TMI Blog2015 (5) TMI 1256X X X X Extracts X X X X X X X X Extracts X X X X ..... urce of such credit, in which these amounts arose are credited. Since the amounts were not credited in the impugned A.Y., therefore, in view of the decision of Sridev Enterprises [ 1991 (1) TMI 52 - KARNATAKA HIGH COURT] we confirm the order of the CIT(A) deleting the said addition. Bogus purchase - Notice issued u/s 133(6) was sent, which was returned unserved - CIT(A) deleted the addition - HELD THAT:- As noted that in this case the sales shown by the assessee has duly been accepted by the AO. In our opinion, the assessee cannot make the sales until and unless the purchase has been made by the assessee. AO has not rejected the books of accounts but made the addition towards the bogus purchase. The payment has been made to these part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contradict the report of the inspector. The AO, therefore, treated these sundry creditors, which were coming from the earlier year as bogus creditors and added in the income of the assessee. The assessee went in appeal before the CIT(A). The CIT(A) deleted the addition by observing as under: 2.2 The submissions of the Appellant have been considered and it is seen that the balances in respect Pancha Deep Impex Enterprises and Jiarjee Corporation have been brought forward from earlier years and are not in respect of the current year s liability for purchases made during the year. It has also been submitted that these balances were verified by the A.O. in the Assessment Proceedings for Assessment Year 2005-06 and photocopies of letters o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nataka High Court in the case of CIT-vs- Sridev Enterprises 192 ITR 165, we confirm the order of the CIT(A) deleting the said addition. 4. Ground no.2 relates to the deletion of addition of Rs.29,76,218/- in respect of bogus purchase. Facts relating to this ground are that the AO noted that the assessee has made the purchase from the two parties, one from M/s. Shib Shankar Trading Co. to the extent of Rs.16,69,553/- and another from Krishna Trading Co. for Rs.13,06,665/-. Notice issued under section 133(6) was sent, which was returned unserved. The Inspector was deputed to carry out the enquiries. The Inspector submitted in his report that these concerns could not be traced out at the given address. When countered, the assessee submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of Rs.32,90,243/- had been made in the same period and there was only a balance of Rs.86,173/- on 31.03.2008 and that these payments are reflected in the Bank Accounts of the Appellant. The A.O has, however, claimed that the alleged transaction is not genuine on the basis of deposition of the Proprietor, M/s Shib Shankar Trading Co. alleging that this person did not produce any books of accounts or copy of Income Tax Return reflecting the transaction claimed to have been made from him as well as the fact that this person was unable to give details of the business being conducted by him. It is also seen that this person not only having a PAN No but also registered with the Sales Tax Authorities for trading of C.I casting and pipe fit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejected. It is clear that in case of trading the rejection of purchases would impact the sales and this fact has been ignored by the AO. Therefore even if the submissions of the Appellant are only corroborative in nature in respect of the transaction i.e. purchases added back by the AO the entire disallowance is not justified considering the AO has neither estimated profit nor has he established that the payments to these two parties were not genuine. Accordingly the addition made towards alleged bogus purchases from M/s. Krishna Trading Co. of Rs.13,06,665/- + Rs.16,69,553/- from Shib Shankar Trading is deleted. (Relief Rs.13,06,665/- + Rs.16,69,553/-). 5. We heard the rival submissions and carefully considered the same. We noted t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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