TMI Blog2012 (11) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... bogus purchases made from Shree Laxmi Industrial Corporation. - I.T.A .No.-3136/Del/2010 - - - Dated:- 30-11-2012 - I.C. SUDHIR SHAMIM YAHYA ,JJ. For The Appellant: Sh. Ved Jain Smt. Rano Jain For The Respondent: Dr. Prabha Kant ORDER: The assessee has questioned first appellate order on the following grounds :- 1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax Appeals [CIT(A)] is bad both in the eye of law and on facts. 2. (i) On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the order passed under Section 147, read with section 148, ignoring the fact that the same was bad in the eye of law as the condition and procedure prescribed under the statue have not been satisfied and complied with. (ii) On the facts and circumstances of the case, the CIT(A) has erred in rejecting the contention of the assessee that the reassessment proceedings initiated by the learned A.O are bad both in the eye of law and on facts. (iii) That the notice issued under Section 148 of the Act is bad both in the eye of the law and on facts. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 43,34,496/- made on account of books purchases from Shree Laxmi Industrial Corporation. The relevant facts are that the assessee company engaged in the business of manufacture and sales of all types of cutting tools, firm tools, automate parts, precison components had claimed to have made purchases worth ₹ 43,34,496/- from Shree Laxmi Industrial Corporation. A survey u/s 133A of the Act was conducted at premises of assessee at Faridabad on 03.01.2008 having registered office at 29/7, Shakti Nagar, Delhi. 4. The survey was in-consequence of the information received by the department regarding the bogus billing racket which was unearthed recently in Faridabad. It was found that there were a number of concerns which were doing the business of bogus billing without any actual business. During the course of survey, it was found that the assessee company had purchased bogus bills from Shree Laxmi Industrial Corporation in the financial year under consideration worth ₹ 43,34,495/. This fact was accepted by the Director of Company, Sh. D.K.Jain in his statements recorded. It was stated that cheques were issued in the name of Shree Laxmi Industrial Corporation for seek ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) stating the circumstances in which the statements were recorded, a reply from ADIT(Inv.) reasons recorded for reopening, letter filed before AO on 31.10.2008 giving comparison of GP ratio, letter dated 28.11.2008 before AO, letter dated 12.12.2008 filed before the AO with sales-tax documents of Shree Laxmi Industrial Corporation, confirmed copy of accounts in the books of Shree Laxmi Industrial Corporation and purchase bills, stock register, statements of Sh. D.K.Jain recorded on oath during the assessment proceedings, bank statement of Shree Laxmi Industrial Corporation and submission filed before the Ld. CIT(A). Ld. AR submitted further that during the year, purchases were also made from Steel Authority of India Ltd. (SAIL). All the purchases were made through cheques. The sales made have not been doubted. The assessee had also furnished sufficient evidence for the supply of goods by Shree Laxmi Industrial Corporation to the assessee. Under these circumstances, the AO without examining the documents filed by the assessee in support of the claimed purchases has simply relied on the statements of above two persons to make the addition on account of books purchases. The assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts including cash book ledger, stock registered both for raw-materials as well as for finished goods. At page No-35 has been stated that photocopy of account along with purchase vouchers were enclosed and that the payments have been made by A/c payee cheques which are verifiable from the books of accounts. At page No-38 of the paper book has been made available comparable chart of GP ratio as under :- Compared of GP Ratios Assessment Year Gross Profit G.P.Rate 2004-05 4554764.44 25.74% 2005-06 5014234.10 25.67% 2006-07 5396621.56 27.67% 8. At page Nos.-39 to 45, a copy of letter dated 28.02.2008 by the assessee to the AO has been made available. In this letter at page No-40, it was pointed out to the AO that no statement can be recorded on oath during the course of survey u/s 133A of the act and such statements has no evidentiary value. It has been further pointed out that the assessee has already retracted such statements when it was subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e genuineness of the claimed purchases made from Shree Laxmi Industrial Corporation. The onus to establish that the same were bogus was thus shifted to the department. In any case when sales declared by the assessee have not been doubted, it was not proper on the part of the AO to deny the claimed purchases on the basis of which sales were made. In such circumstances, only option if any was available with the department was to estimate the income of the assessee during the year on the basis of trading result of earlier three years, made available at page no- 38 of the paper book filed on behalf of the assessee. The same has been reproduced hereinabove in the preceding paragraph. On perusal of which we find that during the year, the assessee has shown better gross profit at a better GP rate of 27.67 % in comparison to the GP profit and GP rates of earlier two AYs. In the AY 2005-06, the assessee has shown GP rate on 25.67 % and in AY 2004-05, the GP rate shown is 25.47%. Since the assessee has shown better GP rate during the year, we find that there is no justification to make addition even on this account. We thus while setting aside the orders of the authorities below on the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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