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TMI Blog2023 (2) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... f bogus purchases from benami concerns berated and managed by Bhanwar Lal Jain. 2. On the facts and the circumstances of the case the Ld. CIT(A) has erred in law in deleting the addition of Rs.2,87,58,7451- made by AO as the assessee has not substantiated that purchases made are genuine. 3. On the facts and the circumstances of the case the Ld. CIT(A) has erred in law in deleting the addition without giving any evidence which leads to conclusion that there were purchases from the parties. 4. On the facts and the circumstances of the case the Ld. CIT(A) has erred in law in deleting the addition without appreciating the fact of the case." 5. In this case, AO noted that DDIT, Investigation Wing, Murthal vide letter dated 13.03.2014 informed that search and seizure was carried out under section 132 of the Income-tax Act, 1961 (for short 'the Act') in M/s. Bhanwar Lal Group of companies wherein it was established that Shri Bhanwar Lal Jain along with his sons Shri Rajesh Bhanwar Lal and Shri Manish Lal Bhanwar was operating and managing 70 benami concerns in the names of their employees through which they provided accommodation entries of unsecured loans and purchases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning by observing as under:- "I have considered the submissions made on behalf of the assessee. I have also perused the satisfaction as recorded by the Assessing Officer. The fact that Banwari Lal Group was indulging in accommodation entries was not in the knowledge of the Assessing Officer at the stage of the original assessment proceedings. The fact of the Appellant being served by the Banwari Lal Group came to the knowledge or the Assessing Officer only after the conclusion of the assessment proceedings. Once that information was received by the Assessing Officer from the Investigation Wing he perused the same and found in that context, that facts had not been fully and truly disclosed at the time of original assessment by the assessee. The information as received by the Assessing Officer is apparently specific and categorical. The Assessing Officer has recorded a clear satisfaction on this point. The Hon'ble Supreme Court in ALA Firm vs. CIT (1991) 189 ITR 285 has ruled that a subsequent reopening or a case would be valid in the event of the information reaching the Assessing Officer after the assessment. The information communicated by the Investigation Wing was fresh an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not pointed out any defect or discrepancies in any of these statements. 5. Copies of the Ledger accounts showing the purchase made and the payments made against such purchases, copies of the Bills for purchases made from the parties mentioned in the Annexure A, annexed to the Form, recording the reasons for reopening, have already been submitted, in our earlier submissions. Copies of the relevant portion of the bank statements, showing the payments made against such purchase, have also been submitted. Thus assessee has discharged its primary onus, no addition should be made with regard to purchases, as held in the case of ITO Vs Permand (2007) 107 ITJ 395 (Jd.) (Trib.). 6. Further, whatever goods had been purchased, from above mentioned parties, were entered in the stock register, maintained by the assessee and as when sales were made against these purchases, the quantity so sold has also been entered in the stock register. In this connection, your kind attention is drawn to the case ITO Vs. Surana Traders (2005) 92 ITD 212 (Mum.)(Trib.), where the Hon'ble Tribunal has held that" Where a quantitative tally of sales, are furnished, even if the purchases are not available, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which all predecessors have approved. On merits also there is no substance in the action of the AO. All the above actions as proposed being erroneous, superfluous, unnecessary and unmerited must be quashed". 10. Considering the above, ld. CIT (A) found that the transactions were through banking channels and assessee submitted the copy of stock register containing quantitative details, copies of bills of the persons to whom the above purchased goods were sold in addition to the summary of party-wise purchases and sales. Further he observed that AO has not rejected books of account despite the fact that he held the purchases to be bogus. Further, he observed that so far as genuineness of transactions with M/s. Ankit Exports, Prime Star, Mohit Enterprises and Parvati Exports are concerned, assessee submitted all the documents and evidences proving the genuineness of the purchased, the addition cannot be made merely on the basis of statement of the third party, which has not been allowed to be cross examined by the assessee. Ld. CIT (A) further referred to case laws relied upon by the assessee as under :- "The Hon'ble Gujarat High Court in the case of Commissioner of Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee relied upon the order of ld. CIT (A) and placed reliance upon the order of Hon'ble Gujarat High Court in the case of CIT vs. Bholanath Poly Fab (P.) Ltd. (2013) 355 ITR 290 (Guj.). 14. We find that as per the report of Investigation Wing, M/s. Bhanwar Lal Group of companies were engaged in bogus transactions of accommodation entries of sales and purchases of share capital and unsecured loans. However, in the present case, AO was informed that these are purchases from the concerned companies. Without making any further enquiry, AO simply based upon the investigation report treated the entire purchases bogus and added the same. AO did not doubt the sales. AO also did not issue any notice to any of the parties for making any enquiry. Upon assessee's appeal, ld. CIT (A) confirmed the reopening of assessment but deleted the addition on the ground that assessee has supplied all the documents, records are also there and sales are not doubted. 15. In this background of the case before us, admittedly assessee in this case has engaged in bogus purchase entries while sales have not been doubted. When sales are not doubted purchases alone cannot be disallowed at 100%. Making purchases ..... X X X X Extracts X X X X X X X X Extracts X X X X
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