij Nagrik Sahakari Bank Ltd. Harij, the address of Gayatri Cotton Co. given is: Tirupati Cotton Ginning Factory, Vaghel Road, Harij which shows that the two concerns operate in tandem. And the contention of the appellant that bills were obtained from Vishal Traders to regularize purchases from unregistered dealers has to be seen in the light that it is Gayatri Cotton Co which was also issued bills to the appellant firm. Therefore, placing reliance upon Hon'ble Gujarat High Court decision in the case of Sanjay Oil Cake Industries 316 ITR 274 the Assessing Officer is directed to restrict the bogus purchases addition from Gayatri Cotton Co of ₹ 1,13,73,994 also to 25%, which comes to ₹ 28,43,499. The balance is directed to be deleted. 10. Being aggrieved by the order of the CIT(A) for both the assessment years 2008-2009 and 2009-10, the Revenue as well as the assessee pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter of Sanjay Oilcake Industries Vs. Commissioner of Income Tax (2009) 316 ITR (Guj) , we do not see any infirmity in the order passed by the learned CIT(A). Thus we dismiss appeal of the Revenue 6. xxx xxx xxxx xxx 7. xxx xxx xxxx xxx 8. xxx xxx xxxx xxx 9. Now, we come to ITA No. 1462/Ahd/2012 for AY 2009-10 (Assessee's appeal). 10. The facts and circumstances of the case are common in this year. Only amounts and assessment year are different. So, having parity with outcome of ITA No. 1461/Ahd/2012 for AY 2008-09 of the assessee, we dismiss the appeal of the assessee. 11. Now, we come to Revenue's appeals ITA Nos. 949 1242/Ahd/2012 for Ays. 2008-09 2009-10. Since, we have confirmed the order of the learned CIT(A) on merit in ITA No. 1461/Ahd/2012 and therefore appeals of the Revenue are also dismissed. 12. The Tribunal dismissed all the appeals filed by the assessee and the Revenue. It appears that the Revenue preferred tax appeal No.705/2019 under Section 260A of the Act, 1961 from the common order passed by the Tribunal dated 29th March 2019. A coordinate bench of this Court in the said Tax Appeal has held as under : 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n able to dispute that sales and the stock position. It is in these circumstances that the Commissioner (Appeals) has placed reliance upon the decision of this court in the case of Sanjay Oil Cake Industries v. Commissioner of Income-tax (supra) and restricted the addition on account of bogus purchases from Vishal Traders to 25%. The Tribunal has concurred with the findings of fact recorded by the Commissioner (Appeals). 11. In the light of the concurrent findings of fact recorded by the Tribunal that the sales had not been disputed by the revenue authorities, no infirmity can be found in the approach adopted by the Commissioner (Appeals) as well as the Tribunal in restricting the addition made on account of bogus purchases to 25% of ₹ 5,67,49,767/- which comes to ₹ 1,41,87,441/-. Under the circumstances, no question of law can be said to arise insofar as the said issue is concerned. 12. Insofar as the proposed question (B) is concerned, the Commissioner (Appeals) has found that the assessee had accepted taking bills from Vishal Traders. The addition made on account of bogus purchases came to ₹ 1,41,87,441/- whereas the addition on account of undisclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, retained portion of the above by giving cogent reasons. The decision of this Court in case of Sanjay Oilcake Industries {Supra] was rendered in a slightly different fact situation. In the said case, the assessee had made purchases but the parties were not traceable. They had opened the bank accounts and immediately upon credit of the cheques, withdrawn the amount by bearer cheques. On such basis, the Tribunal had held that such parties were creation of the assessee itself for the purpose of banking purchases into books of account because the purchases with bills were not feasible. The Tribunal therefore, observed that such parties became conduit pipes between the assessee-firm and the sellers of the raw materials. It was on this basis that 25% of the purchase price was added by way of income of the assessee observing that possibility of inflating the price of the raw material cannot be ruled out. It was this decision that this Court upheld. In the present case, though it may appear that the purchases have been shown to have been made through M/s. Vishal Traders but supplied by some other agency, in absence of other additional facts noted by this Court in case of Sanjay Oilc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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