TMI Blog2013 (11) TMI 1364X X X X Extracts X X X X X X X X Extracts X X X X ..... the authenticity of the purchases - In the assessment of the main companies of the assessee where huge purchases were made, no adverse view has been taken by the Assessing Officer and by Commissioner of Income-tax (Appeal). In the present case the purchase as compared to the other group companies are negligible. It is also a fact that the existence of the vendor party which has sold the goods to the assessee company is doubtful and appeared to have been issued the accommodation entries only but this fact stands alone cannot make the purchase bogus. Relying upon the judgment in the case of DCIT vs. Global Business India Pvt. Ltd. [2013 (9) TMI 362 - ITAT DELHI] on an identical issue under almost similar facts, it is held no infirmity has been found in the order of Commissioner(A) and purchases are held to be genuine – Decided against the Revenue. - ITA No. 1370/Del/2008 - - - Dated:- 6-2-2013 - Shri I. C. Sudhir And Shri J. S. Reddy,JJ. For the Appellant : Shri Satpal Singh, Sr. DR For the Respondent : Shri Rajiv Sexena, Advocate Shri Abhishek Verma, Advocate ORDER Per I. C. Sudhir, Judicial Member The revenue has questioned first appellate order on the fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fee paid for enhancement of share capital claimed u/s 35D of the Act i.e. deduction on amortisation of certain preliminary expenses. The Hon'ble Delhi High Court in the above cited case has been pleased to hold that such expenditure is capital expenditure and deduction is not allowable u/s 35D(2)(c)(iii) of the Act. The ground is thus allowed in favour of the revenue. 4. Ground Nos. 3 4 The relevant facts are that the AO made addition of Rs. 26,20,800/- u/s 69(c) of the Act on account of bogus purchases made from M/s. Kumar Bansal Trades (P) Ltd.( in short KBTPL) . He made further addition of Rs. 1,24,643/- on account of profit earned in respect of above transaction of Rs. 26,20,800/-. On the basis of information received from the investigation wing of the department that in his statement one Shri Atul Kumar Bansal, Director of M/s. Vishal Iron Works (P) Ltd. had admitted that he was engaged in the business of providing bogus accommodation entries through many concerns controlled by him. One of such concern was M/s. Kumar Bansal Traders (P) Ltd. from whom the assessee had made the purchases of Rs. 26,20,800/-. Shri Atul Kumar Bansal in his statement also admitted that he use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making the purchases in question :- a) Procurement of goods through a courier/transport agency. b) Procuring statutory forms required for carrying the goods to the destination during movement. c) Payments made through banking channels. d) Entries in day to day stock register made of purchases. e) Tallying goods physically versus as per books. f) Submission of the purchases made to the AO of Exise Trade. 7. He submitted that the claimed purchases in question were supported by the following evidences :- i) Purchase bill ii) Stock register iii) Trading account with quantitative details iv) Copy of bank statement showing payments made to KBTPL v) ST 38 forms issued by Exise Trade Tax Office. vi) Assessment order of Exise Trade Tax Office, Rohtak admitting purchases and sales. vii) Total quantity of purchase / sale during the year viii) Cartage paid account showing the payment for these purchases. 8. The Ld. AR pointed out that during inspection it was noticed that the AO had made office note that DDIT (Investigation) Unit II (1) had noticed bogus purchases of Rs. 33.78 crores ; purchases amounting to Rs. 2.21 crores made by M/s. Surya Vinayak Indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 61 (Guj.) 5. Manoj Aggarwal vs. DCIT 113 ITD 377 (SB) 10. Considering the above submissions we find that the AO had doubted the claimed purchases made from KBTPL mainly on the basis of statements of Shri Atul Kumar Bansal, Director of M/s. Vishal Iron Works (P) Ltd. recorded by the investigation wing of the department on 30.1.2004, wherein he had admitted that KBTPL was one of such bogus concerns wherein only bills were issued and no goods were actually transferred and for this he used to charge commission @ 0.20%. The AO also doubted the claimed purchases from M/s. KBTPL as they were not found on the given address nor their existence could be established by the assessee. The Ld. CIT(A) on the other hand was convinced with the documents filed by the assessee in support of the claimed purchases and that when sales have been accepted expenditure corresponding to it is also to be accepted. It was also submitted by the assessee that it was not possible for them to ensure the presence of supplier on the given address in the coming years especially after the completion of the transaction. The Ld. CIT(A) has dealt with the issue in detail and has come to the following conclusion a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds allowed." 11. We also find that under almost similar facts and identical issue the Delhi Bench of the Tribunal in the case of DCIT vs. Global Business India Pvt. Ltd. (supra) vide its order dated 24.8.2012 has given the following finding :- 7. We have heard rival contentions and perused the material available on records. As the facts emerge the information of Investigation Wing of the department is held to be clinching evidence by the Adl. CIT whose directions were binding on the AO. In our considered view : i. An information supplied by an agency of the department cannot be held as clinching evidence without independent inquiry and corroboration. An information may be useful for further investigations or corroboration but on its own, it cannot be held as clinching evidence. ii. No light has been shed by AO as to what happened in the assessments of Shri Atul Bansal and his accommodation entities. Similarly statement of Director Shri Sanjay Jain stating the facts about verification of purchases has not been controverted. iii. Quantities of purchases and sales and value of sales has been accepted by AO, thus to this extent nothing adverse has been found in the books of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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