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TMI Blog2022 (10) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... a case where the disallowance by way of bogus purchases has been made by AO solely based on statement of Shri Rajesh Mittal which was not subjected to further examination and cross-examination during the course of assessment proceedings and the facts of the case are thus at par with the facts in case of Odeon Builders Ltd [ 2019 (8) TMI 1072 - SUPREME COURT] where the SLP filed by the Revenue has been dismissed by the Hon ble Supreme Court. The addition so made by the AO and sustained by the ld CIT(A) is hereby set-aside and the same is hereby directed to be deleted. - Decided in favour of assessee. - ITA No. 145/Chd/2020 - - - Dated:- 26-10-2022 - Shri. Vikram Singh Yadav, AM For the Assessee : Shri B.M. Monga, Advocate, Shri Rohit Kaura, Advocate For the Revenue : Smt. Amanpreet Kaur, Sr. DR ORDER PER VIKRAM SINGH YADAV, AM: This is an appeal filed by the assessee against the order of Learned Commissioner of Income Tax (Appeal s)-1, Chandigarh [ in shor t the Ld. CIT(A) ] passed u/s 250(6) of the Income Tax Act, 1961 (in short the Act ) dated 26/11/2019 for assessment year 2011-12, wherein the assessee has taken the following grounds of appeal: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter, daily in and out register and stock register. In response, the assessee submitted print out of cash book, bank account statement, purchase register print out, copy of day book and copy of stock register, however, the assessee didn t produce the gate keeper register. As per the AO, the assessee submitted all these registers which are maintained on computer and which can easily be modified, however, the gate keeper register which is manually maintained by the gate keeper and which tracks the daily movement of goods was not produced which shows the denial on part of the assessee to produce such register for verification. As per the AO, the information was received from DDIT (Investigation) Karnal that the assessee entered into bogus purchases from M/s Kamna Overseas Narela, Delhi, as per information received from Toll Plaza, the vehicles were not entered in the records of Toll Plaza. The online payments shown to have been made for such purchases are not genuine transactions but sham transactions as accepted by bill givers during their statements recorded under section 131(1A) before the DDIT(Inv.). The assessee could not prove where about or failed to produce its suppliers from w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Rs. 9,77,896/- and has made payment through RTGS. It was submitted that the Proprietor of M/s Kamna Overseas has stated in his statement that they have not made any sale or purchase and have only issued bogus sale bills to different parties and payment was received in their bank accounts from these parties, later on they withdrew these payments from their bank accounts and return the same to these parties after receiving the commission and basis credible information so received and analyzed by the AO, the reasons were recorded and notice under section 148 was issued. It was accordingly submitted that the contention so advanced by the ld AR deserve to be rejected. 6. Coming to the merits of the case, the Ld. AR contended that all relevant documentation have been submitted during the course of assessment proceedings and without finding any defect therein and relying on the statement of a third party which has not been confronted to the assessee , the AO has made the additions which has been confirmed by the ld CIT(A) without appreciating the submissions made before him and our reference was drawn to the said submissions which read as under: 2. The case was selected for scru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accounts, (e) copy of statutory records like sales tax returns, (f) copy of stock records, (g) copy of weighment slips of weigh bridge where the trucks were weighed with wheat ,called as dharam kanta parchi. 4. However, the AO has referred about the report from investigation wing of income tax department, Karnal where by the statement of Sh. Rajesh Mittal states he has not made any sales to us. Neither any report is shown to us nor we are shared with the documents based upon which the AO has given an opinion and show caused us that these purchases are bogus. Sir, the AO further in his assessment order emphasized on the report of Panipat Elevated corridor, which states details of these vehicles have not been found in their toll plaza records and for Derrabassi toll plaza the data is available for 15 days. Sir the AO either is not aware of routes without toll plaza or has purely on the basis of surmises and conjectures concluded that these purchases are bogus as per report of DI wing, Karnal. 5. We have submitted the entire records in respect to purchases i.e. original purchase bills, goods receipt notes, weigh slips, sales tax returns where details of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... channels, sales tax returns are filed where the purchases are declared on 22/07/2010. No proof of money laundering of cash is established. The AO did not investigate any other agency /office. Sir, declaring our purchases as bogus purely on the basis of surmises and conjectures and without appreciating the genuine purchases and payment thereof by banking channels and supporting records, is not correct. We request you, in the interest of justice, the genuine purchases be not treated as bogus purely on the statement of toll barrier and internal report of department without giving any opportunity to cross verify. We request you not to draw any adverse view in the light of above submissions. 7. In support of his contentions, the ld AR placed reliance on the decision of Hon ble Supreme Court in case of CIT Vs. Odeon Builders Pvt. Ltd. [2019] 110 taxmann.com 64 (SC) where the review petition filed by the Revenue was dismissed and our reference was drawn to the findings of the Hon ble Supreme Court at para 3 which read as under: 3. However, on going through the judgments of the CIT, ITAT and the High Court, we find that on merits a disallowance of Rs. 19,39,60,866/- was bas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, wheat account maintained by the assessee showing the purchases and final produce, sales tax returns where details of purchases and sales were submitted to Sales tax authorities and the payments towards such purchases made through RTGS as reflected in its bank statement and all these documents were furnished during the course of assessment proceedings. On perusal of these documentation, it is noted that the purchase bills are issued by the supplier of wheat M/s Kamna Overseas, good receipt notes issued by the Transporters M/s Rishi Transport Co. and M/s Raju Transport Co and weighing slips are issued by Shiv Shankar Kanta where details of the goods in terms of quantity, rate, month of purchase, supply, truck number through which these goods were transported and supplier/transporter/weighing agency s complete details and addresses are thus available with the Assessing officer. In the case in hand, I therefore find that the assessee produced all the relevant documentary evidence to establish the genuineness of the transaction. Even if the AO doubted the transaction, then to establish that the transaction is bogus, the AO is required to produce the contrary material evidence so that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been processed and the wheat product has since been sold and the sale proceeds have been realized which has been duly accounted for in books of accounts and I find that there is no adverse finding recorded by either of the authorities below. 11. I therefore find that the case of the Revenue solely rests on the statement of Shri Rajesh Mittal, Prop of M/s Kamna Overseas, the supplier of wheat which was recorded on oath u/s 131(IA) during the course of proceedings before the DDIT (Investigation), Karnal and not during the course of assessment proceedings. The statement so recorded and received by the AO could be a basis for initiating the investigation and examination of documentation and other evidences collected during the course of assessment proceedings. In the instant case, I find that without finding any defect or inaccuracies in the documentation so submitted by the assessee during the course of assessment proceedings and relying solely on the statement, the assessment proceedings have been initiated and completed by the AO. Further, even where the AO is of the belief that contents of the statement are clear and specific and goes against the assessee, the question is whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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