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2015 (6) TMI 144 - DELHI HIGH COURT

2015 (6) TMI 144 - DELHI HIGH COURT - TMI - Genuineness of the purchases made - CIT(A) deleted the addition as confirmed by ITAT - Held that:- The CIT (A) had in the course of its order not only permitted additional evidence but also called for a remand report. The remand report comprised of various materials including the PAN Number, TIN Number and assessment orders secured from the sales tax authorities. The genuineness of the underlined transactions claimed by the assessee on having purchas .....

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s aggrieved by an order of the Income Tax Appellate Tribunal ( ITAT ) passed in ITA No.1466/Del/2011 and 1582/Del/2011 dated 21.11.2014. It is urged that the ITAT fell into error in not disturbing the CIT (A)'s findings with respect to the genuineness of the purchases made in the course of the business by the assessee for AY 2007-08. 2. The assessee used to deal with electronic articles. In the normal course of its business it used to procure unbranded electronic items and sell them. In the .....

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regard. In the appeal, the CIT (A) permitted the assessee to file voluminous records for the first time - apparently they comprised 412 pages of documents and materials. Subsequently, the matter was remanded and remand report was put to the parties. Based upon the rival submissions and after elaborate consideration of the circumstances, particularly those pertaining to each of the nine vendors/parties, the CIT (A) concluded as follows: - 5. Finding on Ground No.1: - I have carefully considered .....

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esses gathered from the Banks have been made to trace the 9 parties which is laudable but unfortunately there was not a single compliance from any of these 9 parties. A direct enquiry relating to the source from where these parties had made the purchases as well as their cost to them could have possible made only if these parties had appeared before the AO. At the same time it is a matter of record that all these nine parties are having TIN No. and have been assessed to Sales tax for the relevan .....

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n why these parties, who have not filed Income Tax Returns for AY 07-08, have not appeared before the Income Tax Authorities is a matter best known to them. The question however remains whether the appellant could be held accountable in as much as the entire purchases of unbranded electronic items can be termed as bogus& accordingly disallowed, as has been held by the AO, only because these parties are not appearing before the I.T. Authorities, which is after a gap of more than 2 years from .....

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from which itself the subsequent sales have been made goes on to show that it may not be appropriate to outrightly hold that the purchases are bogus merely because the parties are not traceable now. In fact any finding to this effect would also carry itself with the natural inference that the corresponding sales should also be held bogus and deleted from the turnover of the assessee. In view thereof on a totality of facts & circumstances & dispassionate weighing of the evidences the add .....

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