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TMI Blog2013 (5) TMI 474X X X X Extracts X X X X X X X X Extracts X X X X ..... ilk Industries' at Mumbai. He filed his return of income for the year on 25.11.2003, declaring an income of Rs.1,47,487/-. In the assessment proceedings u/s.143(3), the Assessing Officer (A.O.) found difference in purchase of grey fabric from two parties, which were at a total of Rs.2,39,066/-. The assessee being unable to explain the difference, the same were added as 'unexplained expenditure' u/s.69C. Further, as the purchase of grey fabric from two other parties, aggregating to Rs.13,29,675/-, also could not be confirmed by the assessee, the same were, therefore, inferred as un-genuine, and disallowed. The assessment was accordingly framed at Rs.17,24,230/-. The same was confirmed by the first appellate authority. The tribunal, while noting that the assessee had failed to discharge the onus to prove the purchases; the notices to the two parties u/s.133(6) having been returned unserved, with the assessee having also failed to produce them, was, however, of the view that in the totality of the facts and in the interest of justice, the assessee ought to be allowed one more opportunity to substantiate its claim with evidence. The relevant part of its order (supra), reads as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d which are principally located at Vapi, under Palghar or Padi jurisdictions. The goods are, thus, subject to transportation and also suffer excise on their processing, which would be apparent from the perusal of the relevant bills issued by the sellers of the grey fabric, as well as that by the process houses. For this, he would take us to the different pages of the paper-book (PB-I(A), viz. 39, 40-45). All the payments have been made by cheques. Under these circumstances, there is nothing to infer anything of the payments being bogus or the purchases being not genuine. How could the purchases could be so treated, he asseverated, when the sales have not been doubted, as there can be no sales without corresponding purchases. With regard to the difference in the purchases from the two other parties, which constitutes the second issue under reference, the purchases per the assessee's books are higher in the case of one party (at Rs.1,73,395/-), while lower for the other (at Rs.65,671/-). The Revenue, however, has added both of them, while surely the nature of the difference should lead to opposite inferences. The fact of short purchases only implies that the assessee had returned a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from whom purchases of wool stood made were nomadic. The law in the matter is trite, and the onus to prove the genuineness of its transactions qua which claims are made per the return of income, is only on the assessee. In CIT vs. La Medica [2001] 250 ITR 575 (SC), the Hon'ble Delhi High Court discounted the tribunal's view allowing purchases on the ground that even if not made from the stated suppliers, the same would have been made from others, as the sales had in any case been made. Once it was found that the supplies were not made by the person to whom the payments were alleged to have been made, the question whether the purchases were made from some other source could not have weighed with the tribunal as a factor in favour of the assessee. The conclusions drawn by the tribunal were clearly erroneous and contrary to the material on record, arrived at without taking into consideration the relevant materials and relying on irrelevant material. 4.2 The assessee's claim that a mere non response from the parties to notice/s u/s.133(6) cannot lead to the inference of the purchases being bogus or non-genuine is also not without substance. Even as pointed out by the hon'ble high co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said premises were left by them. Neither the assessee nor the Revenue has undertaken any exercise in this regard. Clearly, therefore, both the existence as well as the identity of the payee, both of which are crucial to arrive at the decision with regard to the genuineness of the purchases and, in fact, constitute the basic or primary information, is not known. The primary onus to establish the same is without doubt only on the assessee. 4.4 Next, we may consider the assessee's plea that an inference as to the purchases being not genuine may not be forthcoming in view of indirect evidence qua the impugned purchases, viz. the transportation and the processing of the goods, even paying excise on such processing and, finally, disposal by way of sale by the assessee. We find, even as pointed out by the ld. DR, no finding in this regard, with the assessee not even raising a plea toward the same before the authorities below. So, however, the documents, viz. the bills with reference to which the same stands argued before us, is definitely on record, forming part of the assessee's paper-book (PB-I(A)). Further, we are conscious and aware that the instant proceedings are in consequence t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th lower and higher in the two cases respectively, i.e., with reference to the corresponding sales as recorded by the other transacting party. At the minimum, therefore, what is required is to supply the copy of the account statement of the assessee's ledger account as appearing in the books of the suppliers to the assessee, providing it an opportunity to either explain or rebut the differences. When the assessee's accounts are considered as incorrect on the basis of the accounts of the corresponding party, the same becomes a material with the Revenue on the basis of which the assessee's books of account are being impugned by it. It was, therefore, incumbent on the Revenue to provide the assessee the same, which it has failed to, despite, as we observe, repeated requests by the assessee for the same, as gathered from the statement of facts, as filed both during the course of proceedings in the first and the second round, as well as the arguments made before us. 5.2 We have already restored the matter back in respect of the first issue. Under the given circumstances, we only consider it fit and proper that this issue is also likewise restore back, though to the file of the A.O., to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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