TMI Blog2018 (11) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... eal by Revenue is directed against the order dated 28.05.2010 of the Ld. CIT(A), Faridabad for AY 2007-08 on the following grounds of appeal: 1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred on facts and in law in deleting the addition of ₹ 1,33,56,101/- made by the Assessing Officer on account of bogus purchases especially when the assessee had failed to discharge his onus to prove the identity of the alleged supplier and the genuineness of the alleged transactions despite granting numerous opportunities and even total failure on assessee s part to even furnish copies of GRs, challans or any other evidence regarding delivery of goods, or even the copies of purchase bills leads to the conclusion that the assessee failed to prove the same which resulted into addition on account of bogus purchases. 2. On the facts and in the circumstances of the case, the order of the learned CIT(A) is perverse and contrary to the evidence available on record in holding that the Assessing Officer has not been able to make out his case against the progressive trading result declared by the assessee and has declared the purchases worth ₹ 1,33,56,101/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on facts and in law in deleting the addition of ₹ 14,43,239/- made by the Assessing Officer on account of bogus liability especially when the assessee has failed to discharge the primary onus to prove the identity and the genuineness of liability reflected in his account books despite granting opportunities. 7. On the facts and in the circumstances of the case, the learned CIT(A) has erred on facts and in law in deleting the addition of ₹ 14,43,239/- made by the Assessing Officer on account of bogus liability in presuming that the onus to be upon the Assessing Officer, which was not the case. 8. That the appellant craves for the permission to add, delete or amend the grounds of appeal before or at the time of hearing of appeal. 2. There are two effective issues are identified for adjudication as under: 1) Bogus purchases of ₹ 1,33,56,101/- and 2) Bogus liability of ₹ 14,43,239/-. 3. Briefly, the facts of the case are that return declaring income of ₹ 1,75,440/- was filed by the assessee on 12.10.2007 and the assessment was completed u/s 143(3) of the Act on 29.12.2009 at an income of ₹ 1,49,74,780/-. The AO made two addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment. I find that the AO has in a very mechanical and cursory manner made the addition of ₹ 14,43,239/- without any proper finding or discussion on record. The very fact that the balance amount of ₹ 14,43,239/- was outstanding as on 31.03.2007 from M/s Hindustan Trading Co. shows that the liability existed as such as on 31.03.2007 and hence as per the elaborate defense and discussion undertaken by the Ld. AR on this issue, both on facts and law, the addition of ₹ 14,43,239/- can in no way be assessed as deemed income u/s 41(1) of the Income Tax Act, 1961. Similarly, such credit balance cannot also be by any stretch of imaginary treated as bogus when the AO has not discharged his burden in establishing the nongenuineness of such credit or, which may be subjected to the provisions of section 68 of the Income Tax Act, 1961. In fact, the entire disallowance is wholly without any legal support or factual material on record. Hence, it stands cancelled. 4. The Ld. DR. Supported the assessment order contending that the order of the learned CIT(A) is perverse and contrary to the evidence available on record in holding that the Assessing Officer has not been able t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at assessee has not made purchases from these two parties yet the factum of purchase per se cannot be denied. How could the sales be effected without purchases? This fact cannot be lost sight of that assessee is a trader and has made sales of 2,58,167 kgs. Of sheet and plate and 3,71,995 kgs. Of structure and which has been accepted by the Ld. AO also. Assessee had made sales, it could not have been made without the corresponding purchases. Therefore, this allegation of Ld. AO that purchases to the tune of ₹ 1,33,56,101/- has not been made cannot be justified on any score and cannot be sustainable. 6. Heard. It is un disputed fact on record that the AO treated M/s Maa Durga Trading Company as bogus entities on the basis of inspector s report which was not confronted to the assessee. The AO noted that the assessee did not cooperate in assessment proceedings by not disclosing the whereabouts of Sh. Vinod Goyal, therefore, he could be traced only towards the end of limitation and there was no time with the AO to confront the assessee on this issue after 29-12-2009. 7. We find that the Ld. CIT(A) erred in observing the AO was not able to make out his case against the progre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. has not controverted these contentions raised by the counsel for the assessee. Thus, the assessee was prevented by sufficient cause in not producing the necessary documents/evidences as required by the AO, which the Ld. CIT(A) has not adjudicated while addressing the issue of bogus purchases, though, it was duly confronted to the assessee during the course of assessment proceedings vide para 6, page 8 of the assessment order. Therefore, we find it deem fit to restore the issue back to the CIT(A), for deciding the matter pertaining to bogus purchases after granting due opportunity afresh of being heard to both the assessee and the AO. 10. In the above view, the case is restored to the CIT(A), for afresh consideration and examination of the issue of bogus purchase of ₹ 1,33,56,101/- with the following observation: I. To examine the statement of Shri Vinod Kumar Goyal, Prop. M/s Maa Durga Trading Company recorded at the back of the assessee, and Inspector report, confront the assessee with the same. II. Call for remand report from the AO on the submission of the assessee. III. No doubt, the assessee shall cooperate in the afresh proceedings, before the CIT(A). ..... 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