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TMI Blog2010 (12) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... poration in existence at the addresses given by the assessee from whom the assessee claimed to have purchased the material. (iii) On the facts and circumstances of the case and in law, the ld.CIT(A) erred in appreciating the fact that the assessee has deliberately claimed purchases expenses in the name of the two above said firms and thereby reduced its profit to defraud the revenue of its due taxes." 3. At the time of hearing before us, it stated by the learned DR that the assessee derives income from trading of iron and steel. During the course of assessment proceedings, the Assessing Officer found that purchases from the following two parties were bogus: i) Anant Corporation Rs. 27,74,384/- ii) Kunal Corporation Rs. 21,97,448/- Rs. 49,71,832/- That the Assessing Officer who is at Baroda took help of the DDIT (Investigation), Ahmedabad for making inquiry into the genuineness of the purchases claimed to have been made from the above two parties because both parties are from Ahmedabad. On investigation by the DDIT(Investigation) it was found that the address given by Anant Corporation was of residential premises in which Shri Madalal C. Mehta was residing there since l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her hand, relied upon the order of the learned Commissioner of Income Tax (Appeals). He stated that the assessee has maintained day-to-day quantitative records and the purchase of the goods by the assessee have been entered in the quantitative records. These goods have also been sold. Therefore, unless goods are actually received by the assessee the same cannot be sold. He also submitted that the assessee also produced evidence of the transporting of the goods along with octroi receipt paid by the assessee for entering of the goods within the territory of Baroda Municipal Corporation. Weigh-bridge receipt for the weighment of the goods received by the assessee was also produced. These evidences proved beyond doubt that the goods were actually purchased by the assessee. That, merely because the seller is not available at the given address or has denied to have sold goods to the assessee, the assessee cannot be held responsible when the assessee has already proved the receipt of the goods by it. He fairly admitted that the facts of the case of the assessee were similar to Vijay Proteins. However, he has stated that in the subsequent decision on those facts, the ITAT sustained nomina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Unit-II(2), Ahd. on I5.12.2006 and submitted a letter dtd. 13.12.2006. Further Shri Pravinbhai Patel's statement was recorded u/s.131 of the I.T. Act. Following is the brief summary of the facts emerged from the letter dtd. 13.12.2006, the statement recorded on I5.12.06 and the report of the inspectors of office of DD1T,Unit-II(2), Ahd. * Kunal is the name of the son of Shri Pravin Baldevbhai Patel. He was a resident of 24, Yashbhoomi Apartments, Opp. Ghaver Complex, Shahibaug in the years 2003 & 2004. * In the letter dtd. 13.I2.2006 and also in the statement u/s. I3I of the I.T. Act dtd.15.I2.2006, it has been stated by Shri Pravin B. Patel that on account of financial distress, he has accepted a proposal by one Shri Kamlesh Dalal having his office at 6th Floor, Loha Bhavan, Opp. High Court, Navrangpura, Ahmedabad. * The offer was to sign papers and bills for Kunal Corporation as and when required for a monthly sum of Rs. 4000/- to Rs. 5000/-. It was accepted that Shri Pravin B. Patel carried on with it for more than one year between the F.Ys. 2003-04 & 2004-05. * But no actual trading of any item was carried out by him. * Other than this, no activity, as is being claime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke any effort to controvert the finding recorded by the DDIT (Investigation) and it made no efforts to produce the seller parties on the other hand it claimed that it is not his responsibility to produce the seller. It is a settled law that onus is on the assessee to establish the genuineness of the purchase. The assessee has produced various evidence with regard to the receipt of the goods by it, i.e. stock register, receipt of weigh-bridge for weighment of goods purchased by the assessee, octroi receipt for the payment of octroi duty etc. After considering the entire material, we are of the opinion that the assessee did not purchase the goods from the parties mentioned in the sales bill. At the same time, it did purchase the goods from some other suppliers, may be without bill. Therefore, purchase rate as mentioned in the alleged sales bill cannot be accepted. Any person indulging in the practice of purchasing goods from the grey market and obtaining bogus bills of some other parties, would do so for getting some benefit. But what would be the magnitude of the benefit would depend upon facts of each case. In the case of Vijay Proteins, ITAT held that such benefit to be 25% and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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