TMI Blog2015 (1) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... afresh in accordance with law. Decided in favour of revenue for statistical purposes. - I.T.A. No. 776/Ahd/2011 - - - Dated:- 30-12-2014 - Shri N. S. Saini And Shri Kul Bharat,JJ. For the Appellant : Shri B. Kulshrestha, Sr. DR For the Respondent : None ORDER Per Shri Kul Bharat, Judicial Member : This appeal by the Revenue is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-XVI, Ahmedabad ( CIT(A) in short) dated 10/01/2011 pertaining to Assessment Year (AY) 2007-08. The only effective ground raised by the Revenue in its appeal reads as under:- 1. The Ld.CIT(A) has erred in law and on facts in allowing relief of ₹ 2,84,01,250/- on account of bogus purchases of ₹ 2,98,96,050/- added in the assessment order. (Addition confirmed to the extent of ₹ 14,94,800/- being 5% of ₹ 298,96,050/-. On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the Assessing Officer since the assessee has failed to disclose his true income. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of the AO be restored. The appellant craves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laborate finding for not accepting the explanation of the assessee in paras-3.2 to 3.4 of his order which are reproduced as under:- 3.2. The reply filed by the assessee vide letter dtd.2.12.2009 has been considered. The claim of the assessee that no addition in respect of above referred bogus purchases introduced by the assessee in the name of the parties mentioned above should be made is not acceptable because of following reasons:- (i) It is well settled law that onus lies on the assessee to prove the genuineness of any expenditure which is claimed as deduction in computing its taxable income. Therefore, the onus in the instant case squarely lies on the assessee to prove the genuineness of the purchases of the of the above referred parties as he has claimed deduction in respect of the expenditure, being the purchases claimed to have been made from these parties. Till date the assessee has not produced (except copies of account of these parties) any evidence in support of his claim that he has actually made above referred purchases from these parties. In spite of having been specifically requested to produce the original sale invoices claimed to have been issued by these pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the claim of the assessee for deduction in respect of the above referred purchases claimed to have been made from these parties, cannot be allowed. (iv) The assessee has further argued in his submission that as the sales of the assessee are being treated as genuine, therefore, all the purchases shown by the assessee in his books of accounts should also been treated as genuine and deduction in respect of all such purchases should be allowed, even if these purchases are proved to be bogus. This argument of the assessee is not acceptable, because as discussed earlier, it is a well settled law that onus lies on the assessee to prove the genuineness of the purchases, if the assessee claims any deduction in respect of such purchases. In the case under consideration, as the assessee has not been able to prove that the assessee has actually made above referred purchases from the parties mentioned above, the claim of the assessee for deduction of these purchases cannot be allowed merely because the assessee has made sales. It is incumbent on the assessee to prove that suppliers were genuine suppliers of these goods and they really supplied these goods to the assessee and the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 provides that notwithstanding any thing contained in any other provision of the I.T. Act, no deduction under any head of income shall be allowed in respect of any expenditure for which no explanation about the source of such expenditure is offered by the assessee or in the opinion of the A.O. the explanation offered is not satisfactory. In the case under consideration, as the assessee has not been able to furnish any explanation about the source of any unaccounted purchases or source of payment of such purchases, therefore, the argument of the assessee that he should be allowed deduction in respect of unaccounted purchases that he must have made, to sale the goods, cannot be accepted. (viii) I have perused all the decisions of various High Courts Tribunals cited by the assessee in his submission. None of the decision says that deduction in respect of any expenditure can be allowed to the assessee even if the assessee fails to prove genuineness of such expenditure. In the case under consideration as the assessee has failed to prove that he has made above referred purchases from the parties mentioned above, therefore, the claim of the assessee cannot be allowed. Under the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal had no material to come to the conclusion that the sum of ₹ 3,82,750 could not be treated as the assessee' s income from undisclosed sources. The Hon'ble ITAT Ahmedabad 'C' Bench in ITA No.1262/Ahd/2002 A.Y. 1994-95 vide order dt.30.4.2003, in the case of SWETAMBER STEEL LTD. Vs. ITO WARD 4(3), BARODA, following the decision of Hon'ble Delhi High Court in the case of CIT Vs. La Medica 250 ITR 575 has upheld the order of the AO and CIT(A), disallowing the whole of the claim of the assessee of bogus purchases. The matter was decided by the Tribunal against the assessee in view of the observations of their lordships of Delhi High Court in the above referred case. Appeal against this order of the ITAT was not admitted by the Hon'ble High Court as well as the assessee lost it before the Hon'ble Supreme Court. Non admission of appeal u/s.260A by the Hon'ble High Court on the ground that no substantial question of law arise from the order of the Tribunal is held by the Hon'ble Supreme Court in Nirma Industries Ltd. Vs. DCIT (283 ITR 402), to be the confirmation of the Tribunal order and its merger in the Hon'ble High Court order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.5,64,246/- M/s. Navrang Corporation. Sr. No. Date Item Amount (Rs.) 1. 08.09.2006 12,45,754/- TOTAL Rs.14,45,754/- 3.4. The claim of the assessee for deduction of ₹ 2,98,96,050/- (Rs.1,14,37,738/- + ₹ 1,48,39,552/- + ₹ 10,35,0007- + ₹ 7,73,760/- + ₹ 5,64,246/- + ₹ 12,45,754/-) being bogus purchases introduced in the name of above referred parties is disallowed and added back to the income of the assessee. The claim of the assessee for deduction of ₹ 2,98,96,050/- is also disallowable u/s.40A(3) as the payment against these bogus purchases have been made otherwise than by an account payee cheque drawn on a bank or account payee bank draft. Penalty proceedings u/s.271 (1) (c) have already been initiated for filing inaccurate particulars of income thereby concealing the income of ₹ 2,98,96,050/-. 6.1. However, the ld.CIT(A) accepted that the purchases were not made from the concerned parties, but proceeded to restrict the disallowance to the e ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
