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TMI Blog2015 (5) TMI 1048X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant, the Ld. CIT(A) has erred in confirming the addition to the extent of 10% of disputed purchases i.e. Rs. 1, 17,624/= ( Rounded off to Rs. 1,17,620/-) out of the total addition of Rs. 11,76,242/= made by Ld. A.O. as " Unexepted/unproved" purchase/investment in Purchase as per section 69 of the Income Tax Act, 1961. 2. Your Appellant, therefore, prays that the addition of Rs. 1,17,624/- should be deleted." Whereas grounds raised by the Revenue for A.Y. 2005-06 read as under:- "The Ld.CIT(A) has erred in law as well as on fact by not sustaining addition u/s 69 after having accepted the finding in principle that the purchases were made from undisclosed/unverifiable/unidentifiable parties in the grey market by investing in cash and the purchases from the group concerns of Shri Rakesh Gupta & family were only accommodation entries and not actual purchases. 2. On the facts and In the circumstances of the case, the Ld.CIT(A) after having accepted the fact that the purchases made from 0 through Shri Rakeshkumar Gupta and his family members are bogus, erred in law in not confirming the addition at least to the extent of peak of the purchases made from such from such parties on ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, the assessee's case was reopened u/s 147 of the Act by issuing notice dated 26-2-2010 u/s 148 of the Act. The A.O., relying upon the statement of Shri Rakesh Kr. M. Gupta held that the purchases to the extent of Rs. 20,10,972/- are bogus and are merely accommodation entries, the same was added u/s 69 of the Act. The ld. CIT(A) after considering the various submissions of the assessee, as well as the details of purchases and sales held that 10% of such purchases should be added. The relevant observation and finding of ld. CIT(A) is as under:- "I have perused the assessment order, remand report, written submissions of appellant, and the facts and circumstance of the case. On plain reading of the assessment order, I find that the AO has basically relied on the statements recorded of Shri Rakeshkumar M. Gupta & others during the course of survey action u/s 133A and subsequently re-affirmed on oath u/s 131 of the Act, to make additions in hands of purchaser party i.e. the appellant in this case. The said additions are made based on documents impounded during survey proceedings to arrive at total purchases made by appellant during the year at Rs. 20,10,972/-. However, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Against this, both assessee as well as Revenue have preferred these appeals before us. 8. After considering the impugned order as well as the order of the Tribunal in other cases and the material placed on record, we find that first of all, Shri Rakesh Kumar M. Gupta has retracted his statement before the A.O. and also filed affidavit admitting that sales made to the assessee are genuine. The assessee has also produced evidences like copy of confirmed ledger account, copy of bank statement showing the payment made for the purchases and sale bills. All these documents have been placed in the paper book before us. The assessee's case had been that no adverse inference should be drawn on the basis of statement recorded without reference to the assessee. No further enquiry was carried out in the case of the assessee or Shri Rakesh Kumar M. Gupta despite the fact that statement was subsequently retracted by him. We find that exactly similar issue on similar set of facts had come up for consideration before the Tribunal in the aforesaid cases as cited by the ld. Counsel for the assessee. In the case of M/s Jitendra Harshadkumar & Company (supra), the Tribunal after recording the ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 27/4/2009 to deny the statement made during the survey under section 133A. He has further confirmed that the sales made by the assessee were effected and the consideration was received by cross order cheques. Thus it is clear that there is no material on record to say that the purchases made by the assessee from the said concern were bogus except the general statement recorded by the Department in the case of Shri Rakesh Kumar Gupta, which was later on retracted. In absence of any material brought on record against the submissions made by Shri Rakesh Kumar Gupta in his letter dated 20/12/2009 filed before the AO of the assessee the addition, if any, made in the case of the assessee will be based on presumption only and it cannot be sustained in the eyes of law. As against that assessee has submitted various evidences to show that the actual delivery of the goods was received by the assessee from the said party which has not been discarded by the AO. The addition sustained by Ld. CIT(A) is also on presumption basis. Therefore, keeping in view the facts and circumstances of the case, we are of the opinion that additions made by the AO deserves to be deleted in its entirety. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
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