TMI Blog2016 (10) TMI 890X X X X Extracts X X X X X X X X Extracts X X X X ..... the purchases as bogus and make the addition. If the AO doubted the genuineness of this said purchases, it was incumbent upon him to cause further inquiries in the matter to ascertain the genuineness or otherwise of the transactions. Without causing any further enquires in respect of the said purchases, the AO cannot make the addition under section 69C of the Act by merely relying on information obtained from the Sales Tax Department, the statement/affidavit of a third party, Shri Rajendra Dodhiwala wherein the assessee was not named or afforded opportunity of cross examination of that person and issue of notices under section 133(6) of the Act. - Decided in favour of assessee - ITA No. 5313/Mum/2013 - - - Dated:- 5-10-2016 - Shri Jason P. Boaz, Accountant Member and Shri Sandeep Gosain , Judicial Member For The Appellant : Shri V.K. Bora For The Respondent : Shri Neelkanth Khandelwal and Ms. Bhumika Vora ORDER Per Jason P. Boaz, A.M. This appeal by Revenue is directed against the order of the CIT(A)-35, Mumbai dated 09.05.2013 for A.Y. 2010-11. 2. The facts of the case, briefly, are as under: - 2.1 The assessee, Prop. Ispat Steel Supplies eng ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorities. In this view of the matter, the AO treated the purchases made from these three parties (supra) amounting to ₹ 3,75,87,293/- as unexplained expenditure under section 69C of the Act and the assessment was accordingly concluded under section 143(3) of the Act vide order dated 28.12.2012 wherein the assessee s income was determined at ₹ 4,29,80,520/-. 3.1 Aggrieved by the order of assessment for A.Y. 2010-11 dated 28.12.2012, the assessee preferred an appeal before the CIT(A)-35, Mumbai. Before the learned CIT(A), the assessee reiterating the stand taken before the AO, and in order to prove the purchases placed before the learned CIT(A) the evidence earlier filed before the AO; such as copies of purchase bills, copies of bank statements to show that payments to these parties for the said purchases have been made by account payee cheques, copies of stock register to show that the goods were received from these parties. It was submitted that the sales effected in respect of these purchases have not been doubted or questioned by the AO and therefore the purchases made by the assessee could not be held to be bogus, as without purchases the assessee could not have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld.CIT(A) erred in relying upon judgments in the case of CIT vs. Nikunj Eximp Enterprises Pvt. Ltd. without appreciating that the facts involved in the appellant's case are different from the facts of the above case law. (iv) On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has grossly erred in not appreciating the fact that the notices under 133(6) 'Issued to the parties from whom alleged bills were received were returned undelivered by the postal authorities. (v) The appellant prays that the order of the Ld.CIT(A) on the above grounds be set aside that of the AO be restored. (vi) The appellant craves leave to amend or alter any ground or add a new ground. 4.2 The learned D.R. for Revenue was heard in support of the grounds raised (supra) submitting that since the parties could not be traced at the given address for confirmation and lorry receipts in respect of the said purchases were not produced, the genuineness of the said purchases from the three parties could not be verified. Therefore, the AO was justified in treating the said purchases as bogus. 4.3 Per contra, the learned counsel for the assessee strongly suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties did not appear before the AO, for whatever reason, the fact remains that the assessee itself had filed conformations for purchases from two of the three parties, copies of purchase bills, copies of bank account statements to show payment for the same were through banking channels, copies of stock register to show that the material from these parties had been received, etc. to establish the genuineness of these purchases. It is a fact on record that the AO has not doubted the sales effected by the assessee and therefore, it is in order to conclude that without corresponding purchases being effected, the assessee would not have made sales. 4.4.2 In our view, the AO has not brought on record any material evidence to conclusively prove that the purchases are bogus. Mere reliance by the AO on information obtained from the Sales Tax Department or the statement of a third party before the Sales Tax Department, without affording the assessee adequate opportunity to cross examine that person or the fact that these parties did not respond to notice under section 133(6) of the Act would not suffice to treat the purchases as bogus and make the addition. If the AO doubted the genuinen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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