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TMI Blog2010 (9) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... hases from these concerns by producing both these parties along with their books of account. The assessee instead of producing the above mentioned parties, filed the bills of both the above parties containing complete address, description, quantity, rate and total amount of sales made to the assessee. The copies of bills bear RST and CST numbers and have telephone details. The confirmation of the parties bearing permanent account number was also filed along with the reply. It was further submitted that payments have been made through account payee cheques. The Assessing Officer did not accept the contention of the assessee for the reasons that issue of M/s. Manvi Exports has arisen in case of M/s. Euro Jewels, one of the sister-concerns of the assessee. In that case, the assessee failed to produce the above party. Efforts to serve the summons on this concern at the given address have failed as no one resides at the given address. The Assessing Officer also observed that a search was carried on M/s. Sanjeev Prakashan Group and thereafter detailed investigation was made by the Investigation Wing of the Department about the affairs and activities of some parties and M/s. Manvi Exports ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from M/s. Creative Gems, it was contended that the proprietor of the said concern was late Shri Shubhkaran Jain who was about 72 years old in 2001 and has died on November 29, 2004. The assessee expressed this fact before the Assessing Officer that the proprietor died in November, 2004 and the enquiry was made somewhere early in 2006. It was also contended that after the assessment proceedings the assessee has been able to lay hand on an affidavit executed by late Shri Shubhkaran Jain, son of Shri Suwalal Jain, aged 72 years, wherein he affirmed on oath that he was the proprietor of M/s. Creative Gems. This affidavit was duly attested by a notary public, dated April 4, 2001, and a copy of the same was also filed. It was also contended that there were purchases, actual delivery has taken place, the amount has been taken by account payee cheques and the entire goods so purchased from M/s. Creative Gems in the same shape and the same form without any change have been exported to the foreign consignee. Accordingly, it was submitted that there is no iota of evidence to come to the conclusion that the purchases of Rs. 55 lakhs and odd are bogus or non-genuine. With regard to purchases f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e other hand stated that there was no justification in sustaining the addition of Rs. 20 lakhs. It was further submitted that the appeal in the case of M/s. Euro Jewels has been decided by the Tribunal and while deciding the appeal, the Tribunal has held that purchases made from these two parties, i.e., M/s. Creative Gems and M/s. Manvi Exports are genuine. Attention of the Bench was drawn on copy of the order of the Tribunal placed on record. It was further submitted that the results shown by the assessee are better. Whatever purchases have been shown, they have exported in the same shape. Sales have been accepted by the Department and without purchases sales cannot be effected. If any addition can be made that can be made if the assessee has shown lower gross profit rate on account of non-verification of purchase. However, in the present case the gross profit rate shown by the assessee is better. The turnover of the assessee has increased 2.5 times. The various cases on which reliance was placed by the Assessing Officer are not applicable to the facts of the present case. It was further submitted that having placed reliance on the decision of the hon'ble Delhi High Court in CIT v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uiry made on some other cases. The assessee has filed confirmation from both the parties along with complete details of purchases mentioning description of items. Both the parties are assessed to tax and they are registered under the Sales-tax Act also. All these information were given to the Assessing Officer. However, no enquiry was made by the Assessing Officer directly. We also find in the contention of the learned authorised representative that the proprietor of M/s. Creative Gems from whom the purchases were made for Rs. 55 lakhs and odd has died sometime in the year 2004 whereas enquiries were made in the year 2006 from some other persons. Therefore, it cannot be held that any proper enquiries have been made from M/s. Creative Gems. While examining in other cases, i.e., M/s. Sanjeev Prakashan Group or in the case of M/s. Euro Jewels, however, no direct enquiry has been made in the case of the assessee. Therefore, in our considered view, there was no cogent reason to attract the provisions of section 145(3) and hold that the purchases shown by the assessee are bogus. Undisputedly, the trading results shown by the assessee are better as in the immediately preceding year the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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