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TMI Blog2018 (11) TMI 1495X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the CIT(A) on the issue in dispute and dismiss the issue in dispute raised by the assessee. The findings of fact recorded by the Assessing Officer, CIT(A) and the Tribunal were not shown to be perverse based on non-appreciation of material on record or based on misreading of any evidence on record. Thus, question (b) cannot be held to be a substantial question of law. Addition on account of bogus purchases - Held that:- Purchases have been used for suppressing the profits of the business. Even though the books of account have not been rejected, since the AO has clearly established that the purchases were bogus, there is no justification for accepting the contentions of the AR that only part of the purchase should be disallowed. In view of the above observations this addition made by the AO was rightly upheld by the Ld. CIT(A), which does not need any interference. No substantial question of law. - ITA-126-2018 (O&M) - - - Dated:- 1-11-2018 - MR AJAY KUMAR MITTAL AND MRS. MANJARI NEHRU KAUL, JJ. For The Appellant : Mr. B.M. Monga, Advocate and Mr. Rohit Kaura, Advocate ORDER AJAY KUMAR MITTAL, J. CM-12060-CII-2018 This is an appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xing the entire sales without allowing the deduction of the corresponding purchase and is against the well settled law? 2. A few facts necessary for adjudication of the instant appeal as narrated therein may be noticed. The assessee filed its return of income on 20.9.2012 for the assessment year 2012-13 declaring income at ₹ 7,98,820/-. During the assessing proceedings, the assessee was asked to explain certain unsecured loans of ₹ 6,20,000/- (wrongly written as ₹ 7,20,000/-) received from three persons. The Assessing Officer treated the said loan as undisclosed income of the assessee and made the addition of ₹ 6,20,000/-. Since the appellant could not produce the record as sought, an addition of ₹ 21,46,261/- was made by the Assessing Officer. Accordingly, vide order dated 24.3.2015 (Annexure A-1), the Assessing Officer framed the assessment under Section 143(3) of the Act at ₹ 36,65,080/-. Feeling aggrieved by the order, Annexure A-1, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for brevity the CIT(A) ]. The CIT(A) vide order dated 8.9.2016 (Annexure A-2) upheld the assessment framed by the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emphasized that Income Tax Return, PAN and other details have been filed by the assessee before the AO and therefore the credit worthiness of the parties has been established. However, the AR has not provided the details of returned income of the parties and the explanation for deposit of cash by one person immediately before cheques were issued to the appellant. Establishing the credit worthiness and genuine would imply that the parties would be having sufficient surplus saving and funds backed by capital assets to provide loan to the appellant. Merely by providing the Income Tax Return and PAN number is not enough to establish the credit worthiness and genuineness of the unsecured loans. Accordingly, this addition made by the AO is upheld and the ground of the appellant is dismissed. 7. The Tribunal while upholding the said addition of ₹ 6,20,000/- made by the Assessing Officer and affirmed by the CIT(A) had held as under:- 6.1 After perusing the aforesaid finding of the ld. CIT (A), with regard to addition of ₹ 6,20,000/- on account of unsecured loan is concerned, I find that AO has made the addition by highlighting that with regard to the three parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the purchases as bogus made addition of ₹ 21,46,261/- to the income of the assessee by holding that the purchases from M/s Haryana Trading Company and M/s Vishal Trader were enquired and summons were issued to them. As per the report dated 17.3.2015 of the Inspector, there was no concern existing in the name of M/s Haryana Trading Company at the given address and a certificate to this effect was also obtained from the Haryana Vaypar Mandal. The assessee was also confronted with the said details vide letter dated 18.3.2015. Similarly, M/s Vishal Traders was also not existing at the given address. In the bills of the said parties, there were no sales tax number/TIN number or CIN number. The assessee had failed to explain the said discrepancies. 9. The CIT(A) while affirming the addition of ₹ 21,46,261/- made by the Assessing Officer had recorded as under:- 3.4. After going through the facts and submissions it is observed that the AO has conducted detailed enquiries regarding the details of purchases from M/s Haryana Trading Company and M/s Vishal Traders and had come to logically conclude that these purchases from the parties could not be established. The bil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... worthwhile to note that such modus operandi is used by some business persons to book bogus purchases for suppressing the profits of business. In the present case the argument of the AR that these purchases were the basis of the sales made, is not established by facts and evidences. The value of goods as per the VAT return for the year ending 31.3.2012 has been shown at ₹ 53,53,28,987/-. Accordingly, it appears that these purchases from M/s Haryana Trading Company and M/s Vishal Traders have been used for suppressing the profits of the business. Even though the books of account have not been rejected, since the AO has clearly established that the purchases were bogus, there is no justification for accepting the contentions of the AR that only part of the purchase should be disallowed. In view of the above observations this addition made by the AO was rightly upheld by the Ld. CIT(A), which does not need any interference on my part, hence, I uphold the order of the Ld. CIT(A) on the issue in dispute and dismiss the issue in dispute raised by the Revenue. 11. In view of the findings recorded above, questions (c) and (d) would not arise. 12. As noticed above, no illegal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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