TMI Blog2017 (11) TMI 498X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) has failed to find out any mistake. Therefore, sources of the purchases were explained by the assessee and hence, it is not a fit case to make the addition u/s 69C - Decided in favour of assessee. - ITA No.307/Kol/2017 - - - Dated:- 9-8-2017 - SHRI A.T. VARKEY, JM AND DR. A.L.SAINI, AM For The Assessee : Shri R.K. Kankaria, CA For The Revenue : Shri Arindam Bhattacharya, Addl. CIT Sr. DR. ORDER Per Dr. Arjun Lal Saini, AM: The captioned appeal filed by the Assessee, pertaining to assessment year 2008-09, is directed against the order passed by the ld. Commissioner of Income Tax (Appeals), Burdwan, in Appeal No. 210/CIT(A)/Asl/W-1(3)/Bwn/2012-13, dated 29.11.2016, which in turn arises out of an order passed by the Assessing Officer u/s 143(3)/251 of the Income Tax Act 1961, (hereinafter referred to as the Act ), dated 04.01.2013. 2. Brief facts of the case qua the assessee are that the assessee filed its return of income for assessment year 2008-09 on 30.09.2008, declaring the total income of ₹ 2,83,313/-. The income tax return filed by the assessee was duly processed u/s 143(1) of the Act. Subsequently, the assessee s case was sele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Ld. CIT(A), the assessee stated that the impugned payment had arisen out of the books of the assessee since they were reflected in the ledger books of the assessee. The only thing was that neither the payments for purchases, nor the receipt of sales proceeds were reflected in the bank. Therefore, it was not logical for the Assessing Officer to treat this as a matter of undisclosed source purchases. The Ld. CIT(A) observed that it was only the version of the assessee that the purchases were made out of sale proceeds obtained in cash, without reflecting the said sale proceeds either in the cash book or in the bank books. There is nothing to substantiate this claim. Therefore, the Ld. CIT(A) held that it became impossible to draw a nexus between the claimed cash received from sales and the claimed cash payments for the purchases. Such cash transactions, if actually made, as it is, are severely restricted by law, precisely for the reason, that the assessee can continue to make claims and try and shift the onus to the Department to prove otherwise. It is a fact that the purchases have been made. The Assessing Officer has proved beyond doubt that purchases have indeed been made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 9 of the original assessment order u/s 143(3) dated 22.10.2010 - it is clear that the assessee has not taken into account sales of ₹ 17,22,132/- arising on A/c of unaccounted purchases. The AO had also drawn a logical conclusion that since the Purchases and Sales are kept outside the books of A/c's. the Gross Profit of the sale should be added. The Assessee had also accepted the addition of this GP of ₹ 6,222/- as per the original assessment order u/s 143(3) dated 22.10.2010 and did not appeal against the same. However Ld. CIT(A) while disposing the appeal vide his order dated 23.11.2012 (Page No 59-63) gave the following direction - If such payments are seen to be from disclosed sources or not at all made during the current assessment year then no case exists for an addition of the type the A.O has made. The appellant in that case will get consequential relict. The ground of appeal is allowed subject to the directions given above. The above directions by the Ld. CIT(A) was in itself unlawful as it resulted in referring back the case to the Assessing Officer which is against the powers of the Ld. CIT(A) under section 251 of the Income Tax Act. 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e clear, a cash ledger summary of the assessee- one as per the audited books of accounts as filed with the return of income wherein mistakenly the purchases of ₹ 17,22,131/- and its related sales amounting to ₹ 17,28,353/- (including GP of ₹ 6,222/- calculated @ 0.36% as per the original assessment order u/s 143(3) dated 22.10.2010) was not included and the other one including the unrecorded sales and purchases (Page No 67-68) was submitted to Ld. CIT(A). Along with the above and on demand of the Ld. CIT(A ) an analysis of the purchase made from PPL from 01.02.2008 to 31.03.2008 and its related sales, extract of stock and sales register, sale bills, ledger of PPL from 01.02.2008 to 31.03.2008, invoices issued by PPL from 01.02.2008 to 31.03.2008 and details of cash deposited in bank accounts for the period 01.04.2007 to 31.03.2008, were also submitted during the proceedings to verify the sales made which were mistakenly excluded from the sales reflected in the audit report. The purchase from PPL during 01.02.2008 to 31.03.2008 has been duly sold and the relevant entries had also been duly made in stock register as well as sales register and it is these sale procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) in our case was on 19.01.2016 whereas the order was passed on 29.11.2016 and served on us on 22.12.2016. This substantial gap in time of around 11 months, between date of hearing and serving of order shows that Ld. CIT(A) failed to remember the actual happenings of the proceedings and the materials produced and hence was not able to discuss the same while disposing the appeal. 3.3. On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the CIT(A), which we have already noted in our earlier Para and is not being repeated for the sake of brevity. 3.4. Having heard the rival submissions, perused the material available on record, we notice that the assessee submitted before us the Copy of bank statement (vide PB 46, 47) wherein it is very much clear that the assessee has purchased through account payee cheques. The Counsel submitted before us that the transaction for purchase from PPL were never made in cash and thus in no manner whatsoever section 40A(3) could have been invoked. The payments to PPL were made through regular bank account of the assessee and the only question raised by the department was regarding its source. To this t ..... 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