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2016 (1) TMI 355 - ITAT MUMBAI

2016 (1) TMI 355 - ITAT MUMBAI - TMI - Disallowance of non-genuine Purchases transactions from two parties - Held that:- In this case, the assessee has tried to prove the genuineness of the purchases, firstly, by producing the confirmation of the accounts from the said parties filed earlier at the stage of the assessment proceedings; secondly, all the details of payment made through account payee cheques duly debited from the account of the assessee and credited to the accounts of the suppliers .....

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77; 52,36,013/-. After verifying the contention of the assessee that, actual purchase transaction from Gausiya Sea Foods was only ₹ 16,82,212/-. Thus, the addition would be restricted on gross profit on such purchases. - Decided partly in favour of assessee - ITA No. : 2263/Mum/2013 - Dated:- 19-10-2015 - SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER For The Appellant : Appellant by : Shri Prakash Jotwani For The Respondent : Shri S K Mahapatra ORDER PER A .....

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ny has not discharged the onus to prove that the transactions with the two Parties were genuine. 2. The Learned CIT(A) has erred in not deleting the incorrect amount of Purchase made from Gausiya Sea Foods ₹ 26,85,258/- (instead of the correct amount of ₹ 16,82,685/-), and instead only directing the AO to verify the same and then to consider the amount of disallowance . 2. The brief facts qua the issue raised in the grounds of appeal are that, the assessee is engaged in the business .....

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the assessee informed the AO that, these parties might have left from the address available with the assessee. Since the assessee could not provide new address, AO held that, genuineness of the transactions carried out with these two parties are not genuine transaction and accordingly, he added the entire sum of purchases shown by the assessee from these two parties totaling to ₹ 62,39,059/-. 3. Before the CIT(A), the assessee submitted that it was engaged in the business of Fishery Produ .....

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ny relating to the supplier. The Copy of purchase document are prepared by the company itself on the basis of agreed quantity of goods supplied and duly accepted by the suppliers, a copy of which is given to them for their record. The assessee in the case of M/s Om Sai Fisheries from whom purchases of ₹ 35,50,801/- was made, the assessee submitted purchase voucher and confirmation from the party, which was submitted before the AO only. All the payments were made to the party through accoun .....

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ty and also the evidence showing that the payments were made through cheques and bank statement of the assessee was also submitted. Thus, the genuineness of the transaction from both the parties cannot be doubted. However, the Ld. CIT(A) upheld the order of the AO and held that payment by cheque itself does not prove that the purchase transaction is genuine. The onus was upon the assessee to provide correct addresses, therefore, in absence of any corroborative independent evidence, the addition .....

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ted from the assessee s bank account. The assessee had made total purchases of ₹ 3.32 crores for which most of the evidences were given. Looking to the nature of assessee s business and the purchases made from unorganized sectors, it is very difficult to give the addresses of suppliers, as in most of the cases, such addresses are not permanent and even the fish supply from such suppliers are also not permanent. Further, the sales of the assessee have been accepted and the overall profit is .....

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that the onus lied heavily upon the assessee to show that purchases made by the assessee are genuine and in absence of any cross verification, such a transaction of purchase cannot be said to be a genuine, especially in wake of enquiry by the AO u/s 133(6). 6. We have heard the rival contentions, perused the relevant finding given in the impugned order and material placed before us. The assessee is engaged in the business of trading in Fisheries Products which included export and local sales. Th .....

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could not provide the new address to the AO. From the perusal of the entire material placed on record, we find that the assessee has made purchases of ₹ 2 lakhs and more from more than 38 parties, none other purchases have been doubted except for these two. All the transactions of the purchases made by the assessee including the impugned two purchases are through account payee cheques and duly supported by bills and vouchers . This fact alone goes to show that source of purchases are from .....

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tside the books of account from undisclosed sources. Once it is not doubted that purchases have been made through account payee cheques from the disclosed sources in the books of accounts then such purchases cannot be treated as non-genuine or added as a whole as unexplained income or expenditure. At the most if the AO had some doubt about the genuineness of the purchases in such kind of cases, then recourse could have been taken to reject the books of accounts and apply some GP rate on such pur .....

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