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TMI Blog2017 (5) TMI 1626X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-2017 - Shri Chandra Mohan Garg And Shri O.P.Meena, JJ. Appellant by Shri S.S. Deshpande, CA Respondent by Shri Mohd. Javed, Sr. D.R. ORDER O.P. Meena, 1. This appeal by the Assessee is directed against the order dated 20-10-2014 of Commissioner of Income-tax (Appeals)- Ujjain (in short CIT(A)) and relates to assessment year2009-10 on following grounds: Ground no. 1 2 relates to maintaining addition of ₹ 21,64,000/- on account of alleged bogus purchase even though it was proved that material had come to factory. The purchase could not be confirmed as from the respective sellers because of business either closed or shifted. 2. Succinctly, facts as culled out from the orders of lower authorities are that the assessee is an individual and derives income from sale of machinery parts and packing boxes in the name of M/s. Metal Craft Engineering a proprietary concern of the assessee. The assessee had shown purchases of ₹ 4,06,77,448/-. The AO made inquiries by issuing commissions under section 131 (1)(d) and notices under section 133(6) of the Act and found that purchases of ₹ 5,75,600/- from M/s. Chirag Corporation, Mumbai , ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee, submitted that the ld. AR submitted that the stainless steel sheets which are used for manufacture of bowls are produced by very few manufacturers in India like Jindal, Sellum Industries and are also imported. Since, they are of a specific quality, there are not easily available in Indore or Ujjain market and are required to be purchased from Bombay or Gujrat. The brokers are engaged for obtaining these SS sheets, who acquire them from the market supplies to the assessee. The payment is made only after ascertaining the quality of goods since the principle M/s Kirloskar Brothers require them as per particular specification. It was asserted that the goods have been received by the assessee and have been entered in the stock register and the complete quantitative details have been furnished in the audit report (page 14 of paper book). No day to day stock register is maintained. However, the total quantity obtained and the total quantity used in production is recorded. The quantities in tons has been tallied and have been accepted by the Central Excise. The Sales tax department has also accepted the sales and the copies of the sales tax order are attached at page 49 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad. Therefore, the assessee has not able to establish genuineness purchase from the said party similarly, in the case of Balaji Sales Corporation and Rishab Metal (India). The notices issued u/s 133(6) dated 1.4.2012 were return answered by postal authorities as not available on the given address and the cheque issued in respect of these parties was credited in some other names the assessee has also failed to produce the proof of transportation of goods, therefore, the purchase made by the assessee from the above referred three parties cannot be treated as genuineness however, we find that the assessee is engaged in the manufacturing and sales of M/s Steel boxes and bowls and alied products the quantitative details are maintained by the assessee as reflected at page 14 of paper book of the accounts are audited and reported u/s 44B of the Act. The audited copy of balance sheet profit and loss account have been filed the sales effected by the assessee have been accepted by the Sales Tax Department . It is the contention of the assessee that the assessee requires a specific quality of sheets for manufacturing of the items to be supplied to M/s Kirloskar Brothers we also find that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Simit P. Sheth [2013] 38 taxman.com 385/219 taxman 85/38 taxman.com 385 (Guj); (ii) CIT v, Bholanath Poly Fab (p) Ltd. [2013] 40 taxman.com 494/[2014] 220 taxman 82/[2013] 355 ITR 290 (Guj.); (iii) Sanjay Oilcake Industries v. CIT [2009] 316 ITR 274 (Guj.). 6. Mrs. Mauna Bhatt, learned advocate appearing with Mr. Karan Sanghani, learned advocate for the assessee has supported the impugned order and submitted that the Tribunal is justified in holding that the CIT(A) is not justified in his action in modifying the order of Assessing Officer. 7. The issue involved in the present group of appeals is squarely covered by the decision of the Apex Court in the case of Simit P. Sheth (supra) wherein this Court has observed as under: 7. That being the position, not the entire purchase price but only profit element embedded in such purchases can be added to the income of the assessee. So much is clear by decision of this Court. In particular, Court has also taken a similar view in case of Commissioner of Income Tax-IV v. Vijay M Mistry Construction Ltd. vide order dated 10.01.2011 passed in Tax Appeal No. 1090 of 2009 and in case of Commissioner of Income Tax-I v. Bholanath Poly Fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in the case of Sanjay Oilcake Industries (supra) and this Court while deciding the said issue has held as under: 12 Thus, it is apparent that both the Commissioner (Appeals) and the Tribunal have concurrently accepted the finding of the Assessing Officer that the apparent sellers who had issued sale bills were not traceable. That goods were received from the parties other than the persons who had issued bills for such goods. Though the purchases are shown to have been made by making payment thereof by account payee cheques, the cheques have been deposited in bank accounts ostensibly in the name of the apparent sellers, thereafter the entire amounts have been withdrawn by bearer cheques and there is no trace or identity of the person withdrawing the amount from the bank accounts. In the light of the aforesaid nature of evidence it is not possible to record a different conclusion, different from the one recorded by the Commissioner (Appeals) and the Tribunal concurrently holding that the apparent sellers were not genuine, or were acting as conduit between the assessee-firm and the actual sellers of the raw materials. Both the Commissioner (Appeals) and the Tribunal have, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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