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TMI Blog2023 (12) TMI 880X X X X Extracts X X X X X X X X Extracts X X X X ..... ACCOUNTANT MEMBER : These appeals filed by the assessee are directed against the common order of ld. CIT (Appeals)-3, Gurgaon dated 23.07.2019 for the Assessment Years 2013-14, 2014-15 2015-16. 2. Since the grounds are common and the facts materials are also common, we are referring to grounds of appeal for AY 2013-14 which read as under :- 1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in assuming jurisdiction u/s 153C and that too for this year and further erred in passing the impugned assessment order, more so when 'satisfaction' has not been -recorded by AO of the searched person and when there was no incriminating document was found. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in assuming jurisdiction and framing the impugned assessment order u/s 153C, is bad in law and against the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds . 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... given below, pertaining to the assessee, M/s Super Connection India Pvt. Ltd. were found and seized:- S.No. Name of the company Details of documents seized Page No./Annexure No./Party No. 1. Super Connections India Pvt. Ltd. Computerized Books of A/c and hard Copy of Trial Balance 47, 48 49/A-7/OS-I AO proceeded to examine the issue and after elaborately discussing the same, he concluded as under :- 6.1 The reply of the assessee has duly been considered and not found tenable. The assessee has failed to provide any comment/ response/ submission with regard to the findings/ observation as narrated above. Therefore it is crystal clear that M/s Super Connections India Pvt. Ltd. is a paper entity operated by the owner's of M/s Orient Craft Limited for the purposes of evasion of taxes. 6.2 Further, in view of the findings, it is a fit case for rejection of books of accounts and therefore, the books of accounts of the company is hereby rejected is] s 145(2) of the Income. Tax Act, 1961. 6.3 Accordingly the expenses booked by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant, M/s Super Connections India Pvt Ltd. (iii) This addition in the hands of M/s Orient Craft Ltd. was confirmed vide appellate order dated 30.03.2019 by holding that the appellant company was used for booking bogus purchase entries and routing of money generated through accommodation entries. (iv) As this addition has been confirmed on substantive basis in the case of M/s orient Craft Ltd, therefore, the addition made in the case of appellant company made on protective basis cannot be sustained for all the years under consideration i.e. AY 2013-14, AY 2014-15 A.Y. 2015-16. However, if the substantive addition in the case of M/s Orient Craft Ltd. is deleted at any stage, the addition deleted here would revive. (v) Further, addition to the extent discussed hereunder is confirmed in the hands of appellant company in the years under consideration. (vi) As it has been held that the appellant company in the years under consideration was only being used as conduit for booking bogus purchases by M/s Orient Craft Ltd., it is apparent that the appellant company would have been paid commission/brokerage for providing entries for bogus purchases by M/s Orient Craft Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ric not only to the assessee company but to other garment exporters. Other indicators such as percentage ratio of material to sale etc. also establish the genuineness of the purchases. We do not agree with the observations made by the first appellate authority. In our considered opinion, assessee has been successful to discharge the burden of proving the purchase from M/s Super Connection India P Ltd. In the result, ground no. 12 13 of the assessee's appeal of the assessee are allowed and the addition of Rs. 17,87,17,045 is deleted. (Para 63 at Page 59-60 of the order of Hon'ble Tribunal in the case of M/s Orient Craft Ltd. - A Y 2013-14) (PB 101, 154-155). In view of the above findings, it is respectfully submitted that the very foundation of case of the Ld. AO as well as the alleged commission confirmed by Ld. CIT(A) does not survive and therefore it is humbly prayed that the addition confirmed by Ld. CIT(A) may please be deleted. It is not out of place to submit that there is no appeal by the revenue to the best of the knowledge of the appellant. Further, it is respectfully submitted that similar matter in the case of other concerns from whom M/s Orient Craft Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at evidence filed by the assessee self-serving documents and circumstantial evidence leads to the conclusion of A.O. It would be enough for us to say that voluminous documentary evidences filed by the assessee are clearly establishing the genuineness of purchases fabric from M/s Super Connection India P. Ltd. We have seen that the vendor company is supplier of the fabric not only to the assessee company but to other garment exporters. Other indicators such as percentage ratio of material to sale etc also establish the genuineness of the purchases. We do not agree with the observations made by the first appellate authority. In our considered opinion, assessee has been successful to discharge the burden of proving the purchase from M/s Super Connection India P Ltd. In the result, ground no. 12 13 of the assessee s appeal of the assessee are allowed and the addition of Rs. 17,87,17,045/- is deleted. 9. Similarly, ITAT in the case of Orient Craft Ltd. in ITA Nos.3311/Del/2019 5038/Del/2019 for AY 2014-15 vide order dated 24.09.2021 deleted the substantive addition in the hands of the aforesaid assessee by holding as under :- In view of the above pleadings and evidences file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as proved that the material was purchased from the vendors involved here and payments have been made through banking channel. Other evidences as referred clearly establish the purchase made by the assessee. We do not want to discuss each and every evidence and it would suffice to hold that in the light of these evidences which have not been rebutted with the help of any cogent material, purchases made by the assessee from the above said vendors cannot be disbelieved. The adverse observations made by the A.O. in the assessment order have been met by the assessee one by one and paper pages 1873- 1878 reproduced also above by us and we have taken ourselves to these adverse observations and response of the assessee and we agree with the Ld. Counsel for the assessee that the adverse observations made by the A.O. are not of substance and misplaced on facts. CIT(A) too has mentioned in his order the adverse observations of the A.O. only which in our opinion are misplaced on facts. Contention of CIT(A) that evidence filed by the assessee self-serving documents and circumstantial evidence leads to the conclusion of A.O. It would be enough for us to say that voluminous documentary evidences ..... 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