TMI Blog2017 (12) TMI 1412X X X X Extracts X X X X X X X X Extracts X X X X ..... sh purchases holding the same to be not maintainable. At the time of hearing before us, the ld. D.R. has not been able to rebut or controvert the findings of fact recorded by the ld. CIT(Appeals) while giving relief to the assessee on this issue. We, therefore, find no justifiable reason to interfere with the impugned order of the ld. CIT(Appeals) giving relief to the assessee on this issue and upholding the same, we dismiss Ground No. 2 of the Revenue’s appeal. Disallowance of alleged cash purchases - Held that:- Some disallowance on estimated basis is required to be made on account of the said purchases for the unverifiable element involved therein. Having regard to all the relevant facts of the case including the fact that the goods purchased by the assessee are in the nature of forest produce and the assessee has finally declared substantial loss, we are of the view that it would be fair and reasonable to make such disallowance to the extent of 10% of the purchases. We accordingly modify the impugned order of the ld. CIT(Appeals) on this issue and sustain the disallowance of ₹ 90,60,200/- made by the Assessing Officer to the extent of ₹ 9,06,020/-. Ground No. 3 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o verify the sundry creditors shown by the assessee. One of such creditors, namely Subir Shellac Enterprise confirmed only the amount of sales of ₹ 28,07,000/- made to the assessee in reply to the letter under section 133(6) filed with the Assessing Officer. When this position was confronted by the Assessing Officer to the assessee, the latter explained that out of the closing balance of ₹ 32,72,600/- appearing in the name of Subir Shellac Enterprise, a sum of ₹ 32,80,600/- was brought forward from the earlier year. Not satisfied with this explanation of the assessee, the Assessing Officer treated the credit balance of ₹ 32,72,600/- shown by the assessee as payable to Subir Shellac Enterprise as a bogus liability and added the same to the total income of the assessee. 5. The addition of ₹ 32,72,600/- made by the Assessing Officer on account of the alleged bogus liability in the name of Subir Shellac Enterprise was disputed by the assessee in the appeal filed before the ld. CIT(Appeals) and after considering the submission made by the assessee as well as the material available on record, the ld. CIT(Appeals) deleted the said addition for the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relying on the account of the said party filed by the assessee for the immediately succeeding year showing some payments made against the closing balance. He contended the existence of the liability thus was not established by the assessee on evidence and keeping in view that the same was not even confirmed by the concerned creditor in reply to the letter issued by the Assessing Officer under section 133(6), the ld. CIT(Appeals) was not justified in deleting the addition made by the Assessing Officer on this issue by treating the said creditor as a bogus liability. The ld. counsel for the assessee, on the other hand, has submitted that the copy of the account of the concerned creditor for the year under consideration, duly confirmed by the said party was filed by the assessee even during the course of assessment proceedings before the Assessing Officer. She has invited our attention to the copy of the same placed at page no. 30 of the paper book which clearly shows that there was an opening credit balance of ₹ 32,80,600/- in the account of the said party and after making purchases of ₹ 28,07,000/- and payments of ₹ 28,15,000/- during the year under consideration, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven in paragraph no. 5.2 and 5.2.1 of his impugned order:- 5.2. The submission of the Ld. AR has been considered in the light of documents submitted and the case laws cited. In this case, appellant purchased onions from Shankar Prasad Gupta Co. As per the ledger of the appellant, he was having opening liability of ₹ 73,72,277/- to the party. During the year he purchased onions of ₹ 54,35,476/- and made payments of ₹ 1,04,00,000/- [84.00 lacs by cheque and ₹ 20.00 lacs by cash], leaving outstanding liability of ₹ 24,07,753/-. The AO issued notice u/s. 133(6) of the Act, seeking confirmation of account of the appellant. The party did not respond. Thus, the AO disallowed cash purchases of ₹ 20.00 lacs. He also added back the closing balance of ₹ 24,07,753/- as bogus liability. 5.2.1. So far as addition of ₹ 20.00 lacs is concerned, I do not find much merit in AO's action. There were as such no separate cash purchases, but cash payments were made to same Shankar Prasad Gupta Co against purchases, to whom cheque payments of ₹ 84.00 were also made. The AO accepted the opening liability of ₹ 73,72,277/-, purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings, purchases claimed by the assessee were verified by the Assessing Officer. On such verification, he found certain discrepancies and anomalies in the following three purchase bills:- Name of the Party Bill No. Date Amount (Rs.) 1. Shiva Exports SE/001/2010-11 01.01.2011 31,93,400/- 2. Shalim Traders ST/001/2010-11 15.09.2010 30,65,800/- 3. Lotus Bio Green LBG/001/201011 01.12.2010 28,01,000/- Total amount 90,60,200/- 13. The discrepancies and anomalies pointed out by the Assessing Officer in the above three bills were as under:- (1) Serial numbers are identical. (2) Formats are synonymous. (3) Number in bills indicate that selling party had made only single transition in whole and with only one purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and same items were exported to Bangladesh through Petrapole check-post in the same year and next year. It is seen from the records that the appellant had produced following documents for AO's consideration: (a) Purchase Invoice duly confirmed by parties. (b) Payments against purchases through Banking channel. (c) Purchase orders indicating delivery at Petrapole, LCS (West Bengal). {d) Commercial Invoice, bill of export and Exchange Control Declaration Form in respect of sale in A. Y .2012-13. (e} Sales of the items so purchased in the year under consideration and 12.00 MT in subsequent year. (f) Realization of sale proceeds in the year under consideration and in subsequent year through Banking channel. 6.3.1. Going by the evidences on record, exports of lac buttons cannot be held as ingenuine. The same goods were exported to Bangladesh. The Appellant paid those three parties through banking channel. He also received the sale proceeds through banking channel. The goods were exported through Petrapole check-post as can be seen from bill of export and Exchange Control Declaration. Thus, once the sales were genuine there ought to have pu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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