TMI Blog2018 (7) TMI 873X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, we set aside the order of the CIT(A) and direct the AO to delete the addition made on account of purchases. Accordingly, the grounds raised by the assessee are allowed. - ITA No. 1499/Hyd/2017 - - - Dated:- 11-7-2018 - SMT P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER Assessee by : Shri K.C. Devdas Revenue by : Smt. B.K. Vishnu Priya ORDER PER S. RIFAUR RAHMAN, A. M. This appeal filed by the assessee is directed against the order dated 16/06/2017 of CIT(A) 4, Hyderabad for AY 2012-13. 2. Briefly the facts of the case are, assessee company, engaged in jewellery business, filed its return of income for the AY 2012-13 on 15/09/2012 admitting income of ₹ 2,00,34,421/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 350 + 1,17,810 purchased from Euro Diam and Megha Gems respectively.) 3. Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A). 4. Before the CIT(A), the assessee stated that the diamonds were purchased from M/ s. Euro Diam at ₹ 15,72,350/ - and from M/s. Megha Gems at ₹ 1,17,810/-. In this connection the assessee submitted the copy of month wise purchase register of diamonds for the period 01.04.2011 to 31.03.2012, copy of purchase register for the month of December, 2011 and February, 2012 computation of total income, Annual Report for FY 2011-12, copy of Audited Financial Statements i.e. Balance Sheet, Profit Loss Account along with complete schedules, copy of Tax Audit Report in Form-3CA/3C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the information from Investigation Wing without properly verifying the purchases or making further investigation. He submitted that all the purchases are genuine and properly recorded in the financial statement. He brought to our notice the financial statements to demonstrate that the results declared by the assessee are consistent over the years and all the quantity details are matched with the financial results. He further submitted that assessee was not provided opportunity to cross examine the entry provider. Moreover, the MD has categorically denied knowing the entry provider personally and the statements were recorded after two years. In this process, he relied on the following case law: 1. ACIT Vs. M/s Larsco Entertainment Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . However, from the order of the Tribunal dated 30-04- 2010, we find that the Tribunal has deleted the additions on account of bogus purchases not only on the basis of stock statement i.e. reconciliation statement, but also in view of the other facts. The Tribunal records that the Books of Accounts of the respondent-assessee have not been rejected. Similarly, the sales have not been doubted and it is an admitted position that substantial amount of sales have been made to the Government Department i.e. Defence Research and Development Laboratory, Hyderabad. Further, there were confirmation letters filed by the suppliers, copies of invoices for purchases as well as copies of bank statement all of which would indicate that the purchases were i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used against the assessee and in the absence of affording a reasonable opportunity of being heard by summoning the said witness the assessment order was vitiated. 7.4 We are of the view that the AO failed to establish that the assessee has made bogus purchases by bringing documentary evidence on record and, also, assessee was not given opportunity to cross-examine the entry provider. Therefore, following the ratio laid down in the aforesaid cases, we set aside the order of the CIT(A) and direct the AO to delete the addition of ₹ 16,90,160/- made on account of purchases. Accordingly, the grounds raised by the assessee are allowed. 8. In the result, appeal of the assessee is allowed. Pronounced in the open Court on 11th July, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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