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TMI Blog2023 (9) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... erred both on facts and in assessing the income of the appellant at an income of Rs. 19,53,840 as against income of Rs. 14,160 declared by the appellant. 3. That the CIT(A) and AO have erred on facts and in law in holding an addition of an amount on account of bogus purchases of Rs. 18,65,080 and commission expenses of Rs. 74,603. 4. That the addition has been made grossly indulging in surmises without bringing on any direct evidence against the assessee, only on the basis of presumption and assumptions. 5. That the CIT(A) and AO have erred on facts and in law in not considering the fact that the appellant brought on record all evidences to prove the genuineness of the transactions. 6. That the CIT(A) and AO have erred both on facts and in law in not following the decision of the Hon'ble Supreme Court in the case of PCIT v. Tejua Rohitkumar Kapadia (256 Taxman 213) which held that purchases cannot be treated as bogus where the purchases made by assessee-trader were duly supported by bills and payments were made by account payee cheque, seller also confirmed transaction and there was no evidence to show that amount was recycled back to assessee. 7. Without prejudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reafter, the AO proceeded to verify the factum of these purchases from the concerned parties. The AO found that the assessee has taken accommodation entry from M/s. Shivji Garments (P.) Ltd. of Rs. 4,53,940/-; from M/s Shivangi garments (P.) Ltd. of Rs. 6,23,560/- and also from M/s. NYR Creations (P.) Ltd. of Rs. 7,87,580/-. Hence, the AO made addition of these entries and also added the commission of Rs. 74,603/-. Hence, the AO assessed the income of Rs. 19,53,840/-. 4. Aggrieved against this, the assessee preferred appeal before Ld. CIT(A) who after considering the submissions, dismissed the appeal of the assessee and confirmed the addition. The aggrieved assessee is before this bench with the grounds as noted above against the upholding the addition by the ld. CIT(A). 5. The ld. counsel of assessee submitted that the CIT(A) and AO have erred both on facts and in assessing the income of the appellant at an income of Rs. 19,53,840 as against income of Rs. 14,160 declared by the appellant and submitted that authorities below have grossly erred in making and confirming the addition on account of bogus purchase and commission expenses only on the basis surmises and conjectures with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n entries by the Assessing Officer, then also entire purchase amount cannot be added as income only profit element embedded therein was to be treated as income of assessee. The ld. counsel submitted that when the Assessing Officer has accepted sales recorded by the assessee then the corresponding purchases cannot be doubted as there can be no sales without purchases. The ld. counsel submitted that the impugned amount of alleged purchases cannot be taken as income of the assessee maximum to maximum certain percentage thereof can be added in the hands of assessee as an element of profit therein. 8. Replying to the above, the ld. Senior DR strongly supported that orders of the authorities below and submitted that the Assessing Officer has brought enough material on record to show that the transactions were sham and therefore the ld. CIT(A) rightly uphold the addition of Rs. 18,65,080/- on account of alleged bogus purchases and Rs. 74,603/- on account of payment of commission to entry providers and therefore no interference is called for. 9. On careful consideration of above rival submissions and careful perusal of the order of the authorities below and documents placed by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade payment to the respective parties through banking channel and no sum or amount has never been introduced in the books of accounts rather amounts has gone out of coffer of assessee. The assessee also challenge of section 68 of the Act on the said premise. The assessee also alleged that the authorities below has relied on the statements of third party which cannot be taken into consideration against the assessee unless the assessee is given an opportunity to cross examine on him. These contentions have not been met or rebutted by the ld. CIT(A) while adjudicating the grounds no. 2 to 6 of assessee. 11. It is also pertinent to take respectful cognizance of judgment of Hon'ble Supreme Court in the case of PCIT vs. Tejua Rohitkumar (supra) wherein it was held that purchases cannot be treated as bogus where the purchases made by assessee-trader were duly supported by bills and payments were made by account payee cheque, seller also confirmed transaction and there was no evidence to show that amount was recycled back to assessee. From assessment order page 4 to 8, I note that the Assessing Officer has relied on the statement Mrs. Surbhi Chandra and he has reproduced her statement fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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