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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 ..... ral justice and against the well settled law. 3. That the Learned CIT(A), is not justified in sustaining the addition of Rs. 9,92,656/- only on flimsy grounds, by brushing aside the genuine purchases of appellant duly supported by impeccable and concrete evidences. 4. That the Learned CIT(A), is not justified in sustaining the addition of Rs. 9,92,656/- that too without disputing the sales out of purchase of such raw material, which was accounted for and duly accepted. 5. Without prejudice to the aforesaid grounds of appeal and strictly in the alternative, the Ld. CIT(A) is not justified in taxing the entire alleged bogus purchases of Rs. 9,92,656/- inspite of at best taxing only the profit embedded in such alleged bogus purchases as per well settled law. 6. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard and disposed off. 2. Briefly the facts of the case are that the assessee firm has filed its return of income on 19/08/2011 declaring total income of Rs. 9,37,357/-. Subsequently the case of the assessee was selected for scrutiny and notice under section 148 of the Act and thereafter the assessee filed the return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an addition of Rs. 9,92,656/- was made in the hands of the assessee and the assessed income was determined at Rs. 19,30,013/-. 3. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A) wherein the action of the AO was challenged both on legality as well as on merits of the case which were dismissed by the Ld. CIT(A) and against the said findings, the assessee is in appeal before us. 4. During the course of hearing, the ld AR submitted that the notice under section 148 has been issued by the AO without independent application of mind and based on generalized borrowed information. It was submitted that it is only the AO who has to arrive at prima facie findings that the income chargeable to tax has escaped assessment. However in this case, the AO merely on the basis of information received from DDIT(Inv.), Karnal has recorded the reasons and notice under section 148 has been issued and in support, reliance was placed on the decision of Coordinate Jaipur Benches in case of Shri Shujaat Ali Khan Vs. ITO (ITA No. 170/JP/2019 dated 5/01/2021). 5. Per contra, the Ld. Sr. DR vehemently supported the issuance of notice u/s 148 and it was submitted that the AO h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of surmises and conjectures and purely arbitrarily on the alleged statement of seller given during the survey proceedings conducted by DI Investigation, Karnal without appreciating the true facts and figures submitted during the course of assessment proceedings. 3. The show cause notice given to us in respect to addition to be made by considering our genuine purchases amounting to Rs. 9,77,896/- from Kamna Overseas as detailed below as bogus purchases is totally incorrect and without appreciating the documents submitted during the assessment proceedings. Sr. no. Bill No./dated GR No./dated Transporter Truck No. Amount (Rs.) 1. 1112/04/06/2010 662/ 04/06/2010 Rishi Tpt Co. HR-60-0417 2,65,500 2. 1121/ 10/06/2010 678/ 10/06/2010 Rishi Tpt Co. HR-37B-1327 3,65,240 3. 1122/ 11/06/2010 1233/ 11/06/2010 Raju Tpt Co. RJ-13IG-0305 3,61,866 The appellant vide their reply dated 03.09.2018, submitted to the Assessing Officer, has stated that the firm has made purchases of 800 Qtls. of wheat for Rs. 9,77,896/- during the quarter ended 30th June, 2010 from Kamna Overseas and the payment for the same has been made through account payee cheques. As per submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been filed for the respective quarter on 22/07/2010 The AO have relied upon the statement of seller which is made during the investigation proceedings and vague report of Panipat Elevated Corridor and concluded that the purchases are bogus and did not put his mind to cross verify the genuineness of purchases from any other authorities/agencies to substantiate contrary facts. The AO during the assessment proceedings could not substantiate any sales as bogus sales or any case of money laundering of cash. It is a case of declaring the genuine purchases as bogus purely on the basis of surmises and conjectures and statement of third party without giving any opportunity to cross verify . In fact all the data, books of accounts, sales tax returns and supporting documents of transport and weigh bridge proves the purchases are genuine and not bogus. 6. We have received the goods and produced the wheat products and sold the same and have realized the sales proceeds. Sir, there is not an iota of discrepancy in our books of accounts in respect to purchases, sales and stock records and all the purchases are genuine and correct. It is also a mat ter of record that truck carriers usual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance resulting in addition to income made for Rs. 19,39,60,866/-, is directed to be deleted." 8. Per contra, the Ld. Sr. DR submitted that mere preparation of documents for purchases cannot controvert overwhelming evidence that the provider of these bills are bogus and they have admitted the same in their statement recorded on oath under section 131(1A) of the Act. Further the assessee has not been able to produce the Gate Keeper Register which was a cogent evidence of incoming and outgoing of vehicles carrying goods and therefore the purchase bills from M/s Kamna Overseas and weigh slips, bank statement etc submitted by the assessee cannot be taken as cogent evidence of purchase. It was submitted that in the present case, the assessee wants that the unassailable fact that the suppliers are non-existent and thus the bogus purchases should be ignored and only the documents produced should be considered is totally unsustainable in light of various settled judicial precedent such as Sumati Dayal 214 ITR 801 and Durga Prasad More 82 ITR 540. She accordingly supported the order and findings of the ld CIT(A) and submitted that the appeal so filed by the assessee be dismissed and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the response so received from the Toll Plaza authorities is sufficient enough to controvert the documentation so submitted by the assessee and thus hold against the assessee or the response so received would have required the AO to carry out further examination and verification from supplier/transporter/weighing agency's whose complete details and addresses are available with the Assessing officer. I find that out of three Toll Plaza authorities, one choose to remain quiet, another doesn't maintain CCTV records beyond 15 days and thus, cannot confirm and the solitary third authority said, it doesn't have the records of the specified vehicles. Thus, basis a solitary response from one of the Toll Plaza authorities, a suspicion about actual movement of vehicles through that particular route might have arisen in the mind of the AO however, in our considered view, suspicion however strong as contemplated by the AO cannot substitute credible demonstrable evidence and is thus not sufficient enough and the AO should have carried out further examination which apparently has not happened in the instant case. There is nothing on record to the effect that any further enquiry or investigat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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