2015 (6) TMI 144

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..... made in the course of the business by the assessee for AY 2007-08. 2. The assessee used to deal with electronic articles. In the normal course of its business it used to procure unbranded electronic items and sell them. In the scrutiny assessment, the Assessing Officer added Rs. 3,62,49,274/- after rejecting the assessee's explanation with regard to the purchase made from nine named parties. It was held that these were bogus transactions and that the assessee could not report any satisfactory explanation. The AO was guided by the fact that the sellers/vendors of the items purchased by the assessee had not responded to notices under Section 131 and also relied upon the report of the Income Tax Inspector in that regard. In the appeal, th .....

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..... ere their assessed turnover for FY 06-07 is at a much higher figure than the amount for which they have sold goods to the appellant. The PAN, Ration Card, Passport, Driving License etc. are also reported to be available on Sales Tax records. From these documentation and the fact that these parties are having bank accounts where the payments received in the subsequent F.Y. from the appellant has been deposited goes on to establish the identity of these parties. As to the reason why these parties, who have not filed Income Tax Returns for AY 07-08, have not appeared before the Income Tax Authorities is a matter best known to them. The question however remains whether the appellant could be held accountable in as much as the entire purchase .....

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..... The findings of the CIT (A) on both counts were upheld by the ITAT. 4. The Revenue urges that the ITAT in the circumstances of the case fell into error in not seeing that the directions to the nine parties would be termed as genuine consideration and that none of them had responded during the assessment proceedings. Most of them had closed down their businesses and some reliance on certain sales tax assessments was inconclusive as to whether the underlined transactions claimed by the assessee were genuine. It is also pointed out that the ITAT itself noticed that the CIT (A) had not decided the issue finally. To say so, counsel relied upon paragraph 8.1 of the impugned order. 5. We have carefully considered the submissions of the parties. .....

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