TMI Blog2015 (1) TMI 1506X X X X Extracts X X X X X X X X Extracts X X X X ..... urchases cannot be disallowed. Accordingly, we set aside the order of Authorities below and decided the issue in favour of assessee. - SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER For the Appellant : Sri Ravi Tulsian, FCA For the Respondent : Smt. Madhu Malti Ghosh, JCIT, DR ORDER PER SHAMIM YAHYA, ACCOUNTANT MEMBER:- This appeal by the assessee is directed against the order of Commissioner of Income-tax (Appeals), Siliguri dated 19-01-2010 and pertains to assessment year 2001-02. 2. Ground raised read as under:- 1. That the Ld. CIT(A) erred in sustaining the addition of Rs. 18,64,605/- treating the purchases of Rs. 9,64,605/- made from M/s Bhiwani Enterprises and Rs. 9,00,000/- made from M/s Shivm Trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bihar. During the year, the aggregate purchases of rice from this supplier was ₹ 9,64,605/- and almost all the payment were made through banking channels except ₹4,605/- only which was paid in cash. Both opening and closing balance were nil . Shivam Trading Co: The detailed address of this party was given as : Shivam Trading Company, Saiyadraja, Chandauli, UP. The aggregate purchase of rice was ₹9,00,000/- and the full payment was made through demand Draft issuing one cheque No. 521652 dated 25.01.2001. The opening and closing balances were nil . In response to the letter issued to the assessee, the assessee submitted that all the payments were made in the FY 2000-01 against the purchases made during the financial year. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details given in audited statement of accounts were also referred. 4. It was explained to the AO that as the export of any commodity is directly under the control of custom s authority and RBI, hence the quantity of any commodity exported cannot be manipulated. When the export is supported by evidences, there must be corresponding purchases also. In view of this fact, the quantitative details as submitted by the assessee must be taken as correct. 5. Copy of Sales Register maintained by the assessee as per the guidelines of RBI. 6. Statements of account of both the parties as per the books of account were filed. The statements have clearly shown that the payments were made through DD. In support, bank statements were also filed. 7. It was e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents were made to one M/s Pawn Traders and M/s Govind Nagar Sugar Ltd. from whom no purchase was made. When the Ld. CIT(A) asked the assessee to submit comment in this regard Ld. Counsel for the assessee submitted that as per the usual practice in the business, the payments are made to some other persons on the instruction of the suppliers. This type of instruction is generally given to avoid bank charges and make the payment fast. If a supplier has to make any payment to his own suppliers, he usually gives instruction to his buyer to send the draft directly in favour of his own supplier. In such cases, the supplier can avoid bank charges and simultaneously, the delay of 2/3 days requires in banking channels. This was the common practice up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pening and closing stock have also not been disputed. Adverse inference is only drawn on the ground that no response came from the suppliers when letter was issued to them and adverse inference has also been drawn on the ground that payment was made to third party. In our considered opinion, the adverse inference drawn by the Authorities below in this case cannot lead to disallowance of purchase. This is because the purchases have been exported and the export has not been denied by the AO. The purchases bills were stamped by the Sales Tax Check posts. The purchase and consequent export also go thorough examination by the Custom Authority. Hence, we agree with the assessee that when the export of commodity is under control of Customs and Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her place reliance upon the judgment of jurisdictional High Court in the case of Mather Platt (India) Ltd. v. Commissioner of Income-tax [168 ITR 493] wherein the Hon ble High Court held that in respect of commission paid to S and V, the assessee had established that in 1974 it was in correspondence with the agents. The assessee had paid commission to the said agents in one case by bank draft and in the other by an account payee cheque. The only fact on the basis of which the Tribunal had proceeded was that four year after the transaction, summons issued to the agents had come back unserved. On the entirety of evidence, it could not be held that merely because a person was not found in the address after four years, the person was non-existe ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
