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TMI Blog2018 (11) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... rove the same which resulted into addition on account of bogus purchases. 2. On the facts and in the circumstances of the case, the order of the learned CIT(A) is perverse and contrary to the evidence available on record in holding that the Assessing Officer has not been able to make out his case against the progressive trading result declared by the assessee and has declared the purchases worth Rs. 1,33,56,101/- as bogus by relying on Inspector's report, which was not even confronted to the assessee as on facts in as much as the Inspector's report was duly confronted to the Counsel on 04-12-2009 and this fact is duly mentioned in the very first line of para: 6 at page 3 of the assessment order. 3. On the facts and in the circumstances of the case, the learned CIT(A) has erred on facts and in law in holding that the statement of Sh. Vinod Goyal was recorded in another case and was not confronted to the assessee, hence it had no evidentiary value-especially inspite of repeated opportunities, the assessee did not produce the party M/s Maa Durga Trading Co. nor apprised any difficulty in doing so and in another case with similar facts, this person namely Sh. Vinod Goyal was foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for adjudication as under: 1) Bogus purchases of Rs. 1,33,56,101/- and 2) Bogus liability of Rs. 14,43,239/-. 3. Briefly, the facts of the case are that return declaring income of Rs. 1,75,440/- was filed by the assessee on 12.10.2007 and the assessment was completed u/s 143(3) of the Act on 29.12.2009 at an income of Rs. 1,49,74,780/-. The AO made two additions of Rs. 1,33,56,101/- and Rs. 14,43,239/- to the assessee's returned income, on account of bogus purchases and bogus liability respectively. The aggrieved assessee filed appeal before the Ld. CIT(A), Faridabad, who vide impugned order dated 28.05.2010 in appeal no. 238/09-10, deleted the said additions by observing as under: "8. I have carefully considered the submissions of the Ld. AR and perused the impugned order of assessment. I find that the AO has not been able to make out his case against the appellant's progressive trading results declared and has blatantly declared the purchases of Rs. 1,10,38,298/- and Rs. 23,17,803/- from M/s Maa Durga Trading Company and M/s Om Trading Company respectively as bogus only on the misconceived and fallacious basis that they did not exist at the given addresses, relying upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance is wholly without any legal support or factual material on record. Hence, it stands cancelled." 4. The Ld. DR. Supported the assessment order contending that the order of the learned CIT(A) is perverse and contrary to the evidence available on record in holding that the Assessing Officer has not been able to make out his case against the progressive trading result declared by the assessee and has declared the purchases worth Rs. 1,33,56,101/- as bogus by relying on Inspector's report, which was not even confronted to the assessee as on facts in as much as the Inspector's report was duly confronted to the Counsel on 04-12-2009 and this fact is duly mentioned in the very first line of para: 6 at page 3 of the assessment order; that the statement of Sh. Vinod Goyal was recorded in another case and was not confronted to the assessee, hence it had no evidentiary value-especially, inspite of being given repeated opportunities, the assessee did not produce the party M/s Maa Durga Trading Co. nor apprised any difficulty in doing so and in another case with similar facts, this person namely Sh. Vinod Goyal was found to be having the same PAN as mentioned in the alleged confir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losing the whereabouts of Sh. Vinod Goyal, therefore, he could be traced only towards the end of limitation and there was no time with the AO to confront the assessee on this issue after 29-12-2009. 7. We find that the Ld. CIT(A) erred in observing the AO was not able to make out his case against the progressive trading results declared by the assessee and that the purchases worth Rs. 1,33,56,101/- was treated as bogus by the AO, relying on Inspector's report, which was not even confronted to the assessee in as much as the Inspector's report was duly confronted to the Counsel on 04-12-2009 and this fact is duly mentioned in the very first line of para: 6 at page 3 of the assessment order. The ld.AR submission that the statement of Sh. Vinod Goyal was recorded in another case and was not confronted to the assessee, in no way reduce its evidentiary value, especially in as much as repeated opportunities, the assessee did not produce the party M/s Maa Durga Trading Co. nor apprised any difficulty in doing so and in another case with similar facts, this person namely Sh. Vinod Goyal was found to be having the same PAN as mentioned in the alleged confirmation furnished by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Trading Company recorded at the back of the assessee, and Inspector report, confront the assessee with the same. II. Call for remand report from the AO on the submission of the assessee. III. No doubt, the assessee shall cooperate in the afresh proceedings, before the CIT(A). IV. All pleas available under the law shall remain so available to the assessee in the fresh proceedings before the Ld. CIT(A). 11. The next issue pertains to the bogus liability of an amount of Rs. 14,43,239/-. The AO made the addition as an outstanding liability of M/s Hindustan Trading Company as on 31.03.2007 by way of bogus and non-existent liability and hence, added it to the assessee's taxable income. 12. The counsel submitted that it was out of the opening balance carried forward from the earlier years that itself acknowledge the liability on record (APB,71). The CIT(A) has rightly held that the credit balance of Rs. 14,43,239/- cannot be assessed as deemed income u/s 41(1) of the Income Tax Act, 1961 by any stretch of imagination as bogus liability when the AO has not established the non-genuineness of such credit, how it could be subjected to the provisions of section 68 of the Income Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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