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TMI Blog2025 (1) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... d proceedings. 3. Brief facts of the case are that assessee is engaged in the business of cloth merchant as a proprietor in the name and style of M/s. Suresh Synthetics. He filed his return on 29.09.2012 reporting total income at Rs. 35,95,489/. Assessment was completed by making the aforesaid two additions mentioned in the grounds raised by the assessee for which ld. AO also rejected the books of account u/s. 145(3). 3.1. In respect of the first ground, ld. AO had noted that assessee had claimed purchases for which amounts remained outstanding during the year. In order to verify genuineness of purchase transaction, notices u/s.133(6) were issued to 17 parties from whom assessee had made purchases. Out of these, notices pertaining to 10 parties were returned back for which the value of purchases totalled to Rs. 3,71,36,606/-. List of these 10 parties is as under: Sr. No Name Purchase Outstanding 1. Vista Trading Co 38,36020 38,36,020 2. United Enterprise 72,44,800 72,44,800 3. M/s Swastik Textile 18,41,424 18,41,424 4. Shamuk Trading P. Ltd. 22,86,875 22,86,875 5. M/s. Royal Traders 5081090 5081090 6. M/s. Ritik Textiles 69,92,500 69,92,500 7. M/s Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 012-13 106 137 5 Documents i.e. Invoices(Purchase), Invoices(Sales), Reflecting Quantity and Particulars of Goods, along with proof of Exports, Bankers Realization Certificate For The Amount of Purchases disallowed to the tune of Rs.3,71,36,606/- by A.O BOX FILE SEPARATELY ENCLOSED 6(i) Documents in respect of Interest paid on Loans for Disallowance made u/s-40(a)(ia) :- Copies of Form-15G/15H 138 178 6(ii) Statement of Interest paid on Loans for Disallowance made u/s-40(a)(ia). 179 182 6) Loan Confirmations along with copy of Acknowledgment For Income Tax Return Filed by lenders of Loans in respect of Interest paid on Loans for Disallowance made u/s-40(a)(ia) 183 233 3.4. Assessee also made a detailed written submission in the first appellate proceedings which are reproduced by the ld. CIT(A). In the paper book furnished by the assessee, ld. CIT(A) observed that he has filed additional evidences and thus a remand report was called from the ld. AO by issuing a letter dated 07.06.2016. In this letter, ld. CIT(A) has observed that "The appellant has claimed that these documents were presented in paper compilation during the assessment proceedings. The appellant has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces. Thus, the appeal was dismissed. Aggrieved, assessee is in appeal before the Tribunal. 5. Before us, ld. Counsel for the assessee asserted that assessee is a 100% exporter and all of its sales are subjected to scrutiny by the customs authority when goods cross the boundaries of the country. According to him, movement of goods are under bill of entry along with export invoice, packing list, delivery challan and shipping bills. He also referred to mapping of bill to bill purchase with the export sales made by the assessee as well as bill to bill stock of input and output from all the suppliers reconciling them with opening and closing stock. Statement for this mapping for each of the suppliers is placed in the paper book at page No. 28 to 41, wherein item to item purchased is mapped with the export sales done by the assessee. Ld. Counsel also referred on a sample basis to the other corresponding documentary evidences which includes sales invoice, custom shipping bill for export, bank realisation certificate, bill of lading to demonstrate the genuineness of purchase transactions claimed by the assessee. Ld. Counsel also referred to the ledger accounts of each of the suppliers pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s at the same rate of other genuine purchases." 6. In the present case, since assessee has placed on record all the corroborative documentary evidences which remain uncontroverted and no discrepancy has been found from the said material as well as no defects have been pointed out. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of CIT Vs. Odeon Builders Pvt. Ltd. (2019) 110 taxmann.com 64 (SC), wherein it was held that, where assessee had submitted purchase bills, transportation bills, confirmed copy of accounts and VAT registration of sellers as also their income tax return and payment was made through cheques, impugned purchases cannot be disallowed. According to the ld. Counsel in the present case, there are no VAT implications in the year under consideration since VAT was not applicable on textile. 6.1. On the first issue, we have considered the submissions made before us and perused the material on record along with judicial precedents relied upon. In the tax audit report placed on record, assessee has reported gross profit rate of 6.84% and net profit rate of 1.73%. Ld. AO made 100% addition on account of purchases from 10 parties which were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls, confirmed copy of accounts and payment are made through cheques, then such purchases cannot be disallowed. 6.3. In the given set of facts as discussed above in detail and considering the judicial precedents referred above, we delete the addition made by the ld. AO in respect of purchases made from the 10 parties which were held as non-genuine purchases, since nothing cogent have been brought on record to controvert the corroborative documentary evidences placed on record and pointing out any discrepancies or defects in the same. Accordingly, ground no.1 taken by the assessee is allowed. 7. On the second issue, ld. Counsel asserted that interest was paid by the assessee on the unsecured loans obtained by him. The loan transactions are not in dispute. In fact, even the interest expense is also not in dispute. Disallowance has been made u/s. 40(a)(ia) for not furnishing Form-15G/H though according to the assessee, these have been furnished before the authorities below. Assessee has placed on record, loan confirmation letters from the parties to whom interest payments have been claimed. Assessee has placed on record Form - 15G/H in the paper book before us along with details of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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