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The Dy. Commissioner of Income Tax, Circle-22 (1) Versus Shri Ashish S. Jobanputra

2015 (10) TMI 2504 - ITAT MUMBAI

Bogus purchases - Held that:- We find that the FAA had,during the appellate proceedings directed the assessee to file various details with regard to the discrepancies highlighted by the AO in his assessment order, that after obtaining the reconciliation statement she had given a categorical finding of fact that in case of 44 parties the amount claimed as purchases made of raw cotton remained outstanding as on 31.3.2009,that in case of remaining purchases the assessee had produced necessary docum .....

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rned,we are of the opinion that her order does not suffer from any legal infirmity especially after the reconciliation statement was filed by the assessee before her. - Decided against revenue - ITA No. 2566/Mum/2013 - Dated:- 14-10-2015 - S/Sh. Rajendra, Accountant Member & Sanjay Garg, Judicial Member For the Appellant: Shri Devendra Jain For the Respondent: Shri Raghuveer Madnappa PER RAJENDRA, AM Challenging the orders dt.24.01.2013 of CIT(A) .....

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The appellant craves to leave amend or alter any ground or add any new ground, if necessary. Assessee,an individual,engaged in the business of cotton trading,filed his return of income on 30.09.2009,declaring total income of ₹ 50.52 lakhs. The AO completed the assessment u/s.143(3) of the Act, on 21.12.2011,determining the income of the assessee at ₹ 4,68, 38, 180/-. 2.Effective ground of appeal is about restricting the disallowance to ₹ 1,05,43,677/-,as .....

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he goods.As per the AO, the assessee merely submitted the accounts of the parties, that in some cases it did not file full addresses of the parties from whom he had purchased goods. He directed the assessee to substantiate his claim by furnishing details of the parties along with documentary evidences and to show that all the purchases were covered under the provisions of Rule 6DD(e)(i).After considering the reply of the assessee,the AO held that he had not produced the corroborative documents t .....

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unt of ₹ 3.95 crores represented unexplained credit that was not verifiable.He added the said amount to the total income of the assessee u/s.68 of the Act. 3. Aggrieved by the order of the AO,the assessee preferred an appeal before the First Appellate Authority (FAA).Before him it was contented that during the year under appeal the assessee started trading in Kapas,that the farmers would accept payment in cash only,that he had produced the accounts,that all the corresponding sal .....

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Deliberating upon it the FAA held that the assessee had not shown trading in almonds and cotton seeds in the return of income,that the auditor had mentioned the fact about it in his report,that the assessee had claimed that he had gone into ginning and processing business,that the claim made by him did not much substance,that there was no documentary evidence to support the claim.He directed the assessee to file details of location of the factory.But,no details were made available by the him to .....

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ame during the year and mode their of and balance outstanding on 31.03.2009. After considering the submissions of the assessee and the assessment order,the FAA held that in case of 44 parties the amount claimed as purchases remained outstanding, that the assessee was specifically directed to support his claim about those purchases, that the assessee had claimed that the sellers were farmers,that he did not produce certified extracts of 7/12,that he had produced such extracts in 16 cas .....

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not certified, same were liable to be rejected, that the assessee had failed to support his plea that goods had been purchased from persons who were farmers and grew raw cotton in their fields, that he had given logic for not maintaining proper documents and details for raw cotton purchased from those persons, that he had not explained the reasons for maintaining the documents, that without the documents the amounts outstanding in the books of account could not be verified, that the assessee hi .....

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of ₹ 3.95 crores. 4. During the course of hearing before us the ,Authorised Representative (AR) stated that the assessee has produced quantitative reconciliation of goods purchased processed and sold before the FAA alongwith the alonwith stock movement of URD purchases, that proof of sale of raw cotton and processed are also furnished besides the 7/12 extracts of the farmers, that FAA had accepted the purchases with regard to ₹ 2.90 crores,that she had restricted the disa .....

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ld be 7.42%.Departmental Representative (DR) supported the order of the AO. 5.We have heard the rival submissions and perused the material before us.We find that the FAA had,during the appellate proceedings directed the assessee to file various details with regard to the discrepancies highlighted by the AO in his assessment order, that after obtaining the reconciliation statement she had given a categorical finding of fact that in case of 44 parties the amount claimed as purchases mad .....

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oved the purchases to the tune of ₹ 1.05 crores and she had confirmed the addition.As far as the remaining addition is concerned,we are of the opinion that her order does not suffer from any legal infirmity especially after the reconciliation statement was filed by the assessee before her.Here we would like to refer to the case of Nikunj Exim Enter - prises(P)Ltd.(supra) of the Hon ble Bombay High Court wherein the court has held as under :- We have considered the submission on .....

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