9911796707
TMI Blog2019 (4) TMI 2153X X X X Extracts X X X X X X X X Extracts X X X X ..... and gross profits as well as remand report; stand perused. 2. We advert to Revenue's sole substantive grievance in former and third identical ground raised in latter appeal seeking to reverse CIT(A)'s action deleting bogus purchases disallowances / addition(s) of Rs.73,35,068/- and Rs.46,56,078/-; respectively. There is no dispute that the Assessing Officer had taken recourse to the impugned disallowance(s) after getting information that the five payee parties M/s Sampark Steel, Prayan Trading Co, Bhagwati Trading Co, Sriji Traders & Vitrag Trading Co, in former and Vats Corporation and Bhagwati Trading Co in latter assessment year; respectively had provided purchase entries to this taxpayer. The said information had come to the Assessing Officer on the basis of investigation conducted by Maharashtra State Sales Tax Department/VAT. He disallowed the impugned purchases therefore on the ground that the assessee had failed to prove genuineness thereof during the course of assessment(s) in issue. The CIT(A) has reversed the same in his identical lower appellate discussion as follows:- "I have considered the material before me. The A.O received information from the DGIT(Inv.), Mumba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t possible in this trade. It was also averred that the Sales Tax Department at Mumbai had started a drive to collect sales tax from the defaulting parties, wherein above parties had denied the transactions altogether to avoid sales tax payment. The Sales Tax Department prepared a list of such parties along with the parties who made purchases from them to the Income tax Department, which was the sole basis for the impugned disallowance as bogus purchase amounting to Rs. 73,35,068/-, as unexplained expenditure u/s 69C of the IT. Act. It was further averred that the ITAT, Mumbai on similar facts had deleted the additions made in the cases of the sellers Mumbai Bench-C. in the case of ITO vs. Paresh Arvind Gandhi ITA No.5706/Mum/2013, vide order dated 13.05.2015 has dismissed the department appeal in respect of the purchases made by the assessee from the parties, viz. Bhagwati Trading Company, one of the traders, whose names appeared in the list of alleged "suspicious dealers" prepared by the sales Tax Department, Mumbai for the A.Y 2010-11 under consideration, wherein the purchases made from said Bhagwati Trading Co, have been accepted as genuine by the Hon'ble ITAT, which held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the ratio of the cited case laws, I find there is merit in the submissions of the A.R. that the A.O has made the impugned addition of Rs. 73,35,068/- merely on the basis of information from the DGIT(inv), without bringing on record any documentary evidence or adverse finding based on material on record to corroborate the allegation of having made 'bogus purchases' from the above-mentioned five parties, aggregating Rs. 73,35,068/-. Although the appellant had adduced sufficient documentary evidences before the A.O to discharge its initial onus in the form of Purchase Bills, Delivery Challans, Details of vehicle which carried the good, Weighment certificate issued by tile weigh bridge establishment to confirm weight of the goods, Bank Statement showing payment to the supplier by a/e payee cheques. Transporter's bill for freight charges for vehicles, Payment of freight charges to the transporter by a/c payee cheque; TDS deduction from the freight charges as applicable, and depositing TDS amount, and Stock the onus having shifted to the AO he failed to bring any adverse evidence on record to rebut the presumption of the of the purchases being genuine unless established othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal ITA No.170/Kol/2017 raising the instant sole issue fails therefore. 4. We now come to Revenue's first substantive ground in its latter appeal ITA No.171/Kol/2017 seeking to revive import direct expenses disallowance(s) of Rs.13,36,322/-. The CIT(A)'s findings under challenge qua the instant issue read as follows:- "Ground No. 4: This ground relates to the disallowance by the A.O on estimate of a sum of Rs. 13,36,322/-,being 10% of the expenses incurred under the head 'Import direct expenses'. He has made the disallowance with a biased approach alleging the same as 'bogus expenses. 'This issue is dealt by the A.O. in the Assessment Order as under:- "As per tax audit report the assessee company deals in iron & alloys steel. Total turnover during the year was 32,13,84,266/-, marginally increased compare to preceding year i.e. Rs. 28,15,61,922/-. As per schedule 15 of the balance sheet assessee claimed import direct expenses of Rs. 1,33,63,218/-, whereas in the preceding year it was only Rs. 62,62040/-. The assessee was requested vide snow cause notice date 13.12.13 to substantiate the claim. It appears that the assessee claimed expenses under new heads as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so increased. It will not be out place to mention that in comparison to last year the Turnover has increased (from 28.15 crores to 32.13 crores), Amount- of Net profit has increased (from 6.86 lacs to 25.54 lacs) and Rate of *N.P. has also increased (from 0.24% to 0.79%). A comparative chart is enclosed. While making the estimated disallowance, the learned AO has failed to take these factors into consideration. The disallowance has been made arbitrarily on guess and is liable to be deleted. " I have carefully considered the material before me, the A.O. observed that the total turnover of the company had marginally increased from Rs. 32.13 crores in the preceding year to Rs. 28.15 crores in A. Y. 2010-11 that had claimed that higher import direct expenses of Rs. 1336218/- is compared to Rs. 62,62,040/- in the preceding year. On examining the appellant's reply the A.O. observed that the several heads of expenditure like clearing charges, computer repair, container rent , custom duty, ewe charge, DEPB premium, doc clearing charges, interest paid, service and testing charges and TSC, transportation charges, were claimed during the current A.Y. which were not there in the precedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from recipient side as well. We conclude in these facts that the CIT(A) has rightly concluded that the impugned disallowance merely based on comparison of relevant figures in the two assessment years is not sustainable. This first substantive ground fails in Revenue's latter appeal fails therefore. 6. Next comes unexplained cash deposits addition issue raised in Revenue's second substantive ground amounting to Rs. 13.10 lac. The CIT(A)'s findings in his order under challenge hold that the assessee had filed its ledger account as well as cash flow statement indicating re-deposit of cash sums already withdrawn. Its paper book pages 161 to 163 contain the Assessing Officer's remand report as well not disputing all these clinching supporting evidence. We therefore reject Revenue's instant second substantive ground as well as the latter main appeal ITA No. 171/Kol/2017. We make it clear before parting that assessee had submitted detailed evidence regarding as all three thee issues before Assessing Officer remand proceedings directed by CIT(A). This remand report dated 11.06.2015 forming part of case records before us nowhere disputed assessee's voluminous documentary evidence regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
