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TMI Blog2017 (12) TMI 1254X X X X Extracts X X X X X X X X Extracts X X X X ..... ntenable in the eye of law having been confirmed without providing opportunity to cross examine the person on the basis of whose statement the allegations have been made against the appellant and without following the principle of natural justice. (iv) That the addition made mere on basis of statement of any person without supported by any corroborative evidences is untenable in the eyes of law. 4. (i) On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in confirming an addition of Rs. 54,898/- on account of commission on bogus purchases under section 69C of Act. (ii) That the above said addition has been confirmed by the Ld. CIT (A) without bringing any material or evidence on record to apply the said rate of commission. 5. (i) On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law .in confirming addition of Rs. 4,25,000/- on account of capital introduced by Sh. Rishi Sachdeva. (ii) That the above said addition has been made despite the assessee bringing all material and evidence to prove the same and ignoring the fact that no such addition on account of capital introduced by a par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from M/s Parshanath Enterprises amounting to Rs. 36,23,600/- be not treated as bogus purchases and disallowed. The AO observed that no explanation was given by the assessee, therefore, by remaining silent, the assessee tacitly admitted the fact that the purchases made by it with M/s Parshanath Enterprises were bogus. He, therefore, made the addition of Rs. 36,23,600/-. 7. Being aggrieved the assessee carried the matter to the ld. CIT(A) and moved an application for admission of the additional evidence under Rule 46A of the Income Tax Rules, 1962. The ld. CIT(A) forwarded the evidences to the AO for his report, in response, the AO vide letter dated 05.12.2013, furnished the report which had been reproduced in para 5.1 of the impugned order. The assessee also furnished rejoinder to the remand report which has been reproduced in para 5.2 of the impugned order. Thereafter, the AO also furnished his comments vide letter dated 16.01.2014 and the assessee filed rejoinder to the remand report which have been reproduced by the ld. CIT(A) in paras 5.3 & 5.4 of the impugned order, for the cost of repetition, the same are not reproduced herein. 8. The ld. CIT(A) after considering the submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pearing in its books or any confirmation from M/s Parshanath Enterprises to show authenticity of the transaction. The only evidence relied upon by the appellant is the D-VAT return of M/s Parshanath Enterprises which reflect the sale transaction. Keeping in view the allegation and the statement of the employee of M/s Parshanath Enterprises that it is only entering into paper transaction of sale , the sale are bound to be reflected in the D-VAT return. Therefore simply on the basis of the D-VAT return the sale cannot be accepted as authentic, especially in view of the fact that there is no evidence of payment except the payment of Rs. 50,000/- to M/s Parshanath Enterprises. In fact the payment of Rs. 50,000/.- confirms the statement of Mr. Mangla that Rs. 50,000/- was paid as commission for the sale bills. The treatment of Rs. 36,23,600/- as bogus purchases by the Assessing Officer is therefore upheld. The ground of appeal are dismissed." 9. Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the AO made the impugned addition only on the basis of statement of Sh. Mukesh Mangla withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (India) Pvt. Ltd. in ITA No. 13/2017 order dated 01.04.2017 (Del.) Pr. CIT Vs DKB Infrastructure Pvt. Ltd. in ITA No. 459/2016 order dated 27.07.2016 (Del.) Pr. CIT Vs Uma Singal, Brijbhushan Singal in ITA Nos. 689 to 692, 694 & 744 of 2015 order dated 05.10.2015 (Del.) Prakash Chand Nahata Vs Union of India 163 CTR 310 (SC) Kishan Chand Chellaram Vs CIT 125 ITR 713 (SC) CIT Vs SMC Share Brokers Ltd. 288 ITR 345 (Del.) Alok Aggarwal Vs DCIT (2000) 67 TTJ 109 (Del.) 10. In his rival submissions, the ld. DR strongly supported the orders of the authorities below and reiterated the observations made in their respective orders. 11. I have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that the AO doubted the purchases made by the assessee from M/s Parshanath Enterprises only on the basis of statement of one Sh. Mukesh Mangla. However, it is not brought on record, in which capacity Sh. Mukesh Mangla has given statement when Sh. Sachin Jain was the proprietor of M/s Parshanath Enterprises. The assessee furnished the copy of ledger account of the assessee in the books of M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... worthiness of the transaction by producing every document related to the source of the credits in the form of copy of Income Tax Return, details of drawings etc. of Mr. Rishi Sachdeva and the copy of his statement of affairs for the period ending on 31.03.2005, 31.05.2006 and 31.06.2007. A reference was made to page nos. 5 to 58 of the assessee's paper book. The reliance was placed on the following case laws: CIT Vs Shiv Dhooti Pearls & Investments Ltd. in ITA No. 429/2003 order dated 21.12.2015 of Hon'ble Delhi H.C. CIT Vs Real Time Marketing (P) Ltd. 306 ITR 35 (Del.) CIT Vs Diamond Products ltd. (2008) (9) TMI 943 (Del.) CIT Vs Metal & Metals of India (2006) (11) TMI 630 (P&H) 18. In his rival submissions, the ld. DR supported the orders of the authorities below. 19. I have considered the submissions of both the parties and perused the material available on the record. In the present case, it is noticed that the identity of the partner Mr. Rishi Sachdeva was not in dispute. He contributed a sum of Rs. 4,25,000/- as a partner in the assessee firm. He was assessed to income tax in his individual capacity. The assessee furnished the copies of his statement of affairs for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of the assessee-firm is on account of introduction of capital by the partners and the firm has failed to prove the amount credited in the books of account and as such it would be assessed in the hands of the partners as unexplained investment." 23. On a similar issue, the Hon'ble Madhya Pradesh High Court in the case of CIT(A) vs. Metachem Industries [2000] 245 ITR 160 has held as under: "Once it is established that the amount has been invested by a particular person, be he a partner or an individual, then the responsibility of the assessee is over. Whether that person is an income-tax payer or not and where he had brought this money from, is not the responsibility of the firm. The moment the firm gives a satisfactory explanation and produces the person who has deposited the amount, then the burden of the treated to be the income of the firm for the purposes of income-tax." 24. Similarly, the Hon'ble Punjab & Haryana High Court in the case of CIT vs. Barna Electro Corporation [2001] 252 ITR 344 affirmed the view of the Tribunal by holding that: "The Tribunal deleted the addition n the ground that thought there was no evidence to show that on the date of investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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