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2011 (1) TMI 1490 - ITAT DELHI

2011 (1) TMI 1490 - ITAT DELHI - tmi - ITA No. 1321(Del)/2009 - Dated:- 14-1-2011 - SHRI A.D. JAIN AND SHRI K.G.BANSAL Appellant by : Shri Rajiv Saxena, Advocate & Shri Jagjeet Singh, Advocate Respondent by : Shri Amarendra Kumar, Sr. DR ORDER PER K.G. BANSAL : AM This appeal emanates from the order of the Commissioner of Incometax (Appeals)-XXI, New Delhi, dated 29.12.2008 in appeal no. 184/07- 08 pertaining to assessment year 1995-96. The corresponding assessment order was framed by the In .....

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total income because of the aforesaid addition. 1.1 It may be mentioned here that the appeal of the assessee was dismissed for non-prosecution on 19.10.2009. On an application made by the assessee, this order was recalled on 13.8.2010 with a view to decide the same on merits. 2. Before us, the ld. counsel for the assessee submitted that the matter has come up before the Tribunal for the second time. In the first order dated 28.7.2006, the matter was restored to the file of the AO with a directio .....

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lls of purchase had been filed and no evidence was brought on record by the AO to prove non-genuineness of the bills. The bills contained the sales-tax number of M/s Unifoil Enterprises. It was also submitted that if purchases are treated as bogus, then the assessee would be entitled to higher deduction u/s 80HHC. As mentioned earlier, after considering the aforesaid submissions, the Tribunal restored the matter to the file of the AO for re-framing the assessment. Paragraph no. 10 of that order .....

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by the assessing officer to M/s Unifoil Enterprises Ltd. none appeared and only a letter was filed by them mentioning that no sales was made by them to the assessee. In the circumstances, if the purchase bills are with the assessee in support of their claim then merely this letter of M/s Unifoil Enterprises Ltd. cannot be taken as sacrosanct. We find that none of the lower authorities have verified the facts. In the circumstances in our considered opinion, the issue cannot be decided without ma .....

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tter to M/s Unifoil Enterprises requesting it inter-alia to submit a confirmed copy of the account of the assessee in its books. It was requested that such a copy may be sent to the assessee or to the AO. However, the creditor did not respond to this letter. Therefore, the outstanding credit of ₹ 16,15,000/- was written off in the books of account in the year ended on 31.3.2007. It will be appropriate at this place to reproduce the contents of the letter written by the assessee to the cred .....

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by the assessing officer i.e., Income-tax Officer, Ward 18(1), New Delhi through the summons dated 15.1.1998 duly received by you on 22.1.1998. We were informed that you have denied about selling the goods to us during the period 1.4.1994 to 31.3.1995 i.e., assessment year 1995-96. The denial was made by you vide letter dated 23.1.1998 which was duly been received vide receipt no. 573 on 2nd Feb., 1998 in the Income-tax office. It is submitted that your denial about the sale of goods clearly gi .....

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ich may also be directly sent to the Assessing Officer mentioned above. In case we do not receive any reply we will presume that you are not interested in getting the payment of ₹ 66,15,000/- and we will also delete the liability standing in our books of accounts. 2.2 The Income Tax office at Mumbai made enquiries with M/s Unifoil Enterprises and statement of Shri Prafful Parikh, the proprietor of M/s Unifoil Enterprises, was recorded. He also denied having made the sale to the assessee. 2 .....

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brought into India by way of foreign currency and, therefore, purchase of material cannot be denied. The ld. CIT(A) did not agree with this contention and mentioned that the enquiries conducted by the DRI show that the goods valued at ₹ 81.00 lakhs had the actual value of only ₹ 40,581/-, which makes it clear that the assessee is engaged in over-invoicing of goods with a view to defraud the revenue. M/s Unifoil Enterprises has also denied sales having been made to the assessee. Acco .....

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ity to cross-examine the witness is required to be given to the assessee. The assessee had written a letter to M/s Unifoil Enterprises, which has not been responded to although it has been pointed out to it that if the reply is not received within 10 days, the liability will be deleted from the books of the assessee. Reliance has also been placed on submissions made before the AO in letter dated 27.12.2007, in which it is inter-alia mentioned that the Income Tax office at Mumbai has made enquiri .....

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credit has been included in the income in the assessment order of that year. A copy of the assessment order is placed in paper book on page nos. 45 and 46. The order shows that the assessee had filed nil return and was assessed as such u/s 143(3). The assessment order specifically shows that liability of ₹ 66,15,000/- in respect of M/s Unifoil Enterprises was written off and in this connection it is mentioned that the matter is pending before the Tribunal in proceedings for assessment yea .....

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assessment year 2007-08 after a long lapse of time. It is further submitted that the assessee should have substantiated its purchases as the amount was claimed as deduction in computing the total income. It was requested that if there is any deficiency by way of not granting the opportunity of cross-examination, the same may be done now by obtaining remand report from the AO. 4. In the rejoinder, the ld. DR submitted that 15 years have passed since the transaction took place. No useful purpose w .....

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e creditor informed that it has not made any sale to the assessee. Therefore, the amount was added to the total income of the assessee. As mentioned earlier, the matter was restored to the file of the AO for de-novo examination and assessment. In particular, it was mentioned that there is force in the argument of the ld. counsel that there could be no sale without the purchase. The assessee had produced the purchase bills and, therefore, a mere letter from the creditor cannot be taken as sacrosa .....

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1994 to 31.3.1995. It was deposed that the answer had already been given in letter dated 23.1.1998. It was reiterated again that no sale had been made to the assessee. On the basis of these facts, the AO concluded that the assessee did not make any purchase from M/s Unifoil Enterprises but made purchases from some other party, to whom the payment was made in cash. Therefore, the addition was made in respect of unexplained cash u/s 69. The ld. CIT(A) modified the findings of the AO. It was mentio .....

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e an opportunity to cross-examine its witness. The assessee has produced the bills and discharged its onus. The sale by way of export leads to inference that purchases were made. On nonconfirmation of the account, the liability has been written off in the assessment year 2007-08. On the other hand, the case of the ld. DR is that the assessee should have substantiated the purchases on its own in view of the statement of the proprietor of M/s Unifoil Enterprises. The huge amount remained unpaid fo .....

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