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TMI Blog2019 (6) TMI 1590X X X X Extracts X X X X X X X X Extracts X X X X ..... person on whose behalf the invoices are issued by this group. The statement only reinforces the contention of the respondent assessee that actual purchases are made. CIT(Appeals) also considered the prevailing business practices in the same line of business and come to conclusion that the actual suppliers are made by one party and the invoices are issued by another party, which does not mean the purchases are bogus. Thus, the order of the ld. CIT(A) is based on due appreciation of materials on record and the law governing the issue of the bogus purchases. Therefore we do not find any reason to interfere with the order of the ld. CIT(A) on the issue of bogus purchases. Thus, viewed from any angle the impugned assessment order cannot be sustained in the eyes of law. The order of the ld. CIT(Appeals) is based on the due appreciation of material on record and in consonance with the settled principle of law and therefore we do not find any reason to interfere with the order of the ld. CIT(A). Accordingly, the appeal filed by the Revenue is dismissed. - I.T.A. Nos.53 to 66/CHNY/2019 - - - Dated:- 28-6-2019 - SHRI INTURI RAMA RAO AND SHRI DUVVURU RL REDDY, JJ. Appellant by : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f grounds that may be raised during the course of the appeal proceedings, the order of learned CIT(Appeals) may be set aside and that of the Assessing Officer be restored. 5. The brief facts of the case are as under:- The respondent-assessee namely M/s. G R Thangamaligai Sons, is a firm engaged in the business of trading of gold and diamond jewellery. The return of income for the AY 2009-10 was filed on 26.09.2009 disclosing total income of ₹ 18,32,62,730/-. There was a search seizure operations u/s.132 of the Act on the assessee on 16.05.2013. The Assessing Officer issued notice u/s.153A of the Act. In response to notice, the assessee filed its returns of income admitting G24,32,71,490/-. The Assessing Officer while completing the assessment u/s.143(3) r.w.s. 153A of the Act assessed total income of G28,39,43,517/- by making additions on account of (i) unproved (bogus) purchases of diamonds (ii) disallowance of deduction claimed u/s.80-IA of the Act and (iii) disallowance of expenses u/s.14A of the Act. During the search and seizure proceedings, it is found that Respondent- assessee had purchased diamonds from the following parties namely (a) Parvathi Exports (b) M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any incriminating materials on record and challenging the findings of the Assessing Officer that purchases made from the group companies namely (a) Parvathi Exports (b) Meenakshi Exports and (c) Malhar Exports are bogus on the ground that assessee had discharged his onus by filing evidence in the form of invoices, copies of the details of the payments made, PA number, name and address of the parities. The CIT(A) upon consideration details of purchases, sales and closing stock and the statements given by Shri. Bhanwarlal M Jain held that the purchases cannot to be held as bogus. The modus operandi operated by Shri. Bhanwarlal M Jain Group , the ld. CIT(A) felt that there were actual supply of diamonds, invoices were raised and payments were also made and he also noted that Shri. Bhanwarlal M Jain never stated that the money received from the Respondent - assessee was returned to the assessee. Based on this information, coupled with the fact that the quantitative details of purchases, sales and stock of diamonds were maintained found to be tallying, he held that the purchases made by the assessee cannot be held to be bogus. Further the ld. CIT(A) placing reliance on the decisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rguments. He further submitted that the assessee had discharged his onus by filing primary details of name, address, PA Number and particulars of details of payments of the parties who supplied the diamonds. It is further submitted that the Sales Tax authorities found no discrepancies in the sales/ purchases made by the assessee, which findings is relevant for Income Tax purpose and placing reliance on the decision of Jurisdictional High Court in the case of CIT vs. Smt. Sakuntala Devi Khetan (2013) 33 taxmann.com 98. In any event, it is submitted that the addition is made based on the statements recorded from third parties, such additions cannot be sustained in the eye of law as no opportunity to cross examine the third party was provided to the assessee and reliance in this regard is also placed by the decision of Hon'ble Supreme Court in the case of Andaman Timber Industries vs. CCE (Civil Appeal No.4228 of 2006). 9. On merits, ld. Counsel submitted that when the books of accounts are accepted by the Assessing Officer and the profits offered out of sales are also accepted, no addition can be made in respect of purchases. In support of this contention, he placed reliance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seized during the search and thus, would not qualify the expression document having been seized during the search. Even the statement recorded from the director of Pravin K. Jain Group and Shri. Bhanwarlal M. Jain Group is not consequent upon any material found during the course of search of the Respondent- assessee. 11. Now the law is settled to the extent that in the absence of any incriminating materials found during the course of search and seizure operations, no addition can be made u/s.153A of the Act. Reliance can be placed on the decision of Hon ble Delhi High Court in the case of PCIT vs. Meeta Gutgutia, (2017) 82 taxmann.com 287 affirmed by the Hon ble Supreme Court by dismissal of the Special Leave petition in the case of PCIT vs. Meeta Gutputia, (2018) 96 taxmann.com 468. There is a long line of authorities in support of the proposition of law that in the absence of incriminating material found as a result of search no addition can be made in the assessment made pursuant to notice u/s.153A of the Act. Please refer to the decision of Hon ble Delhi High Court in the case of CIT vs. Kabul Chawla (2016) 380 ITR 573 and Hon ble Gujarat High Court in the case of PCI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yments to examine whether or not the payment was genuine. The Assessing Officer on receipt of further information did not carry out the necessary enquiries on the basis of the PAN numbers, which were available with him to find out the genuineness of the parties. The CIT(A) as well as the Tribunal have correctly held that it is not possible for the assessee to compel the appearance of the parties before the Assessing Officer . The other important aspect is to be considered is that the ld. CIT(A) had examined the quantitative details of purchases, sales and closing stock and also recorded finding that the assessee had been maintaining stock register showing the purchases, sales and closing stock of diamonds and gave a findings that quantitative details were tallying. When the sales was accepted, there was no reason to doubt the purchases made or to doubt the genuineness of the purchases and make addition in view of the settled legal position of law laid in the decisions relied upon by the assessee cited supra. Further, the findings of the ld. CIT(A) that there is no evidence on record that alleged sellers had returned the money to the assessee remains uncontroverted. The Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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