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TMI Blog2016 (7) TMI 1255X X X X Extracts X X X X X X X X Extracts X X X X ..... essed Income(Rs. ) 2006-07 19. 10. 2006 Rs. 1, 91, 305/- 28. 01. 2014 Rs. 43, 89, 860/- 2007-08 17. 09. 2007 Rs. 2, 07, 200/- 28. 01. 2014 Rs. 20, 10, 170/- ITA No. 4626/Mum/2014 (06-07): 2. Effective Ground of appeal is about not sustaining the addition made, u/s. 69 of the Act, by the AO. In this case the original assessment was completed u/s. 143(3)on 16. 9. 08, determining the income of the assessee at Rs. 2. 21 lakhs against the returned income of Rs. 1. 19 lakhs. Later on, based on the information gathered during survey operation at the business premises of Rakeshkumar M. Gupta (RMG), proprietor of Manoj Mills and Group concerns the AO reopened the case invoking the provisions of section 147. During the assessment proceedings the AO found that assessee had made purchases from M/s. Shreeram Sales & Synthetics (Rs. 14. 75 lakhs) Manoj Mills(Rs. 12. 56 lakhs), and M/s. Astha Silk Industries (Rs. 14. 37 lakhs). All these entities were controlled by RKG. The AO directed the assessee to substantiate the genuineness of said purchases with documentary evidences and to explain as to why the said purchases made from above mentioned three parties should not be treated as bog ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GP in recording the said purchase as well to plug any leakage of revenue. He upheld the addition of Rs. 4. 16 lakhs and deleted the addition of Rs. 37. 51 lakhs. 4. Before us, the Departmental Representative (DR) supported the order of the AO. Authorised Representative (AR) stated that assessee had produced all the necessary documents before the AO, that copies of purchase bills and bank statement, indicating the payment through channels were furnished, that AO had not doubted the sales shown by the assessee . He relied upon the cases of Nikunj Exim Enterprises Pvt. Ltd. ( 372 ITR 619) and Goolamally Hasanjee (ITA/3740-41/Mum/2012 -AY06-07 and 08-09, dt. 10. 6. 14). He also referred to the case of Ashok Talreja-HUF, (ITA/4629/Mum/2014 & Ors. AY. s 07-08 to 09-10, dtd. 17. 03. 2016)and stated that facts of that case were similar to the case under consideration. 5. We have considered the rival submissions and perused the material before us. We find that in the case of Ashok Talreja-HUF(supra), the Tribunal has dealt with the bills issued by RKG Group concerns and has decided the issue as under :- "5. We have heard the arguments of both the sides and also perused the relevant mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es amounting to Rs. 10, 59, 265 from the said Shri Rakeshkumar M. Gupta and his family members as bogus and accordingly added the same to the returned income of the assessee and completed the assessment. 3. Aggrieved by this, the assessee carried the matter before the Ld. CIT(A). Before the Ld. CIT(A), the assessee reiterated his submissions. After considering the facts and the submissions made by the assessee, the Ld. CIT(A) came to the conclusion that an adhoc addition of Rs. 1, 35, 000/- which is about 12. 5% of the purchase in question would meet the ends of justice. The Ld. CIT(A) restricted the addition to Rs. 1, 35, 000/-. 4. Aggrieved by this, the assessee is before us. 5. The Ld. Counsel for the assessee reiterated that the AO has grossly erred in treating the purchases as bogus purchase. It is the say of the Ld. Counsel that the Ld. CIT(A) further erred in making an adhoc disallowance which has no basis. 6. Per contra, the Ld. Departmental Representative relied upon the findings of the AO. 7. We have carefully perused the orders of the lower authorities. We find that the entire addition has been made on the statement of one Shri Rakeshkumar M. Gupta and his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been made to the Government Department, i. e. , Defence Research and Development Laboratory, Hyderabad. Further, there were confirmation letters filed by the suppliers, copies of invoices for purchases as well as copies of bank statement all of which would indicate that the purchases were in fact made. In our view, merely because the suppliers have not appeared before the Assessing Officer or the Commissioner of Income-tax (Appeals), one cannot conclude that the purchases were not made by the respondent-assessee. The Assessing Officer as well as the Commissioner of Income-tax (Appeals) have disallowed the deduction of Rs. 1. 33 crores on account of purchases merely on the basis of suspicion because the sellers and the canvassing agents have not been produced before them. We find that the order of the Tribunal is well a reasoned order taking into account all the facts before concluding that the purchases of Rs. 1. 33 crores was not bogus. No fault can be found with the order dated April 30, 2010, of the Tribunal. " There is no doubt that the AO had accepted the genuineness of sales made by the assessee. He had not made any effort to make further investigation to substantiate his ..... X X X X Extracts X X X X X X X X Extracts X X X X
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