TMI Blog2018 (11) TMI 1655X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement recorded by the third party statement i.e. Sales Tax Department of Mumbai in the case before us. We also note that the ld. DR at the time of hearing has not brought anything on record suggesting that the CIT(A) has admitted any additional documents in contravention to the provision of Rule 46A of the Income Tax Rule. - Decided in favour of assessee. - ITA No. 3260/Ahd/2015 Assessment Year: 2011-12 - - - Dated:- 1-11-2018 - Shri Rajpal Yadav, Judicial Member And Shri Waseem Ahmed, Accountant Member Assessee by: Shri S. K. Dev, Sr. D.R. Revenue by: Shri H. V. Gandhi, (Adv.) ORDER Waseem Ahmed, The captioned appeal has been filed at the instance of the Revenue against the appellate order of the Learned Commissioner of Income-Tax (Appeals)-10, Ahmedabad [ CIT(A) in short] relevant to Assessment Year 2011-12. 2. Revenue has raised the following grounds of appeal:- 1. That the Ld.CIT(A) has erred in law and on facts in accepting the bogus purchase when there was sufficient evidence that the assessee had bogus entry in the book which could not be verified during assessment proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. 1292055 9. M/s. S. S. Enterprise 1011375 10. M/s. Keystone Tubes Pvt. Ltd. 1083431 Total 6676237 4.1 The AO during the assessment proceedings to verify the genuineness of the aforesaid purchases issued notice u/s 133(6) of the Act, which returned back with the postal remark not known . Accordingly, the AO sought clarification from the assessee. The assessee in compliance thereto vide letter dated 23.02.2015 furnished the copy of VAT return, Xerox copy of Cheques and account statement duly signed by the parties as discussed above. However, the AO did not find the contention of assessee correct and observed as under: i. The notices issued upon the parties were returned as unserved. ii. The parties as discussed above have duly admitted in the statements recorded during the search proceedings by the DCIT Sales Tax Department, Mumbai that these are engaged in providing accommodation entries. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O further stated that the payment made by the appellant through account payee cheques was received by the appellant in cash through brokers. 4.1 The appellant submitted that during the assessment proceedings, he submitted - i) monthwise purchase and sales ii) partywise monthwise purchase iii) copy of balance sheet, Trading Account, P L Account, Audit report and stock register iv) Copy of bank statements with copy of cheques (both sides) through which payments for these purchases were made. v). Transportation slips related to transport of these goods 4.2 The appellant cited various case laws in support of his contentions, as mentioned in his submissions. After considering the assessment order and submission of the assessee, the additions made by the AO are not found justified for the following reasons:- i) The appellant is engaged in the business of trading in ferrous and non ferrous metal. During the year, total purchases of the appellant is ₹ 1,44,80,582/-, out of which, the AO considered purchases of ₹ 66,76,237/- as non-genuine. This is about 47% of the total purchases. If 47% purchases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchases and sales outside the books of accounts. 8.3 We also note that in similar facts and circumstances various courts have deleted the addition, the details of the cases are specified below: i. The Hon ble Gujarat High Court in the case of CIT vs. M. K. Bros reported in 163 ITR 249 has held as under: 8. On a perusal of the order of the Tribunal it clearly appears that whether the said transactions were bogus or not was a question of fact. The Tribunal has also pointed out that nothing is shown to indicate that any part of the fund given by the assessee to these parties came back to the assessee in any form. It is further observed by the Tribunal that there is no evidence anywhere that these concerns implicate vouchers to the assessee. Even the two statements do not implicate the transactions with the assessee in any way. With these observations the Tribunal ultimately has observed that there are certain doubtful features, but the evidence is not adequate to conclude that the purchases made by the assessee from these parties were bogus. It may be stated that the assessee was given credit facilities for a short duration and the payments were given b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of the appellant . iii. The Hon ble Bombay High Court in the case of CIT vs. Nikunj Eximp Enterprises Pvt. Ltd. reported in 372 ITR 619 wherein it was held as under: 7. We have considered the submission on behalf of the revenue. 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 infact made. In our view, merely because the suppliers have not appeared before the Assessing Officer or the CIT(A), one cannot conclude that the purchases were not made by the respondent-assessee. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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