TMI Blog2018 (9) TMI 2075X X X X Extracts X X X X X X X X Extracts X X X X ..... ndra Jain the AO may examine it afresh. Disallowance of interest - Assessee had advanced interest free amounts to some concerns and hence the AO disallowed interest expenditure - HELD THAT:- Since the co-ordinate bench has considered an identical issue in AY 2011-22 [ 2017 (10) TMI 160 - ITAT MUMBAI] and restored the same to the file of the AO, following the said order of the Tribunal, we restore this issue to the file of the Assessing Officer with similar directions given by the Coordinate Bench of the Tribunal in A.Y. 2011-12. - ITA No. 4393/Mum/2017 (A.Y.2009-10), 4568/Mum/2017 (A.Y.2010-11), 4620/Mum/2017 (A.Y.2012-13), 4671/Mum/2017 (A.Y.2013-14), 6139/Mum/2017 (A.Y.2009-10), 6150/Mum/2017 (A.Y.2010-11), 6151/Mum/2017 (A.Y.2012-13), 6152/Mum/2017 (A.Y.2013-14) - - - Dated:- 24-9-2018 - Shri B.R. Baskaran (AM) Shri Ravish Sood(JM) Assessee by : Ms. Apurva R. Shah Shri R. Muralidhar Department by : Shri Nishant Somaiya O R D E R Per Bench :- These cross appeals are directed against the orders passed by the learned CIT(A)-18, Mumbai and they relate to A.Ys. 2009-10, 2010-11, 2012- 13 2013-14. Since issues urged in these appeals are iden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 3% and hence both the parties have filed these appeals before us. 8. At the time of hearing, learned AR submitted that the Coordinate Bench of the ITAT has already passed the order for A.Y. 2011-12 in ITA No. 1045/Mum/2015 dated 13.4.2018. The Tribunal took note of the fact that suppliers had appeared before the Assessing Officer and admitted in the statement taken from them on oath that they had sold goods to the assessee. Further, they have also filed affidavits supporting their contentions. The Tribunal also took note of the fact that the assessee had exported entire goods and there was no local sale. Under these set of facts, the Tribunal following the decision of the Coordinate Bench in the case of M/s. Imperial Imp Exp. (ITA No. 5427/Mum/2015 in A.Y. 2009-10) deleted the entire addition made by the Assessing Officer. Learned AR submitted that the facts are identical in the present case. Referring to the assessment order passed by the Assessing Officer for A.Y. 2009-10, more particularly paragraph 4.5 of the assessment order, learned AR submitted that the assessee has produced proprietors/directors of the companies namely Mr. Rajendra Jain, Mr. Dharmichand Jain and Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing observations:- 6.We have heard the rival submissions and perused the material before us. We find that the assessee is engaged in the business of manufacturing of studded gold jewellery and plain gold jewellery, that during the year under consideration it had exported its manufactured goods, that it did not sell goods locally, that the AO had not doubted the sales, that the suppliers had appeared before the AO and admitted that they had sold the goods to the assessee, that they had filed affidavits in that regard. We find that DJ had admitted of issuing bogus bills. But, nowhere he had admitted that he had issued accommodation bills to the assessee. In our opinion, there is subtle but very important difference in issuing bogus bills and issuing accommodation bills to a particular party. The difference becomes very important when a supplier in his affidavit admits supply of goods. In this matter, the assessee had made no local sales and goods were exported, as stated earlier. So, as far as sales are concerned there is no doubt about the genuineness of such sales. It is also a fact that suppliers were paying VAT and were filing their returns of income. In response to the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al before the First Appellate Authority(FAA).Before him, the assessee made elaborate submissions and relied upon several case laws. Before him, it was argued that the assessee had filed ledger copies of the parties, sales details, that the purchases were fully backed by authenticated invoices, that she had made payment through banking channels, that the stock register and the consumption chart showed the nexus between the purchases and the sales made by the assessee, that details of closing stock were available on record, that there was no evidence to prove that assessee had received back the money in cash, that the AO had not rejected the books of account of the assessee, that the assessee was maintaining quantitative details of purchase and sales, that the AO had not pointed out any specific defects in the books maintained by her. After considering available material, the FAA held that the AO had made efforts beyond getting information from the investigation wing, that he had directed the AO to produce the parties, that the supplier were not found at the given addresses, that it was a case of purchases made form bogus parties rather than a case of bogus purchases, that without ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t certain income chargeable to tax had escaped assessment, in as much as, assessee had taken accommodation purchase bills from four parties, totalling to ₹ 77,51,496/-. In the ensuring assessment, the Assessing Officer has held that purchases declared by the assessee of ₹ 77,51,496/- from four parties, detailed in para-1 of the assessment order are bogus purchases. According to the Assessing Officer, assessee did not make actual purchases from such four parties because as per the information received from the Investment Wing, the four parties in question were found to have been VAT dodgers by the Mahrashtra VAT Department. The Assessing Officer noted that since sales have been effected by the assessee, which showed that assessee was actually in possession of goods, the material would have been procured from grey market without bills in order to cover up the purchases, and thus assessee would have taken accommodation bills for purchases from the said four parties amounting to ₹ 77,51,496/-. Accordingly, the Assessing Officer brought to tax the profit margin in relation to such non-genuine purchases, which he computed by applying the rate of 12.5% on the total amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar and Co. V/s. ACIT in ITA No.2959/Mum/ 2014 (A.Y. 2010-11) dated 28/11/2014; (3)DCIT v/s. Shri Rajeev G. Kalathil in ITA No.6727/Mum/ 2012 (A.Y.2009-10) dated 20/08/2014; (4)Shri Ganpatraj A. Sanghavi v/s. ACIT in iTA No.2826/Mum/2013 (A.Y.2009-10) dated 5/11/2014; and (5) Shri Hiralal chunilal Jain vs. Income Ta x Officer in No.4547/Mum/2014 dated 01/01/2016. On this basis, the plea of the assessee is that the entire addition is liable to be deleted. 5. On the other hand, the Ld. Departmental Representative supported the orders of the authorities below by pointing out that the addition has been made on account of the enquiries conducted by the Sales Tax Department of the Government of Maharashtra and no effort has been made by the assessee to controvert such information. 6. We have carefully considered the rival submissions. The entire discussion in the assessment order reveals that purchases from four parties namely Dhruv sales Corporation - ₹ 13,67,640/-; Subhlaxmi Sales Corp. - ₹ 20,20,800/-; Dharshan Sales Corporation - ₹ 9,64,656/-; and Paras (India)- ₹ 33,98,400, totalling to ₹ 77,51,496/- have been treated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... versing his order, we decide first effective ground of appeal (GOA) in favour of the assessee. 12. The Assessing Officer in the instant case has stated that Mr. Rajendra Jain, Mr. Dharmichand Jain and Mr. Anoop Jain have appeared before him. However, it is not made clear as to whether the above said three persons were partners/directors, all the suppliers belonging to Rajendra Jain. The purchases made from companies, where these three persons are either partner/director, shall be aware by the above said decision rendered by Coordinate Bench. The purchases made from other companies, however requires fresh examination. Accordingly, we restore the issue relating to addition on account of bogus purchases made in all the years under consideration to the file of the Assessing Officer with the direction to delete the addition relating to purchases made from companies, in which above said three persons are partner/director. In the respect of purchases made from other concerns belong to Mr. Rajendra Jain the Assessing Officer may examine it afresh. 13. In A.Y. 2013-14, the Revenue has raised one more ground relating to disallowance of interest. 14. Learned AR submitted that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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