9911796707
TMI Blog2025 (5) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... .2022 passed u/s 143(3) r.w.s 144B of the Act pertaining to assessment year 2021-22. 2. As per the grounds of appeal, the assessee has challenged the additions of INR 98,40,545/- towards bogus purchases and consequent disallowance under s. 37 of the Act. 3. Briefly stated, the assessee is a proprietor of 'Shri Ram Agency' and is engaged in trading activities of ferrous and non-ferrous metals. The assessee filed its return of income for AY 2021-22 in question and declared a total income of INR 78,72,920/-. The return filed by the assessee was subjected to regular assessment under s. 143(3) r.w.s 144B of the Act. The AO in the course of assessment proceedings, made enquiries towards bonafides of purchase made by the assessee from various pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on by him during the FY 2020-2021. Please also confront him with copy of bank statements submitted by us. As already submitted that we purchased the goods from various market suppliers. We made the payment in the name of the concern of which bill is provided by the suppliers for the goods received by you. (Emphasis supplied) As already submitted I am a trader and not a manufacturer. The goods purchased by me have been sold. There cannot be a sale without the corresponding purchase. I have already submitted complete stock register/details (both quantity wise as well as amount wise) of opening stock, purchases, sales and closing stock. " 5. The AO however observed that the purported supplier namely M/s. Elegant Impex has denied the suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO is hereby confirmed. Accordingly ground of appeal no.3 raised by the appellant is hereby dismissed." 7. When the matter was called for hearing, the Ld. Counsel for the assessee pointed out that in support of the purchase recorded in the books, the assessee has filed documentary evidences such as; (a) copy of ledger account of Elegant Impex. (b) copy of bill/e-way bill of purchase (c) copy of bank statement reflecting the payment to Elegant Impex. (d) copy of extract of stock register showing purchase from Elegant Impex and subsequent sales (e) copy of bill of sales. 7.1. The Ld. Counsel for the assessee pointed out that noticeably, the assessee is only a trader as distinct from manufacturer, meaning thereby, the goods purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing any business currently, and does not per se deny the transactions occurred in the relevant to FY 2020-21. The AO, has infact, made enquiry from the transport agencies and found no error in the transportation of goods carried out and therefore, did not discuss this aspect in the assessment order. The Ld. Counsel submitted that the trader has no control in such a situation. The assessee trader has received the goods and made the payments and established the transportation and also made the sales in the market. Therefore, the chain of transactions carried out is complete. There could be variety of reasons for a supplier to deny the transaction. The AO has not made proper enquiries and has simply accepted the version of the supplier as gosp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgements have been rendered in the context of applicability of s. 69C of the Act which deals with nature and source of payment of expenditure. In the instant case, the source of payment made towards purchase is not in question at all. In the captioned appeal, the additions have been made with the aid of s. 37(1) of the Act which deals with the allowability of expenditure for which business purpose test is applicable. The Ld. Counsel also referred to the decision of the Co-ordinate Bench of the Tribunal in the case of DCIT vs Surender Kumar Jain in ITA No.931/Del/2024 order dated 23.04.2025 wherein the issue has been adjudicated in favour of the assessee in similar facts and situation. The Ld. Counsel also submitted that half baked invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the transporter name etc. and payment to the supplier through banking channel, the Revenue has blindly relied upon a simplicitor denial made by the supplier which is apparently quite vague and cryptic in the sense that the supplier merely writes that he is not engaged in the business 'currently'. As per reply, the supplier does not deny to have supplied any goods in FY 2020-21 per se. No affirmative denial is available with regard to factum of payment made to the supplier through banking channel. Besides, the goods have been demonstrated to have been actually transported. 10.2. Furthermore, one cannot fathom the factum of sales without corresponding purchases particularly in the case of a trader assessee. The sales recorded has neither ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
