TMI Blog2012 (2) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... to have deleted entire additions on account of purchases from Rohit Panwala group though cross-examination was given only of Rohit Panwala and no other associate concerns. The assessee in the assessment year 2002-03 has raised the following ground of appeal:- ITA No.3590/Ahd/2008 (by assessee) 1) The learned CIT(A) grossly erred in confirming 25% of the alleged non-genuine purchases for ₹ 43,300/- from various concerns of Rohit Panwala group. 2) The learned CIT(A) ought to have deleted entire additions on account of purchases from Rohit Panwala group though cross-examination was given only of Rohit Panwala and no other associate concerns. The assessee in the assessment year 2003-04 has raised the following ground of appeal:- 1) The learned CIT(A) grossly erred in confirming 25% of the alleged non-genuine purchases for ₹ 9,38,650/- from various concerns of Rohit Panwala group. 2) The learned CIT(A) ought to have deleted entire additions on account of purchases from Rohit Panwala group though cross-examination was given only of Rohit Panwala and no other associate concerns. The Revenue in assessment year 2001-02 has raised the following grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon ble ITAT in the case of M/s Vijay Proteins Ltd., referred to by him, is not applicable to the case of the assessee. The Revenue in assessment year 2003-04 has raised the following grounds of appeal:- ITA No.147/Ahd/2009(by the Revenue) [1] On the facts and in the circumstances of the case and in law, the learned CIT(A), Surat has erred in restricting the addition made by the A.O of ₹ 84,50,070/-, ₹ 40,300/- and ₹ 9,38,650/- to ₹ 21,12,517/-, ₹ 10,075/- and ₹ 2,34,662/- for Asst. Year 2001-02, 2002-03 and 2003-04 respectively, ignoring the fact that in the case of M/s. Vijay Proteins Ltd., the Hon ble ITAT has held that the entire purchase can be disallowed only if the purchases are proved to be bogus and in the case where the so called sellers are not verifiable for which payments were made though through cheques and not proved that the amount of purchases were returned back to the assessee in cash, only 25% being gross profit thereon can be added. [2] The Ld. CIT(A) has not appreciated that in the case of the assessee, it is beyond any doubt proved that the purchases made by the assessee from Panwala Group were bogu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olour chemicals, but has only issued bogus bills at a meager commission price. The bogus bills have been raised by the concerns of SRP as listed above and upon receipt of cheque against the bogus bills; the amounts have been withdrawn by SRP in cash and admittedly returned to the assessee in cash after deduction of the commission. Opportunity of cross-examination of SRP was afforded to Shri Kaluram B Rastogi, principal officer, SRP who has once again reiterated the fact of non-selling of any colour chemicals to the assessee. Thus, it was taken that the claim of purchase from the bogus concerns of SRP are not genuine. These bogus purchases have inflated the purchases debited to the profit and loss account. Therefore the Assessing Officer held that the assessee has failed to maintain complete details of purchases. These constitute a serious defect in the regular accounts maintained by it as certain portion of the purchases was not genuine. In the instant case, the purchase registers is incomplete and incorrect on account of the reason that bogus purchases have been undertaken as evidenced from the confession of entry giver SRP. Hence the purchase registers submitted by the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctory explanation about the source of such expenditure have been provided. On the failure to explain the source of the expenditure, it is deemed to be income of the assessee and liable to be added u/s. 69C. Further, as per the provision to the section no deduction can be allowed in respect of such expenditures. Therefore, the unexplained expenditure of ₹ 84,50,070/- was considered as deemed income of the assessee for the A.Y. 2001-02 and was added to the taxable income. Similarly, an amount of ₹ 40,300 for A.Y 2002-03 and ₹ 9,68,650/- for A.Y. 2003-04 was considered as deemed income of the assessee. 3. The Ld. CIT(A) vide para-6.1 to 6.6 has observed as under:- 6.1 I have considered the facts of the case and the submissions of the appellant and the case laws relied upon. As far as issue of bogus purchases and rejecting the books of account is concerned, I do not agree with the appellant s view. As per the evidences brought on record by the ADIT and the Assessing Officer, Shri Rohit Panwala admitted that he floated various bogus concerns and issued bogus bills to the assessee and after receiving amount by cheque, he returned back the amount in cash. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ake the payment to the purchases from open market from third party. Hence, the money was available with the assessee and source of expenditure is explained, hence, the addition cannot be sustained u/s.69C but the addition is here sustained as bogus purchases. 6.4 The appellant s submission that the addition cannot be made when the payments are made by account payee cheques as per decision of Gujarat High Court in the case of CIT vs. M.K. Brothers 163 ITR 249, is not applicable to the facts of the case because here, it is evident from the statement of Shri Rohit Panwala that all the payments were made by account payee cheques but the amounts were refund in cash to the assessee. Hence, the ratio of this case is not applicable to the assessee s case. Further the ratio of the case cited by the assessee of Hon ble ITAT Ahmedabad Bench in the case of Akruit Dyeing Printing Mills (P) Ltd. in ITA No.2551/A/2006 2752/A/2006 , is not applicable to the assessee s case because in that case, the Ho ble ITAT observed in para-20 that we find that the revenue has brought no material on record to show that the purchases shown by the assessee from the aforesaid 3 parties, were not genui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed (supra). 10. Had the tribunal examined the entire evidence and come to a certain factual finding, perhaps our role would have ended thee. In the present case, however, such exercise has not been undertaken. We had noticed that against the Revenue s collection of evidence in the form o statement and affidavit of Rohit Panwala, who was also offered for cross examination on hands of assessee, assessee had also led considerable evidence to counter such statements. In particular, as already noted, sand of assessee was that payments were made through Account Payee cheque. There was no evidence of money having been reverted back to the assessee in cash. There was also evidence of goods actually having been received. Such evidences produced from both sides ought to have been assessed by the tribunal to decide the factual issues presented before it. By making it abundantly clearly that we are inclined to remit the matter back to the tribunal for full and fresh consideration in accordance with law. 5. The assessee had declared purchases of colours and chemicals from the concern of SRP mentioned hereinabove. SRP had admitted through the affidavit and the statement that he has never ..... X X X X Extracts X X X X X X X X Extracts X X X X
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