TMI Blog2008 (6) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... - We are thus of the view that in absence of any positive evidence that the goods were not purchased from the four parties but from some named person or that the money paid by the assessee against the goods was ultimately returned to the assessee by the suppliers, there was no occasion before the AO to deny the claimed purchases especially when the genuineness of the export of those goods by the assessee has been accepted by the AO. The learned CIT(A) has thus rightly deleted the addition made by the AO by applying GP rate after disbelieving the genuineness of the claimed purchases made from the four parties. The first appellate order in this regard is thus upheld. The ground No. 1 is accordingly rejected. Deduction u/s. 80HHC - received delayed payment - HELD THAT:- We are of the view that there was no occasion before the learned CIT(A) to entertain those claims of deduction u/s. 80HHC which were ultimately withdrawn by the assessee before the AO and the learned CIT(A) was to restrict to the extent of remittance received within time or extended time and in the alternative to be computed on the basis of business income - We, find that the learned CIT(A) in conclusion of the is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of the assessee by applying GP rate of 35 per cent resulting into trading addition of Rs. 5,54,318. The learned CIT(A) has deleted these trading additions in view of several decisions of the Tribunal as well as of the Hon'ble Gujarat High Court referred in para No. 3.4 of the first appellate order. The learned CIT(A) has accepted the submissions made on behalf of the assessee that purchases made from the above 4 parties are genuine as all the necessary documents were furnished to the AO and the payments were made by cheques to these parties, which were duly credited in their bank accounts, hence, subsequently the assessee cannot be held responsible for conduct of the other party. It was also contended the application of GP rate of 35 per cent by the AO is without any basis. Now Revenue has questioned the action of the learned CIT(A) before the Tribunal in deleting the trading addition. 4. The learned Departmental Representative submitted that the claimed suppliers M/s M.D. Exports, Akshita Exports, Ambica Impex and Colour Gem Exports were neither found on the given addresses nor they were in the business as per the report of Inspector deputed by the AO. In the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not found on the given address due to some unknown reason, the assessee cannot be made responsible for that because assessee was having no control over them after completion of the transaction nor was it in the control of the assessee as to how they are using purchased price once the payment was made by the assessee to them against the supply of goods. The AO was also not justified in using adversely against the assessee some statements made by the persons related to some suppliers in the case of Sanjeev Prakashan Group that too without affording an opportunity to the assessee to cross-examine those persons. The learned Authorised Representative referred page Nos. 29 to 31 of the paper book i.e. copy of letter dt. 14th Nov., 2005 addressed to ITO with ING Vysya Bank certificate and statement of account, page Nos. 42 to 51 of the paper book i.e. copies of sale bills and confirmation of accounts of the suppliers M/s M.D. Exports. M/s Akshita Exports, M/s Ambica Impex and M/s Colour Gem Exports. The learned Authorised Representative submitted further that there is no evidence that money withdrawn by the supplier was ultimately returned by them to the assessee. The learned Authorise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es made from the abovementioned four parties have been exported in the same shape, size and weight duly verified by the customs authorities. Payments towards such exports have also come through proper banking channel. Copies of these documents have been placed at page Nos. 21 to 51 of the paper book. The assessee had furnished all the necessary information including name, address and telephone number of the supplier, as discussed above supported with documents which is expected from a prudent purchaser to establish the genuineness of the claimed transaction besides the payments have been made through account payee cheques and goods purchased from the above named four parties have been exported by the assessee. Under these circumstances, we are of the view that the AO was not justified in doubting the genuineness of the claimed purchases made by the assessee from the said four suppliers merely on the basis that on subsequent occasion the parties were not found on the given addresses or in some other cases some connected person to the supplier had stated that they were only issuing bills without supplying the goods or that the money paid by the assessee against the purchases was with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. The lower authorities have not doubted the remittance. Entire remittance has been received on or before the framing of the assessment order dt. 31st Jan., 2006 though belated. The AO has referred these facts only for the purpose of claim under s. 80HHC which ultimately was withdrawn by the assessee before the AO. 9. Considering the above submission in view of the orders of the lower authorities we are of the view that there was no occasion before the learned CIT(A) to entertain those claims of deduction under s. 80HHC which were ultimately withdrawn by the assessee before the AO and the learned CIT(A) was to restrict to the extent of remittance received within time or extended time and in the alternative to be computed on the basis of business income. We however, from the contents of para No. 5.3 of the first appellate order find that the learned CIT(A) in conclusion of the issue raised before him vide ground No. 5 regarding disallowance of deduction under s. 80HHC has directed the AO only to recompute the deduction under s. 80HHC on the basis of business income finally determined in view of his decision in respect of ground Nos. 1 to 4. In the ground Nos. 1 to 4 before him t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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