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2016 (7) TMI 200 - ITAT MUMBAI

2016 (7) TMI 200 - ITAT MUMBAI - TMI - Addition in respect of purchases - Held that:- On submitting documentary evidence of purchase, consumption and sale of computer components the assessee had discharged its burden of proof. The AO had not produced any evidence that could prove the non genuineness of the transaction. - Decided in favour of assessee - I. T. A. /5038/Mum/2014, - Dated:- 24-6-2016 - Shri Joginder Singh, Judicial Member And Rajendra, Accountant Member For the Revenue : Dr. Darsi S .....

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income was filed on 30. 09. 2011, declaring total income of ₹ 38, 26, 36, 760/-. The Assessing Officer (AO)completed the assessment, u/s. 143(3) of the Act, on 27. 02. 2013, determining the income of the assessee at ₹ 38. 55 Crores. 2. The effective Ground of appeal is about addition of ₹ 11, 57, 884/- made by the AO in respect of purchases. During the course of assessment proceedings, the AO sought information from suppliers u/s. 133(6) of the Act with regard to local purchas .....

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ake of entry and no material was supplied as such, that they had supplied bills on receipt of cheques and later on cash withdrawn from the banks and after deduction of agreed commission balance money was returned in the cash account. Vide order sheet entry dated 22. 1. 2013, the AO asked the assessee to explain as to why the purchase of ₹ 11. 57 lakhs made from MI should not be disallowed and added to the total income. The assessee, vide its submission, dated 31. 1. 2013, submitted that it .....

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business that when certain bogus bills were obtained journal entries would be made, that only entry in the books of accounts did not establish that actual delivery of goods had taken place, that Proprietor of MI had admitted before the sales tax authorities that he had never supplied goods, that he had issued accommodation bills only, that payments through cheques was not a conclusive evidence of purchase of goods. Finally, he held that purchases made from MI of ₹ 11. 57 lakhs were not ge .....

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rchases made, that the AO had merely relied on the information given by the sales tax department, that no independent enquiries were made by him, that the statement given by the proprietor of MI was general statement, that no specific mention of the assessee company was made in the statement, that the AO had not found any discrepancy in respect of documentary evidences filed by the assessee. 4. After considering the submission of the assessee and the assessment order, the FAA held that the asses .....

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was not in a position to supply the material to the assessee, that assessee had not produced any evidence in support of actual purchases. Finally, he held that purchases made by the assessee were not genuine. 5. During the course of hearing before us, the Authorised Representative (AR) argued that the addition was made on the basis of the statements recorded by the sales tax authorities, that in the statement the proprietor of MI did not mention the name of the assessee, that payment was made t .....

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The Departmental Representative (DR) supported the order of the AO and the FAA. 5. We have heard the rival submissions and perused the material before us. We find that the assessee had purchased goods from MI, that the sales tax department had recorded the statement of proprietor of MI, that in his statement he admitted to have issued accommodation bills, that he did not specifically mention the name of the assessee to whom accommodation bills were issued, that the copy of the statement of the .....

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t. It is also found that opportunity to cross examine him was also not provided. The GRN were the primary documentary evidencing the movement of goods. The AO had not made any enquiry with regards to that. He had not made enquiry with the bank about the allelged immediate withdrawal of the cash and the deposit in the assessee s account. The AO had not rejected the result of books of account of the assessee. In our opinion the order of the FAA can be reversed only on the basis of non observance o .....

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received from the Maharashtra Govt. was a good starting point for making further enquiries. But, the AO instead of making enquiries rejected the evidences produced by the assessee without rebutting them. We find that in the case of Rajiv G. Kalathil (supra), the issue of bogus purchases and evidentiary value of inquiry made by sales tax authority was examined. We would like to reproduce the relevant portion of the said case which reads as follows: 2. 4. We have heard the rival submissions and p .....

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