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TMI Blog2015 (1) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... - made by AO on account of bogus purchases; 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in accepting additional evidence in contravention of Rule 46A. Without granting an opportunity to the AO" 3. Brief facts of the case are that the information was received from ITO 14(3)(2) that accommodation bills were issued by the various parties to the assessee, who was proprietor of M/s Baggit. The information stated that survey u/s 133A was conducted on 13.2.2009 in the cases of following person : i) Shri Rakeshkumar M Gupta, Propo.of M/s Manoj Mills; ii) Smt. Hema R Gupta of M/s Shree Ram Sales and Synthetics and iii) Shri Mohit R Gupta Prop. of M/s Astha Silk Industries; during which it was found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... designer ladies hand bags for which she had to purchase fabrics as main raw material. The entire purchases of Rs. 10,40,875/- was made from these two parties only, which have been used for manufacturing of bags. The manufacuring and sale has not been disputed. The AO recorded the statement of Shri Rakeshkumar M Gupta and held that the purchases shown by the assessee from these parties is bogus and accordingly he added a sum of Rs. 10,40,875/- to the total income of the assessee. 4. In the first appellate proceedings, the ld. CIT(A) required the assessee to give evidence regarding the genuineness of purchases, proof of delivery, transport receipt etc. The details of purchases, proof of delivery, transport receipt etc have been incorporated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the purpose of the manufacturing. In response the stock register was produced and was examined by the ld. CIT(A) in detail and observed that the CIT(A) has wide powers and can direct the assessee to produce any information or material for deciding the case and Rule 46A does not place any bar on the right of the assessee to produce additional evidence as directed by the First Appellate Authority. Accordingly, he held that the documents as produced before him goes to show that the assessee has actually consumed the material for the purpose of the manufacturing and without any purchase no manufacturing could have been done. Thus, he deleted the addition made by the AO. 5. Before us the ld. DR submitted that the ld. CIT(A) has violated the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cord and also gone through the impugned order. The assessee is engaged in the business of manufacturing of ladies bags/purses and for this purpose, the assessee has purchased raw material from various parties. The assessee had made aggregate purchases of Rs. 10,40,875/- from Shri Rakeshkumar M Gupta and Smt. Hema R Gupta, who were the persons in whose case survey had taken place and during the course of survey they have admitted that they were engaged in providing accommodation entries by giving bogus sale bills. Solely on this background the AO has treated the said purchases as bogus and in the nature of accommodation entry of sale bills. The ld. CIT(A) required the assessee to substantiate the purchases by proving through mode of delivery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Rule 46A as raised by the department, we are of the opinion that, if the first appellate authority in exercise of his powers has directed the assessee to produce any evidence, information or material not produced or considered by the AO, then there is no violation of Rule 46A. The Rule 46A provides that, when the assessee on its own file any additional evidence, then the ld. CIT(A) has to follow the provisions of the said Rule. There is no fetter on the powers of the first appellate authority to call for any fresh information or materials for adjudicating the lis before him. Thus, in this case, there is no violation of Rule 46A, as the additional evidences were filed on the direction of the ld. CIT(A). Accordingly, the grounds raised b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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