9911796707
TMI Blog2024 (11) TMI 389X X X X Extracts X X X X X X X X Extracts X X X X ..... be purchased from the four entities in question, was used by the assessee in its activities. The stock registers produced by the assessee were not rejected by the AO. It is also apparent that the assessee had established that it made payments through banking channels against the supply of materials, which were duly reflected in its stock registers. As noted by ITAT, there is no evidence to suggest that the amounts paid by the assessee for the supplies booked in its books of accounts had been returned to the assessee in a form of cash or through any accommodation entry. It is clear from the above that the controversy involved is fact-centric and revolves on the question whether, in fact, the purchases booked in the books of accounts were wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments and material produced by the Assessee. 3. The controversy essentially relates to disallowance of purchases by the assessee aggregating Rs. 7,86,21,320/- from the following four entities: S. No. Name of the parties Amount of purchase 1 Mohan Ram Trading Co. Rs. 1,25,40,049/- 2 Shyamji Traders Rs. 25,79,978/- 3 Ganga Trading Co. Rs. 85,01,193/- 4 U-Tek Sales Corporation Rs. 5,50,00,000/- Total Rs. 7,86,21,320/- 4. In the aforesaid context, the Revenue had projected the following questions of law for consideration of this Court: A. Whether the Ld. ITAT erred in deleting the addition of Rs. 7,86,21,320/- made by the Assessing Officer on account of disallowance of bogus purchases particularly when the assessee failed to prove identity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rfering in the additions made by the AO and having completely failed to take note of Section 69C of the Act have defeated and rendered nugatory the deeming fiction of law employed by Parliament therein? D. Whether the forums below while interfering against the addition made by the AO have failed to appreciate that the approach taken by them of carrying out a valuation is squarely in the teeth of the judgment of this Court in CIT v. Aar Pee Apartments P. Ltd., [2009 SCC OnLine Del 4224]? 6. On a bare perusal of the assessment order dated 28.03.2013, it is apparent that no additions were made by the Assessing Officer (hereafter the AO) under Section 69C of the Act. Further, neither the assessment order nor the appellate order passed by the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... summons issued to the said parties under Section 131 of the Act were also returned back unserved. 11. On the aforesaid basis, the AO had concluded that the purchases booked in the books of accounts were not genuine, and disallowed the same. 12. To counter the aforesaid allegations, the assessee produced several documents including its books of accounts, inwards register, the goods receipt notes (hereafter the GR notes) as well as written statements, which duly reflected that the assessee had received the material against the said purchase. The assessee also explained that the business was a conducted in an unorganized sector and the suppliers of construction material are mainly illiterate persons operating in grey markets. The assessee also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition. The learned CIT(A) surmised that part of the expenditure must have been incurred in cash and accordingly, disallowed 20% of the expenditure in question. 16. Accordingly, the learned CIT(A) passed an order dated 08.08.2024 reducing the addition made by the AO from Rs. 7,86,21,320/- to Rs. 1,96,55,330/-. 17. The said order passed by the learned CIT(A) was appealed by the Revenue as well as the assessee (ITA No. 4907/Del/2014 and ITA No. 6102/Del/2014) which was culminated into the impugned order. 18. The learned ITAT found that the disallowance of expenditure is not sustainable and found that the evidence and material produced by the assessee establish that it had incurred the expenditure as claimed. The learned ITAT found that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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