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TMI Blog2024 (4) TMI 888X X X X Extracts X X X X X X X X Extracts X X X X ..... beyond reasonable doubt that the amounts received from these two parties are not merely loan simplicitor but only advance received for sale of goods. It is a fact that the sale of goods had indeed happened to these two parties from the assessee which was duly accepted by the revenue in Asst Year 2016-17 and also by the VAT authorities. Hence there is no question of treating the amounts received as advance for sale of goods as unexplained cash credit u/s 68 of the Act during the year under consideration. Accordingly, we do not find any infirmity in the order passed by the ld. CIT(A) granting relief to the assessee. Decided against revenue. Bogus purchases - AO disbelieved the entire contentions of the assessee and proceeded to treat the purchases made from this supplier as ingenuine and disallowed a sum - CIT(A) deleted addition - HELD THAT:- We find that the ld. CIT(A) had given a categorical observation that on perusal of the documents filed by the assessee before the ld. AO, the details of purchase of rice from M/s Prashant Agro Foods and corresponding sales of such purchases were duly verifiable from the day to day stock register which was duly attested by the Market Committee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iz. M/s Gagan Enterprises of Rs 1,17,23,564/- and M/s R S Agro Foods of Rs 61,99,752/-, the summons issued u/s 131 of the Act were returned back unserved with postal remarks no such person exists in the said address . Another summons was issued by the ld. AO on 31.10.2017 to these two parties which remained unserved. Inspector of Income Tax was deputed to make independent enquiries and serve the summons u/s 131 of the Act to the aforesaid two parties. The Inspector reported that the said parties / concerns mentioned are not existing on the said address. Infact the Inspector Report stated that in the address of M/s R S Agro Foods, it was found that various tenants were using the said premises for residential purposes. With regard to address of M/s Gagan Enterprises, the Inspector reported that only name board of that party was available but the shop / office was found to be closed and hence summons could not be served on both the concerns. The ld. AO further observed that survey operation was carried out in the case of Shri Hitesh Jain, Proprietor of M/s Mittersain Rajesh Kumar, Anaj Mandi, Karnal on 22.5.2017, wherein he had conferssed in his statement that he used to provide accom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce to summons issued u/s 131 of the Act to the transporters of Karnal, the Partner / Proprietor of some of the transport companies namely M/s Balaji Transport Co., M/s Mahadev Transport Company and Shri Sai Road Carriers had attended the proceedings but all these persons had stated that they had only issued blank bilties to the parties and not a single word has been written on bilties by them. The ld. AO accordingly sought to disbelieve the explanation of the assessee that unsecured loans received during the year under consideration from M/s Gagan Enterprises and M/s R S Agro Foods got converted into sales in the next financial year. Further in order to verify the veracity of the sales made by the assessee to M/s R S Agro Foods and M/s Gagan Enterprises, the ld. AO issued summons u/s 131 of the Act to the transporters i.e. Sh. Narender Kumar Arora, Proprietor Shri Sai Road Carriers , M/s Mahadev Transport Company and M/s Balaji Transport Company. In compliance thereon, all the persons attended the proceedings and stated they had only issued blank bilties eto the party and not a single word was written on the bilties by them. When asked to produce the confirmed copy of account of M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prises, copy of stock register attested by the market committee with respect to stock out for sale to M/s R S Agro Foods and M/s Gagan Enterprises in next year,copy of ledger account of Sale of Rice in next year, copy of ITR acknowledgement of the proprietors of M/s R S Agro Foods and M/s Gagan Enterprises and Confirmation from the said parties. It was also submitted that Sh. Sanjeet Kumar , Proprietor of M/s Gagan Enterprises had expired and hence could not be presented in person before the ld. AO and that after his demise, the business premises was closed. We find that the ld. CIT(A) had categorically observed that the assessee had produced the books of accounts along with day to day purchase, transactions of sales in the succeeding year where sales to these two parties were part of the total sales and declared in the VAT returns which has been accepted. Further the income tax returns of Asst Year 2016-17 also reflected the total sales made by the assessee which admittedly included the sales made to these two parties. The stock registers maintained by the assessee clearly indicated the outflow of stocks from the side of the assessee. All sales were made through regular banking ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice in the reply letter filed with facts and figures. The ld. AO however disbelieved the entire contentions of the assessee and proceeded to treat the purchases made from this supplier as ingenuine and disallowed a sum of Rs 1,06,53,404/- in the assessment. 11. The assessee pleaded before the ld. CIT(A) that the ld. AO vehemently relied on the report of the Inspector to draw adverse inference against the assessee qua the purchases made by the assessee from M/s Prashant Agro Foods. But the report of the Inspector of Income Tax was never produced to the assessee for its rebuttal. The alleged deficiencies in the bills i.e. Bill No. 1776 dt 4.1.2015 and Bill No. 1775 dt 6.1.2015 was duly explained by the assessee and it was specifically explained that both the bills are dated 4.1.2015 only and not as stated by the ld. AO. The details of the same are as under:- Bill No. 1775 -G.R. No. 5019 dt 4.1.2015- 248.40 quintals for Rs 8,15,000/- Bill No. 1776 -G.R. No. 5020 dt 4.1.2015- 249.90 quintals for Rs 8,19,922/- 12. The ld. AO had observed that no purchase of rice had been made from 1.1.2015 to 5.1.2015. In this regard, it was explained that goods in stock register could be entered onl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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