TMI Blog2023 (1) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent had satisfactorily discharged the initial burden of proving the genuineness of the transactions. We are of the considered opinion that this is not a fit case for consideration in appeal as the substantial questions of law proposed by the revenue would not arise. - DHIRAJ SINGH THAKUR AND VALMIKI SA MENEZES, JJ. For the Appellant : Mr. Suresh Kumar, Advocate. For the Respondent : None JUDGMENT : (PER : VALMIKI SA MENEZES , J.) This is an appeal under Section 260A of the Income Tax Act 1961 ( the Act ), impugning order dated 31.03.2017, passed by the Income Tax Appellate Tribunal, Mumbai ( the Tribunal ), which while dismissing the appeal of the revenue, has upheld the order dated 10.05.2013 of the Commissioner of Income Tax (Appeals), Mumbai, which directs deletion of the disallowance for the amount of Rs.4,99,27,664/- under Section 69C of the Act, as was directed by the Assessment Officer under his order dated 25.02.2013. 2. The appeal is sought to be admitted on the following substantial questions of law : 5.1 Whether in law and on the facts and circumstances of the case, was the Hon ble Tribunal justified in upholding the orders of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice had not replied thereto. That spot enquiries were made by the Income Tax Department at the addresses of the said 21 suppliers and during the enquiries, it was revealed that no business was carried out from the premises, and in view of that fact, the assessee was called upon to show cause why purchases from the said 21 suppliers should not be treated as fictitious purchases. 6. Relying upon certain statements of the proprietors of the 21 Firms referred to in the notice, and since none attended or made any submissions on behalf of the assessee after receiving a show cause notice, the Assessing Officer presumed that the assessee had nothing to say and that the said purchases should be treated as his income. He passed the assessment order dated 25.02.2003, treating the entire amount of Rs.4,99,27,664/- as unexplained expenditure under the provisions of Section 69C of the Act, and added this amount to the total income of the assessee, and in consequence of this order, initiated penalty proceedings under Section 274, read with Section 271(c) of the Act, for furnishing inaccurate particulars of income and conceal income. 7. On the Respondent challenging the order of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such payments had been realized. The assessee has also specifically taken a ground in the appeal that his statement alleged to have been taken by the Sales Tax Department, but was never supplied or furnished to him to enable him to deal with their content, and further, that such statements would have no legal sanctity to prove that the purchases made by the assessee were fictitious. 11. The Commissioner of Income Tax (Appeals) at Mumbai, considering this ground and the material on record, and has arrived at a specific finding, firstly that the Respondent herein had already shown gross profit and net profit in his accounts, which were duly accepted by the Assessing Officer, and therefore, in the absence of rejection of any book entries, such huge additions of Rs.4,99,27,664/- were not tenable at law. The Appellate Authority has further, on consideration of the material before the Assessing Officer, come to a conclusion that in the absence of Assessing Officer issuing any summons to the 21 suppliers alleged to have fictitious transactions with the assessee, and in the absence of the copies of the statements recorded by the Sales Tax Department being furnished to the Respondent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessment Officer and in that light, merely because the names of such parties were found on the official website of the Sales Tax Department of the Government of Maharashtra would by itself not be sufficient to prove that the transactions were bogus. The Tribunal has held that the Respondent had sufficiently discharged the burden of proving the transactions. 14. The Tribunal has also referred to the judgment of this Court in the case of The Commissioner of Income Tax-1, Mumbai ..V/s.. M/s . Nikunj Eximp Enterprises Pvt. Ltd. , dated 17.12.2012, in Income Tax Appeal No.5604 of 2010 and applying the ratio therein, dismissed the appeal. 15. Section 69C of the Income Tax Act, reads as under : 69C. Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year. The provisions would be attracted to a case where the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases, and copies of bank statements indicating that purchases were made, has held as under : 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 in fact 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. The Assessing Officer as well as CIT(A) have disallowed the deduction of Rs.1.33 crores on a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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