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2015 (5) TMI 1048 - ITAT MUMBAI

2015 (5) TMI 1048 - ITAT MUMBAI - TMI - Addition of unexplained/unproved purchases - Held that:- 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 ba .....

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rshadkumar & Company 2013 (11) TMI 1605 - ITAT MUMBAI] - Decided in favour of assessee. - ITA 6138/M/13, ITA 7335/M/13, ITA 6139/M/13, ITA 7336/M/13, ITA 6140/M/13 & ITA 7337/M/13 - Dated:- 27-5-2015 - SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER For the Appellant by Shri Bhupendra Shah For the Respondent by : Shri Yogesh Kamat O R D E R PER BENCH : The aforesaid appeals have been filed by the assessee as well as .....

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taken up as lead appeal. 3. Grounds raised by the assessee for A.Y. 2005-06 read as under:- 1. Under the facts and the circumstances of the case of your Appellant, the Ld. CIT(A) has erred in confirming the addition to the extent of 10% of disputed purchases i.e. ₹ 1, 17,624/= ( Rounded off to ₹ 1,17,620/-) out of the total addition of ₹ 11,76,242/= made by Ld. A.O. as " Unexepted/unproved" purchase/investment in Purchase as per section 69 of th .....

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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 account of bogus purchases made in cash from the open m .....

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. Counsel for the assessee filed the following decisions:- (i) ITA No. 3141/M/12, ITA No. 3142/M/12, ITA No. 4349/M/12, ITA No. 3143/M/12, ITA No. 4350/M/12, ITA No. 3144/M/12 & 4351/M/12 order dated 13-11-2013 in the case of M/s Jitendra Harshadkumar vs. ACIT & vice versa. (ii) ITA No. 3948 to 3953/M/12, ITA No. 4012 to 4015 to 4021/M/12 order dated 01-10-2013 in the case of Pramit Textiles vs. ITO & vice versa. (iii) ITA No. 3960 to 3967/M/12, ITA N .....

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f one of the suppliers of the assessee firm Shri Rakesh Kumar M. Gupta (Proprietor of Manoj Mills) and group concerns, a survey u/s 133 A of the Act was carried out on 13/14- 2-2009. During the course of survey, in the statement recorded, Shri Rakesh Kumar M. Gupta stated that he was providing accommodation sale bill for the purchases in the name of these proprietary concerns, Shri Rakeshkumar M. Gupta, Prop. of M/s Manoj Mills, Smt. Hema R. Gupta, Prop. Of M/s Shree Ram Sales and Synthetics and .....

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otice 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 ₹ 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 .....

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uments impounded during survey proceedings to arrive at total purchases made by appellant during the year at ₹ 20,10,972/-. However, the appellant has submitted the break-up of its purchases from Gupta party (Rs. 11,76,242/- & Non- Gupta party (Rs. 11,71,970/-) aggregating to ₹ 23,48,212/-, which figure also tallies with the purchase figure shown in its P&L account. Further, the appellant has submitted ledger statement of Gupta party (M/s Astha Silk Industries) in its books s .....

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purchases, and when the sale of appellant is not disputed, the additions of entire alleged purchases is also not justified. 6.2 A logical conclusion which may be drawn in such situation is that the appellant has recorded some sales in its books of accounts which materials might have been purchased by it in grey market without bills, and to regularize such purchases in grey market, the appellant might have taken accommodation bills from the said parties for purchase of specified mater .....

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umstances of the case as a whole, I am of the considered view that the cause of justice would be met by making addition at 10% of such purchases in order to fill in the gap of difference of GP in recording the said purchases as well to plug any leakage of revenue. The AO has made additions of alleged purchases from Gupta party at ₹ 20,10,972/-, however as discussed above, the said purchases are accepted at ₹ 11,76,242/-. Hence, the additions is restricted to 10% of said purchases of .....

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it 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 .....

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e, the relevant portion of the decision of M/s Harshadkumar & Company is reproduced hereunder:- 7. We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that a similar issue involving identical facts has already been considered and decided in favour of the assessee by the Mumbai I Bench of this Tribunal in the case of Jeetendra Harshadkumar Textiles (ITA No. 771 & 2211/Mum/2011 dated 21-11-2012) vide para 8 &am .....

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M/s. Jitendra Harshad Kumar Textile Pvt. Ltd. for A.Y.2002-03 & 2007-08. As you are aware that my assessing officer had recorded alleged statement u/s. 133A and 131 of the I.T.Act. 1961 1 have been receiving witness summons from all four corners of the city on the ground that I have given accommodation bill, though I have denied the content of the statements recorded by A.O. u/s. 133A & 131 vide my letter dated 27.4.2009 and my affidavit dated 20.2.2009 submitted to ward 14(3) .....

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cross order cheque. Copy of the said ledger account is already submitted the department. 8.1 From the above letter it is clear that the same was written in response to notice issued by the AO. Not only Shri Rakesh Kumar Gupta has stated that he has retracted from the statement recorded during the survey but also filed an affidavit dated 20/2/2009 and letter dated 27/4/2009 to deny the statement made during the survey under section 133A. He has further confirmed that the sales made by .....

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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 th .....

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