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2017 (2) TMI 541

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..... case the statements were about providing accommodation entry in general, in our opinion, the issue should have been investigated further. The assessee had produced documentary evidences including the proof of payment through banking channel. We further find that the AO has not mentioned in his order as to what documents were produced before him-though he stated that same are being reject - ed. Without giving the details of the documents and reasons for rejecting the same is arbitrary use of the powers. The information received from the STD was a good starting point for making further investigation. But same had to be taken to the logical end the documents produced by the assessee had to be rebutted. - Decided against revenue - I. T. A. /40 .....

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..... er the AO, the assessee failed to produce the parties for verification of the genuineness of the purchases shown. He held that purchases made by the assessee were not verifiable by supporting evidences, that the suppliers had agreed before the STD that they provided bogus bills to the assessee, that the submissions made by it had to be rejected. Finally, he made an addition of ₹ 74. 28 lakhs to the total income of the assessee. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority(FAA). Before him, it made elaborate submissions and stated that it had actually purchased the goods from the suppliers and had used them in carrying out its business, that it had filed all the necessary .....

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..... opportunity to the assessee to cross-examine those two parties, that he was also bound to allow access to the statements of the suppliers, that the assessment order was silent on that matter, that the documentation produced by the assessee were specific, that documents were produced before him also during the appellate proceedings, that the AO had failed to take into account any of these documents, that he had confronted the assessee only by way of seeking the presence of the suppliers without supplying it the copy of their statements, that in the remand report the AO has not dealt with the basic issue, that the payments were through banking channels by way of crossed -cheques, that the transactions entered into by the assessee could not be .....

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..... onsidered by the AO during the assessment proceedings, that nonproduction of the suppliers of the goods and their statements were the basis for making the additions, that the FAA called for a remand report, that in the report the AO did not comment upon the statements of the suppliers, that the assessee was not given any opportunity to cross examine the parties who had supplied the goods to it, that the AO had not rejected the books of accounts of the assessee, that he had accepted the sales made by it. The FAA has mentioned that the AO did not comment upon as to whether the suppliers had implicated the assessee specifically or the statements were general in nature. In case the statements were about providing accommodation entry in general, .....

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..... ceived by the assessee was forming part of closing stock. As far as the case of Western Extrusion Industries. (supra)is concerned, we find that in that matter cash was immediately withdrawn by the supplier and there was no evidence of movement of goods. But, in the case before us, there is nothing, in the order of the AO, about the cash trail. Secondly, proof of movement of goods is not in doubt. Thererfore, considering the peculiar facts and circumstances of the case under appeal, we are of the opinion that the order of the FAA does not suffer from any legal infirmity and there are not sufficient evidence on file to endorse the view taken by the AO. So, confirming the order of the FAA, we decide ground no. 1 against the AO. In all the .....

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