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TMI Blog2020 (9) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... with the AO which were not considered and discussed. CIT(A) has considered the all relevant material on record and arrived at this conclusion that the addition is not based upon any material available on record. No distinguishable material has been produced on record which required interfere with the order passed by the CIT(A) in question. CIT(A) has decided the issue judiciously and correctly which is not liable to be interfere with - Decided against revenue. - I.T.A. Nos.4264/M/2017 & 4265/M/2017 - - - Dated:- 31-8-2020 - Shri Rajesh Kumar, AM And Shri Amarjit Singh, JM For the Assessee : Shri Prateek Jain For the Revenue : Shri Drop Singh Meena (Sr. AR) ORDER PER AMARJIT SINGH, JM: The above mentioned appeals have been filed by the revenue against the order dated 07.03.2017 passed by the Commissioner of Income Tax (Appeals)-9, Mumbai [hereinafter referred to as the CIT(A) ] relevant to the A.Ys.2007-08 2008-09. ITA. NO.4264/M/2017:- 2. The revenue has filed the present appeal against the order dated 07.03.2017 passed by the Commissioner of Income Tax (Appeals)-9, Mumbai [hereinafter referred to as the CIT(A) ] relevant to the A.Y.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 133(6) were issued to the alleged parties on their address which were received back un-served with the postal remarks of left/not known. Thereafter, the notice was given to the assessee and after the reply of the assessee, peak credit in sum of ₹ 1,02,60,149/- was added to the income of the assessee. The total income of the assessee was assessed to the tune of ₹ 1,02,60,150/-. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who deleted the addition, therefore, the revenue has filed the present appeal before us. ISSUE NOs.1 2 6. Issue nos. 1 2 are inter-connected, therefore, are being taken up together for adjudication. In fact, both the issues are in connection with the deletion of addition of bogus purchase in sum of ₹ 1,02,60,150/- u/s 37(1) of the I. T. Ac, 1961. At the very outset, the Ld. Representative of the revenue has argued that the CIT(A) has wrongly deleted the addition specifically in the circumstances when the assessee failed to confirm the purchase and the AO also verified the claim of the assessee on account of this fact that the notices were issued u/s 133(6) of the Act which were not served upon the seller. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ogus purchases and not genuine. More importantly there no direct evidence which has brought on record by the AO. No nexus has been established as to circulating of funds or that cash was paid to third parties for actual purchase and that cash has been received on issues of cheques. 6.3.4. Ongoing through the assessment order for the NY 2007-08 it is seen that on receiving information by the DDIT that the appellant is one of party who has made purchases from parties listed on hawala List by the Maharashtra Sales Tax Department open enquiry was conducted by the Officers of the Investigation team by visiting the business premises of the appellant. During the course of enquiry bills of certain parties were impounded. However, there is nothing on record to show that any incriminating details have been found or that adverse facts have been brought on record. 6.3.5. The A.O. has merely based on the information received from the DDIT has formed opinion that the appellant is one of the beneficiaries who has made alleged bogus purchases. 6.3.6. The AO has stated that actual purchase has been made but from third party as against the paper purchases front the said eight parties. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e court has held as under: 13. We have considered the rival submissions and the materials placed on record. The purchases are supported by bills, entries in the books of account. payment by cheque and quantitative details Assessing Officer did not find airy inflation in purchase price or inflation in consumption or suppression the production. The addition had been made only on the ground that the parties are not traceable. Assesses had made payment through crossed cheques and assessing officer did no? find that payment made came back to assessee. Assessing Officer has made addition in respect to the outstanding amount as on purchases is 31.3.2001 which has been cleared in the succeeding years. The ratio of the creditor to the purchase normal considering the past records of the assessee. lire creditors were outstanding owing to liquidity as assessee is also required to get credit in respect of sales also. Even otherwise provision of section 68 is no: to amounts representing purchases wade on credit as held in the case of Panchan Doss Jam cited supra. lire addition in bogus purchase cannot to be sustained in full or in part in view of the various cases laws cited by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Veera Mercantile P. Ltd. 14,59,012 4 M/s. Raj Corporation 29,17,620 82,84,497 In the first round of assessment proceedings, due to non-verification of the identity of the parties, purchase were disallowed by the Assessing Officer. Before the Commissioner (Appeals), various additional evidences were filed which has been discussed in the foregoing paragraphs to substantiate the genuine of the purchases. These additional evidences were rejected Commissioner(Appeals) on the ground that there was no reason cause for not producing the same before the Assessing Officer. Thereafter. in second appeal. the Tribunal, after admitting the additional evidences, as filed by the assessee before the Commissioner (Appeals), remanded the matter back to the file of the Assessing Officer to decide the issue afresh. in the second round, flit assessee, as per the rioting of the Assessing Officer. could not make proper compliance of the notices and dates of hearing. An averment has bees: made before its by the learned counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce for him. The primary onus which laid upon the Assessee was discharged. It was upon the assessee that these documents are not genuine. Circe these documents have not been, be held that the entire purchases with these parties are bogus. Thus, front the facts of the case and also in view of the various evidences, as discussed above, we partly order passed by the commissioner (Appeals) and hold that the entire purchases aggregating to 82,84,497, from the four parties are genuine and, therefore, the entire addition made by art! Assessing Officer and partly by the Commissioner (Appeals) stands deleted. Thus, ground no.1, raised by the Department is dismissed whereas ground no.2, of the Assessee stands allowed. 6.3.7.v) The Jurisdictional ITAT, Mumbai bench recently in the case of ACIT v. Shri Mahesh Shah (ITA No. 5194/Mum/2014) has held that: 4.3.4 On an appreciation of the material on record, it is evident from the order of assessment that it is primarily on the basis of information/details obtained from the Sales Tax Department, Government of Maharashtra that the AO issued the show cause notice to the assessee to explain the said purchases and issued notices under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO in brushing aside these evidences cannot be accepted. Further the double Bombay High Court in the case of CIT vs. Ashish International ((TA No. 4299 of 2009) (Boot) has held that the genuineness of the statements relied upon by Revenue is not established when the assessee disputes the correctness thereof and has not been opportunity to cross examine these parties. Moreover, when the payments for the said purchases to the said 12 persons is through roper banking channels and there is no evidence brought on record by the AO to establish that the said payments were routed back to the tr5sessee, the addition made by the AO is unsustainable are filed in this View Of ITA No. 5194/Mum/2O14 Shri Mahesh K Shah 8 ours by the decisions, inter alia, the Hon'ble Bond/ay High Court in the cases of Nikunj Eximp Enterprises Pvt. Ltd. (supra) and Ashish International (supra) and the decision of the Coordinate Bench in the case of M/s. Vaman International Pvt. Ltd. ITA. No. 794/Mum/2015 dated 16.21.2016). In this factual and legal matrix of the case on this issue, as discus find no reason for interference in the order of the learned CIT(A) and consequently uphold order deleting the additi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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