TMI Blog2015 (7) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... encashed on behalf of the assessee. It was for the assessee to establish how the payment was made to the ultimate seller of the goods. The assessee failed to establish this fact. The learned AO has made reference to the case of M/s.A.K.Textile, where the payments were withdrawn by the proprietor named “Aaisha”. These amounts have been doubted by the AO. It was for the assessee to explain as to how the payments are genuine and they were made to the supplier. No such assertions are discernible from the reply of the assessee extracted supra. Therefore, in our opinion, the learned CIT(A) has erred in deleting the addition. We set aside order of the learned CIT(A), and restore that of AO. - Decided in favour of revenue. - ITA No.782/Ahd/2011 - - - Dated:- 17-7-2015 - Shri G.D. Agrawal and Shri Rajpal Yadav, JJ. For the Petitioner : Smt.Sonia Kumar, Sr.DR For the Respondent : Shri J.P. Shah ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: The present appeal is directed at the instance of Revenue against the order of the CIT(A)-V, Surat dated 30.11.2010 passed for the Asstt.Year 2003-04. 2. Though the Revenue has taken four grounds of appeal, but its grievance revol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re recorded. He has also mentioned that same goods are sold by the assessee and therefore, if the purchases are held to be bogus, hew the goods be sold by the assessee. We find that though the AO has reproduced the above submissions of the assessee in the assessment order, however, he has not given any comment whether the above submissions of the assessee were factually correct or not. He has made the addition on the ground that the assessee was unable to produce the seller and that the cheques were encashed by somebody else. In our opinion, the above two facts raise serious doubt about the genuineness of the purchases but the same cannot be said to be conclusive. If the seller has given cheque to somebody else for discharge of their liability and the other party has encashed the cheque, it cannot be said that the purchase by the assessee is bogus. Therefore, it is very relevant to ascertain who encashed the cheque. If the cheque is encashed by somebody else on behalf of the seller, then, the purchases would be genuine. But if the cheque is encashed by or on behalf of the assessee, then, obviously the purchases would be bogus. Similarly the actual receipt of goods is very importan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 132 and 138 are by mistake written twice which please note. Now, for the serial no. 30, 31, 49, 50, 60, 61, 71, 75, 76, 78, 90, 93, 97, 113, 114, 121, 122 and 139, you have mentioned in column Endorsed to cash which is not correct. The correct fact mentioned in the bank statement is ICLG means inward clearing . The Xerox copy of my bank statement mentioning ICLG enclose with highlighting the date, description. Ins. No. Debit Amount etc. My bank account is with Central Bank of India, Kanpith, M. G. Road, Surat. Current A/c. CAGEN 12281 enclosed for your verification. Your serial no. 146 and 147 show that I have withdrawn cash from the bank account for my business expenses. While sr. no. 5, ₹ 50,140/- and no. 6, ₹ 52,451/- cash payment made towards purchases totaling to ₹ 1,02,591/-, out of which to the extent of 20% of such amount of ₹ 20,518/- can be disallowed. 6. According to the learned AO, the assessee failed to establish corelation between purchases made by him vis- -vis the exact payment made to his seller. The learned AO did not dispute with regard to the sales made by the assessee. Also did not dispute with regard to the total st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the assessee submitted that the accounts of the assessee are duly audited. The date-wise stock register was maintained, and report is available at page nos.19 to 36 of the paper book. He also contended that the AO did not dispute with regard to the quantitative details. He accepted the sales made by the assessee. If that be so, then, it would indicate that the assessee must have made purchases, otherwise, it will not be possible for the assessee to make sales. Therefore, the learned AO ought to have not made any addition. 10. We have duly considered rival contentions and gone through the records carefully. The facts are not as simple as propounded by the learned senior counsel. Had it been so, then, there would not have any dispute. The question is not of the quantitative details, because, the AO is also recognizing the purchases made by the assessee. That is the reason he has disallowed 25% of the purchase price. Otherwise, he would have disallowed 100% of the claim made by the assessee. The question is that the assessee has produced purchase bills from a concern, namely, A , but procured the goods from another concern, namely, B . How to verify the genuineness o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r proprietary concern of the assessee; for instance, cheque issued in favour of M/s. A. K. Textile is withdrawn by the proprietor of A. K. Textile named Aaisha , vide cheque number 446893 dated 03/06/2002, drawn on Central Bank of Surat. In the same pattern, other cheque, dated 04.06.2002, cheque no.446894, in the name of A. K. Textile in which proprietor's name is shown as Mr. Feroz. Here, it is disbelieved that proprietor had utilised his account through A. K. Textile. The same pattern is repeated, the assessee had withdrawn an amount of ₹ 50,027/-, vide cheque no. 446892 issued in favour of Anukul Textile and the same is withdrawn by him on the same dated, vide token no. 3549. It is pertinent to mention that the above cheques are in serial numbers i.e. 446892, 446893, 446894. As habitual the same theory is repeated and the cheque no. 446895 issued in the name of Tex trade was withdrawn by the assessee, by token no. 3436, an amount of ₹ 51,755/- and cheque no.446869 was issued in favour of self. However, on the deep scrutiny, it was found that the same amount of ₹ 20,000/- was credited in the name of M/s. Palak Fashion in the books of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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