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TMI Blog2017 (2) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... rchases”, thereby implying that as per the Assessing Officer assessee has not incurred such expenditure. To hold the transactions as mere accommodation entries and not real purchases is quite different from saying that the sources of expenditure for the purchases from the 7 parties in question have not been explained in the context of Sec. 69C of the Act. Therefore, invoking of Sec. 69C of the Act in the present case to treat the purchases of ₹ 37,45,965/- stated to have been made from the 7 parties in question is on a wrong footing. Thus, on this aspect also, assessee deserves to succeed. - ITA NO. 2651/MUM/2016, CO NO. 197/MUM/2016 - - - Dated:- 30-11-2016 - SHRI G.S. PANNU, ACCOUNTANT MEMBER For The Assessee : Ms. Keyuri Desai For The Revenue : Shri S.R. Kirtane ORDER The captioned appeal by the Revenue and Cross-objection by the assessee are directed against the order of CIT(A)-30, Mumbai dated 8.1.2016, pertaining to the Assessment Year 2011-12, which in turn has arisen from the order dated 25.3.2014 passed by the Assessing Officer, Mumbai under section 143(3) of the Income Tax Act, 1961 (in short the Act ). 2. The captioned appeal and cross ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he suppliers by account payee cheques was not sacrosanct to establish genuineness of the expenditure. For all the above reasons, the Assessing Officer treated the expenditure on purchases of ₹ 37,45,965/- as unexplained expenditure u/s 69C of the Act and added the same to the returned income. 4. The assessee carried the matter in appeal before the CIT(A) assailing the order of Assessing Officer on facts and in law. The assessee explained before the CIT(A) that complete details regarding the purchases made from 7 parties, namely, invoices of purchases made, payments made to the parties by account payee cheques, bank statement evidencing the payments, copy of account of each party, disposal of items purchased from the said parties and the subsequent sales made to various parties, etc. were furnished before the Assessing Officer. The assessee also pointed out that the Assessing Officer had merely proceeded on the information received from the Sales Tax Department of the State of Maharashtra whereas the material furnished by the assessee has been merely disbelieved. The assessee also asserted before the CIT(A) that the Assessing Officer did not provide any opportunity to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontended by the assessee that the necessary details to justify the purchases of ₹ 37,45,965/- from the 7 parties have been furnished by the assessee and thus the onus cast on the assessee stood discharged. It has also been vehemently argued that the assessee had specifically asked for cross-examination of the witnesses, which has been completely denied and, therefore, there is a violation of principles of natural justice and on this aspect itself, the assessment deserves to be set-aside. In support, reliance has been placed on the judgment of the Hon'ble Supreme Court in the case of Andaman Timber Industries, (2015) 127 DTR (SC) 241. 6. On the other hand, the ld. DR appearing for the Revenue has primarily supported the stand of Assessing Officer by placing reliance on the same. The reasoning taken by the Assessing Officer has already been adverted to by me in the earlier paras and, therefore, is not being repeated for the sake of brevity. 7. I have carefully considered the rival submissions. In the instant case, the Assessing Officer has noted that certain information has been received from the DGIT (Inv.), Mumbai that assessee has taken accommodation entries from 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition is susceptible to deletion. 8.1 In this case, another aspect is the non-service of notices issued under section 133(6) of the Act. Notably, after the Assessing Officer found that the notices issued under section 133(6) of the Act have been returned unserved, no attempt was made to shift the onus on the assessee to produce such parties. Therefore, it is not a case where the assessee has failed to produce his witness, but it is a case where the attempt of the Assessing Officer to procure attendance of a witness has not fructified. In fact, non-service of notices issued u/s 133(6) of the Act by itself cannot be a conclusive proof that transactions with the parties are bogus because there was enough material before the Assessing Officer to show that payments have been made to the said parties through banking channels. It required further collection of evidence by the Assessing Officer to prove the bogus nature of such transactions. In fact, the Hon'ble Bombay High Court in the case of Nikunj Exim Enterprises (P.) Ltd., 372 ITR 619 (Bom) has observed that merely because suppliers did not appear before the Assessing Officer, it could not be concluded that the purchases w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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