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2016 (11) TMI 539 - RAJASTHAN HIGH COURT

2016 (11) TMI 539 - RAJASTHAN HIGH COURT - TMI - Bogus purchases - whether the purchases which has been done from Vinayak Overseas is genuine or not? - Held that:- AO as already considered by the CIT (A) has confirmed the finding and Vinayak Overseas has specifically contended that they were not transfer by Vinayak Overseas and they were absconding. The Tribunal only on the statement of M.P. Sharma who was power of attorney holder of Vinayak Overseas has given the finding. In our view, the findi .....

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been arrived by the Tribunal is not in consonance with the provisions of law - Decided in favour of revenue - D. B. Income Tax Appeal No. 305/2008 - Dated:- 2-11-2016 - K. S. Jhaveri And Mr. Mahendra Maheshwari, JJ. Mr. Nikhil Simlote, for Mr. R.B. Mathur, for appellant None present, for respondent ORDER By The Court ( Per Hon'ble Jhaveri, J. ) 1. By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has reversed the finding of the C .....

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ks of accounts when the same were rejected rejected by invoking provisions of section 145(3) of the Act as the assessee was unable to explain the purchases and the day to day quantitative tally of goods consumed was also not maintained? 3) Whether the ITAT was justified in upholding the action of CIT (A) in directing to adjust the MAT credit before charging the interest u/s 234B and 234C of the IT Act?" 3. The brief facts of the case are that the assessee firm is engaged in the business of .....

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the AO has recorded Statements of concerned parties were established to be bogus after making in depth enquiries by the AO. During the course of assessment proceeding it has been gathered that the assessee has failed to produce the owners of the two concerns. The reasons like non- availability of the said two suppliers at the given addresses, non production of two suppliers by the assessee in spite of various opportunities granted, statement of Sh. Mohan Prakash Sharma Power of Attorney holder o .....

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Vs. Commissioner of Income Tax, Special Leave to Appeal (C) No.8956/2015 decided on 06.04.2015 whereby the Supreme Court has dismissed the SLP and confirmed the order dated 09.12.2014 passed by the Gujarat High Court and other decisions of the High Court of Gujarat in the case of Sanjay Oilcake Industries Vs. Commissioner of Income Tax (2009) 316 ITR 274 (Guj) and N.K. Industries Ltd. Vs. Dy. C.I.T., Tax Appeal No.240/2003 decided on 20.06.2016. He has also relied upon Commissioner of Income Ta .....

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was produced before the Commissioner of Income-tax (Appeals). Enquiries were conducted through the inspector on different dates and it was found that either the files do not exist as per details given by the assessee or the records do not tally with the facts mentioned by the assessee, except in two cases where the records were available in respect of Moolchand Chhabra and Somani Supply Syndicate Company and in all other cases creditors were not even found at the addresses given by the appellan .....

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ansactions. In our view, on the facts of this case, the Tribunal did not take into account all these ingredients which have to be satisfied by the assessee. Mere furnishing of the particulars is not enough. The enquiry of the Income-tax Officer revealed that either the assessee was not traceable or there was no such file and, accordingly, the first ingredient as to the identity of the creditors had not been established. If the identity of the creditors had not been established, consequently the .....

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ty of the creditors and their creditworthiness. Mere payment by account payee cheque is not sacrosanct nor can it make a non-genuine transaction genuine. In that view of the matter, the question before us is answered in the negative and in favour of the Revenue." 5. He further relied upon the decision of this Court in Arvind Gupta Vs. Commissioner of Income Tax, in DB Income Tax Appeal No. 129/2015 decided on 6th May, 2016 wherein paragraph 22 and 23 read as under: 22. In the case of Commis .....

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e of the said alleged creditors to find out whether they were credit worthy or were such who could advance the alleged loan, there was no averment to pursue the socalled alleged creditors and on such finding, it came to the opinion that the assessee has discharged the burden and found no question of law to be involved. However, the facts in the instant case are entirely distinguishable in as much as at the instance of the assessee, notices were issued under Section 131 and the notices came back .....

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t on record that either the parties are not existing on the given addresses or if found, they denied of actual purchase or sale of the precious stone and jewellery and accommodated the assessee's but had obtained a paper bill without effecting actual purchases. Thus the judgment in the case of Commissioner of Income Tax, Orissa Vs. Orissa Corporation (P) Ltd. (supra) is inapplicable. 23. The other two judgments relied upon by counsel for the appellant in the case of Commissioner of Income-Ta .....

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nt and as discussed 15 hereinbefore. Thus these judgments are distinguishable." 5.1 He also relied on Commissioner Of Income-Tax vs M/S. La Medica, Delhi, 250 ITR 575 wherein it has been held as under:- "The fact that the alleged sellers have been found to be persons with no means to effect purchases or to carry on business is a factor which does not appear to have been considered by the Tribunal in its proper perspective. Materials on record clearly establish that Chedi Lal was a pett .....

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re withdrawn. If the purchases were really effected from M/s Kalpana Enterprises it is not understood as to how some other person namely Inder Sain Jain (HUF) accepted that the materials were supplied by it. The question before the Tribunal was not whether purchases were made from another concern. What was under consideration was whether the purchases were made from M/s Kalpana Enterprises as was claimed by the assessed. Ample material has been brought on record by the Revenue to show that the p .....

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ed that the supplies were not made by Kalpana Enterprises to whom payments were alleged to have been made, the question whether the purchases were made from some other source ougth not to have weighed with the Tribunal as a factor in favor of the assessed. The conclusions of the Tribunal are, therefore, clearly erroneous, contrary to materials on record and have been arrived at without taking into consideration relevant material and placing reliance on irrelevant materials. It is to be noted tha .....

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