9911796707
TMI Blog2017 (12) TMI 1556X X X X Extracts X X X X X X X X Extracts X X X X ..... the Asst Year 2010-11 on 30.9.2010 declaring total income of Rs. 2,38,76,294/- which was processed u/s 143(1) of the Act on 26.5.2011. There was a survey conducted in the business premises of the assessee on 26.3.2010. The ld AO observed that during the survey, it wa found that in respect of purchases and job work from certain parties, as per the bills, amount was not mentioned on the bills and was self-entered / mentioned on the bills after some days. This was classified by the ld AO as blank bills. The ld AO listed out such parties from whom purchases made were recorded in the blank bills in respect of 11 parties. The assessee furnished the names and addresses of all these 11 parties before the ld AO. The ld AO directed the parties to produce these parties which was not done by the assessee. Out of these 11 parties, the ld AO sought to verify the veracity of purchase transactions had with the following three parties :- National Enterprises Rs. 76,15,142 Priyanka Enterprises Rs. 43,00,960 Shivam Enterprises Rs. 47,97,072 The postal authorities reported that the aforesaid addressees are not known in the given address and hence the notices could not be served. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Some fabricators used to fill up the bills at the office at the time of payment. The blank bills of some fabricator as taken up at the time of survey were of such nature. Needless to state that the assessee has deducted tax at source from all such fabricator's bill and every bill was recorded in the regular books of accounts and hence there was no undisclosed record." 3.2. The ld AO observed that the submissions made by the assessee does not explain the genuineness, when there are no such discrepancies in respect of other purchases and job work in respect of other parties. He further observed that the gross profit rate is also lower as compared to earlier year as under:- Assessment Year Gross Turnover (Msc Income Added in Turnover) Net Turnover Gross Profit (Without msc Income) Gross profit rate 2010-11 156172778 7272782 14889996 15054194 10.11% 2009-10 342083904 7104041 334979863 48591820 14.50% The ld AO proceeded to show cause the assessee as to why the purchases made from aforesaid three parties could be treated as ingenuine purchases and as to why the same should not be disallowed. The assessee gave the reason for reduction in lower gross profit ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned suppliers. As stated in the submission dated 26.02.2013, the suppliers deliver the goods with challan and bills but without mentioning the amount therein as rate of goods fixed at head office which depends on the quality report. You have perhaps noticed that all such bills enclosed with the suppliers challan and have signed by our godown personnel with the remark "quantity O.K.". The bills for which you have raised question were complete with quantity and description as mentioned in the challan. In such cases, the suppliers at the Head Office put the agreed price in the bills after negotiation. In the instant cases, the goods were accepted at the godown and as a result rate was finalized but the suppliers not submitted filled up bills. As a result, the survey conductor asked the assessee to put the rate/amount in such bills to find out the exact purchase value up to the date of survey. In this connection, please note that all the quantity/quality verified challans of the suppliers recorded in our regular stock register. Had the same were not purchased, our quantitative closing stock summary would have differ and the valuation of closing stock would have lowered. The assessee fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee and all is done as per convenience of the assessee and person is being used for such bogus entries. The ld AO also observed in the remand report that during verification at the premises on 18.3.2014 as reported by the Inspector , Mr Milan Maity had done only fabrication work and had not supplied any finished goods to the assessee for any period and all his business transactions were managed by the assessee. The assessee filed his rejoinder to the remand report submitted by the assessee before the ld CITA on each and every point of allegations leveled by the ld AO. 5. The ld CITA deleted the addition of Rs. 1,67,13,174/- by observing as under:- "7.1 Appellant's submission, A.O.'s Order and remand report and facts available on record is taken into consideration. During the course of survey it was seen that there were certain bills for purchase or job work where amounts were not entered in the bills. There were 11 such parties. During the course of assessment AO took up the matter of purchase/job work shown from the above parties for enquiry. However, AO has not taken any adverse inference of 8 of the parties. In balance 3 parties where no reply was received as the parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idering the views of the AO in its proper perspective. 2. That on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the assessee's claim without appreciating the fact that in the remand report the AO had vehemently supported the additions made after due enquiry. 3. The appellant craves leave to add, alter, modify or abrogate any ground of appeal at the time of hearing. 7. We have heard the rival submissions and perused the materials available on record including the paper book of the assessee comprising of pages 1 to 138 thereon. We find that at the time of survey, the survey team found certain bills for purchases from certain parties, wherein the quantity was duly reflected and the same has been taken in the stock register and there is absolutely no dispute with regard to the quantity. The assessee had duly explained that the rates would be entered in the said bills found for the period January to March 2010 after due negotiations with the said three suppliers after satisfactory verification of the quantity delivered and after carrying out the quality check of the same. Hence this goes to prove, that at the outset, there is absolutely no c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e further enquiries as per the business address and also as per the addresses as per bank accounts as called by the ld AO from the respective banks of the parties. The ld AO after enquiry concluded that the parties were carrying on fabrication work as given by the assessee and not supplied any finished goods to the assessee but received payments by cheques from the assessee. In this regard, the assessee sought for cross examination of such parties and the same was granted. The following facts emanated out of such cross examination of the parties :- i) The ld AO had called the bank statement from the respective bankers of the parties and verified the same in details and found that all the account payee cheques issued by the assessee for purchase of finished gloves has been reflected in the party's bank accounts. He has also observed that said parties has issued several cheques to their purchasing parties from the said bank accounts. Such observation, he has not stated anywhere in his findings and in his conclusion in the remand report. ii) That the ld AO disbelieved the existence and transaction ofhte parties which proved baseless. The cross examination and the physical oath of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the ld AO in the remand proceedings had examined two out of the three parties which were the subject matter of addition. Factually the ld AO had verified / examined only one such party i.e National Enterprises (Proprietor Shri Milan Maity). In addition to this, he had examined Deep Enterprises which was not directed to be verified by the ld CITA . We also find that the ld CITA had given a categorical finding that there was no quantitative discrepancy that was found in the purchases recorded in the stock register. It is not in dispute that even on the date of survey, the alleged blank bills did contain the quantity duly received by the assessee. Only the rates were not mentioned in those bills at the time of survey , the reasons for which had already been elaborated hereinabove. The ld AR placed before us a summary sheet wherein if the alleged purchases are considered as ingenuine, the same are to be removed from purchases, then the same would result in negative stocks for the assessee, which is not the case of the revenue at all. All these purchases are duly backed by corresponding exports. On the contrary, we find that the survey team only found excess stock at the time of su ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
