TMI Blog2021 (8) TMI 859X X X X Extracts X X X X X X X X Extracts X X X X ..... their affidavits , therefore, there could have been no justification in the absence of any material proving to the contrary to doubt the genuineness of the purchases claimed by the assessee to have been made from the aforementioned parties. As the assessee had substantiated to the hilt the authenticity of the purchases claimed to have been made from the aforementioned parties, therefore, no disallowance qua any part of the impugned purchases was called for in its hands. We, thus, in the backdrop of our aforesaid deliberations set-aside the order of the CIT(A) and vacate the disallowance of 3% of the impugned purchases that had been sustained by him. The appeal of the assessee is allowed in terms - ITA No. 4528/MUM/2019 - - - Dated:- 12-8-2021 - SHRI S.RIFAUR RAHMAN (ACCOUNTANT MEMBER) AND SHRI RAVISH SOOD (JUDICIAL MEMBER) Assessee by : Shri Neelkanth Khandelwal, A.R Revenue by : Shri Sanjay J.Sethi, D.R ORDER PER RAVISH SOOD, J.M: The present appeal filed by the assessee is directed against the order passed by the CIT(A)-21, Mumbai, dated 22.05.2019, which in turn arises from the order passed by the A.O u/s 143(3) of the Income Tax Act, 1961 (for sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed its return of income for A.Y. 2013-14 on 21.09.2013, declaring an income of ₹ 10,37,450/-. The return of income filed by the assessee firm was initially processed as such u/s 143(1) of the Act. Subsequently, the case of the assessee firm was selected for scrutiny assessment u/s 143(2) of the Act. 3. During the course of the assessment proceeding, the A.O was in receipt of information from the DGIT(Inv.), Mumbai, wherein it was conveyed that search and seizure proceedings conducted on Shri Bhanwarlal Jain and his group concerns had revealed that the assessee as a beneficiary had obtained accommodation entries of bogus purchase of ₹ 2,65,25,767/-, as under: Name of the hawala parties Amounts(in Rs.) Prime Star 2,15,16,029/- Mohit Enterprises 50,09,738/- Total 2,65,25,767/- After deliberating at length on the information gathered in the course of the aforesaid search proceedings and the modus operandi that was adopted by accommodation entry providers in general, the A.O called upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be disallowed. In order to buttress his aforesaid claim the ld. A.R took us through the relevant pages of the assessee s paper book (APB). Our attention was drawn to the various letters alongwith the supporting documents that were filed by the assessee with the A.O in order to fortify its claim of having made genuine purchases of diamonds from the aforementioned parties. The ld. A.R took us through the Page 131 of APB, wherein the assessee had furnished before the A.O documents in support of the authenticity of the purchases in question, viz. copies of the ledger account of the parties, copies of the invoices, copies of the bank accounts reflecting the payments made to the aforementioned parties for purchase of goods, copies of the bills (which served the purpose of delivery challans) and copy of the stock register reflecting the purchase/sale transactions in question. It was submitted by the ld. A.R that in order to dispel all doubts as regards the genuineness and veracity of the purchases that were made by the assessee from the aforementioned parties, the affidavits of both of the aforesaid supplier parties were furnished with the A.O. Our attention was drawn by the ld. A.R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dummy businesses. As observed by us hereinabove, the assessee in the course of the assessment proceedings had furnished supporting documentary evidence to substantiate the authenticity of the purchases claimed to have been made from the aforementioned parties. Nowhere in the assessment order, the A.O had arrived at an observation that the assessee had failed to place on record any specific document that was called for by him in order to verify the authenticity of the purchase transactions in question. On the contrary, we find that the assessee had not only on the basis of supporting documentary evidence substantiated the genuineness and veracity of the purchases which were made from the aforementioned parties, but had also filed the affidavits of both the parties, viz. (i) Shri Gautam, proprietor of M/s Mohit Enterprises, 407, Devratna Apartment, Ram Pura, Main Road, Surat, 795 063; and (ii) Shri Shreyansh, partner of M/s Prime Star, 204 Vaibhav Chambers, Rughnathpura Main Road, Surat 395003. On a perusal of the aforesaid affidavits, we find, that both the said parties after duly identifying themselves along with their other credentials had categorically admitted the sales mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t now when the assessee had not only substantiated the authenticity of the purchases claimed to have been made from the aforementioned parties on the basis of supporting documentary evidence which had not been dislodged by the lower authorities, but had also got the confirmations from the respective parties alongwith their affidavits , therefore, there could have been no justification in the absence of any material proving to the contrary to doubt the genuineness of the purchases claimed by the assessee to have been made from the aforementioned parties. Our aforesaid view is fortified by the order passed by the Tribunal in the case of M/s Sejal Export (India) Vs. DCIT, Central Circle-1(2), ITA No. 3854/Mum/2017, dated 04.07.2018. Involving identical facts, we find that in the said case too as the assessee was able to substantiate the authenticity of the purchases which were stamped as bogus by the lower authorities, therefore, the Tribunal adopting a holistic view had vacated the addition that was sustained by the CIT(A). Accordingly, in the backdrop of the aforesaid facts, we are of the considered view that as the assessee had substantiated to the hilt the authenticity of the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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