9911796707
TMI Blog2017 (11) TMI 1654X X X X Extracts X X X X X X X X Extracts X X X X ..... - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... taking note that since the assessee company was one of the parties who purchased goods from the M/s. Vikash Iron & Steels Pvt. Ltd. during the relevant period, had strong doubts as to the genuineness of the transactions and so he reopened the assessment. It was pointed out by the assessee during the assessment proceedings that the statement recorded of the Director, Shri Vikash Agarwal, is very general in nature and he, in his statement before the Assessing Officer, has used the word "basically the transaction reflected in the accounts were mostly in the nature of paper transactions". So according to the assessee it was clear from the statement of Shri Vikash Agarwal that all the transactions are not bogus. It was brought to the notice of the Assessing Officer that apart from the statement given by the Director of the company, there was no other evidence to conclude that the sales made by the company to the assessee company were bogus. The assessee submitted to AO that the impugned purchases of material from M/s. Vikash Iron & Steels Pvt. Ltd. worth ₹ 1,52,40,253/- was duly reflected in its purchase ledger and payment has been made to them against their relevant sales invoice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d made purchases to the tune of ₹ 1,52,40,253/- from M/s. Vikash Iron & Steel Co. Ltd. According to the Ld. A.O., one of the directors of the said company during the course of a survey operation in its business premises stated that they were providing accommodation entries in the form of raising fake bills and got in turn commission. On the basis of the said statement, the ld. AO had come to a conclusion that the assessee-company had claimed bogus purchases to the tune of ₹ 1,52,40,253/- and he disallowed the same. Before us, the ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. On the other hand, ld. Counsel for the assessee submitted that on perusal of the extract of the statement of the director of M/s. Vikash Iron & Steel Co. Ltd.(as reproduced at page no. 2 of the reassessment order), it is evident that the statement given by him is very general in nature. Shri Vikash Agarwal stated that "transactions in the accounts were mostly in the nature of paper transactions". So, according to ld. AR, it is clear that all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o have given an opportunity to call Shri Vikash Agarwal for cross-examination by the assessee. We note that the Assessing Officer did not provide any opportunity to cross-examine the said director and even though, the assessee denied the allegations of Shri Vikash Agarwal that it provides accommodation entries to it and produced challans, weight receipts, bank statement, purchase bills etc to prove the genuineness of the purchase made by the assessee from M/s Vikash Iron & Steels Pvt. Ltd., however, we note that the AO brushed aside the entire evidence furnished by the assessee without making any enquiry to the credibility of the evidence furnished before him and the AO have simply believed the statement of Shri Vikash Agarwal to make the entire disallowance, cannot be countenanced. When the assessee was confronted by the AO with the statement given by Shri Vikash Agarwal during the survey conducted at the premises of M/s. Vikash Iron & Steel Co. Ltd., the assessee denied the allegations that the assessee had got fake bills in lieu of commission to M/s. Vikash Iron & Steel Co. Ltd. and that the entire purchases made therefore bogus. In order to prove that the purchases were genuine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve the genuineness of the transactions. The Hon'ble Supreme Court in the case of Andaman Timber Industries vs. CCE 281 CTR 214 (SC) has reiterated that without cross-examining a third party, the statement given by such third party cannot be used adversely against the assessee. Moreover, we note that in this case, the sales shown by the assessee of the very same goods that has been found to be bogus and disallowed by the Assessing Officer, has been accepted by him as correct when sales of the same goods have been shown by the assessee. When the sales figures shown by the assessee has been accepted in totality, the entire purchases made by the assessee cannot be held it to be bogus since it is common knowledge that sales of goods cannot taken place without purchase of goods in the first place. So, therefore, in the light of the evidences adduced to prove the genuineness of the transactions and when the fact remains that the sales has been accepted by the Assessing Officer in totality, the action of the Assessing Officer to disallow the entire purchases and goods made from M/s. Vikash Iron & Steel Co. Ltd. on the basis of a general statement (without naming the assessee) on the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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