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TMI Blog2019 (9) TMI 755X X X X Extracts X X X X X X X X Extracts X X X X ..... see, most specifically Stock Register. It could also mean that the assessee has done some undisclosed purchases, or undisclosed sales, which it is attempting to cover up by the transactions with the said bogus entries. The actual picture is known only to the assessee. It is for the assessee to substantiate its claim. The assessee admittedly has failed to prove its claim before the Assessing Officer and the ld.CIT(A). - Appeals filed by the assessee are dismissed. - I.T.A.Nos.2276, 2277, 2278 /Chny/2018 - - - Dated:- 12-7-2019 - SHRI GEORGE MATHAN, JUDICIAL MEMBER Appellant by: Shri A.S. Sriraman, Advocate Respondent by: Smt. M. Subashri, JCIT, D.R ORDER These appeals are filed by the assessee against the consolidated order of the Commissioner of Income-tax (Appeals)- 1, Madurai in appeal Nos.0046,0047 0048/2015-16 dated 12.06.2018 for the assessment years 2009-10 to 2011-12. 2. Shri A.S.Sriraman represented on behalf of the Assessee and Smt M.subashri represented on behalf of the Revenue. 3. It was submitted by the ld.AR that in the course of assessment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dors. It is also not disputed that the receipt of the material were properly recorded by the assessees in their stock registers. The sales effected by the assessees was never disbelieved. When the sales are accepted, we cannot say that there were no corresponding purchases. Nevertheless, it is true that assessee despite claiming the purchases to have been effected through some intermediaries, were unable to produce the intermediaries or file confirmations from them. Hence, we cannot say that assessee had made all necessary efforts for proving the purchases claimed to have been made from the parties mentioned in the table above, beyond preponderance of probability. A similar case, where an addition was made disbelieving purchases, based on search operations conducted in M/s. Bhanwarlal Jain Group, had come up before the Mumbai Bench of the Tribunal in ITA Nos.3707 3761/Mum/2016, dated 11.12.2017). What was held by the Mumbai Bench at paras 9 10 are reproduced hereunder:- 9. We have heard both the counsel and perused the record. As regards the reopening, we find the Commissioner of Income Tax (Appeals) has passed an apposite order. The reopening has been done ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a reason that notices issued u/s.133(6) of the Act to these parties were returned unserved. Ld. Commissioner of Income Tax (Appeals) also states that assessee had failed to bring in sufficient evidence to prove the purchases. Nevertheless what we find from the assessment orders for the impugned assessment years is that ld. Assessing Officer had not found any defects in the books of accounts produced by the assessee, nor rejected it. Assessments were completed u/s.143(3) of the Act after verifying the books of accounts produced by the assessee. In the tax Audit report for the impugned assessment years filed by the assessee in Form 3CD, quantitative details have been given at Sl. No. 28(a) as under:- Assessment year 2009-10 : (a) In the case of a trading concern, give quantitative details of principal items of goods traded Plastic Granules Oil (Qty in Kg) (i) Opening Stock : 113370.000 (ii) Purchases during the previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were not found to be incorrect by ld. Assessing Officer. It is clear from the above, that assessee had maintained records which gave the quantity of granules in stock, its purchases and its sales. As mentioned by the ld. Authorised Representative, the sales made by the assessee were never disbelieved. In our opinion, assessee could not have effected the sales without corresponding purchases. If the Revenue disbelieved the purchases the corresponding quantity ought have been reduced from the sales also. In our opinion, the ld. Assessing Officer fell in error in disbelieving the purchases while accepting the quantity of plastic granules sold by the assessee, that too without rejecting the books of the assessee. It is not disputed that assessee had produced the bills for all purchases and these were paid through banking channel. Just because the notices to vendors of the assessee came back unservd, the purchases could not have been disbelieved. A businessman who purchases goods in the normal course of his business is not expected to keep a track of the address of all the vendors who supplied goods to him. There is nothing on record to substantiate the inference drawn by the lower auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conducting any independent enquiries. Before the CIT(Appeals), one of the points raised by the assessee was with respect to an opportunity to cross examine the four parties, but we find that no such opportunity have been allowed. Considering the entirety of facts and circumstances of the case and the aforesaid precedents, which have been rendered under identical circumstances, in our view, the CIT(Appeals) erred in sustaining the addition to the extent of ₹ 4,19,356/- instead of deleting the entire addition of ₹ 9,68,937/- made by the Assessing Officer. We direct accordingly . Considering the facts and circumstances of the case, we are of the opinion that purchases could not have been considered as bogus. Disallowances made for the impugned assessment years stand deleted. Related grounds are allowed. Ld.AR submitted that in fact the addition itself was not called for and in the worst case what could be added was only gross profit. It was a prayer that the addition was liable to be deleted. 4. In reply, ld.DR strongly supported the orders of the ld.CIT(A) and the ld.Assessing Officer 5. I have considere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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