Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, VIRTUAL COURT
Before: SHRI M.BALAGANESH, AM & SHRI PAVAN KUMAR GADALE, JM Shri Piyush D Gada
आदेश / O R D E R PER M. BALAGANESH (A.M):
This appeal in A.Y.2008-09 arises out of the order by the ld. Commissioner of Income Tax (Appeals)-25, Vashi, Navi Mumbai in appeal No.CIT(A)-25/IT-268/2015-16/280 dated 12/09/2018 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) by the ld. Income Tax Officer – 27(2)(5) (hereinafter referred to as ld. AO).
The only effective issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in deleting the disallowance made on account of bogus purchases in the facts and circumstances of the instant case.
We have heard ld. DR. None appeared on behalf of the assessee. We find that the assessee is an individual, running a proprietary concern in the name and style of M/s. Package engaged in manufacturing of Corrugated Boxes. During the course of re-assessment proceedings, the assessee filed copy of bills of purchases and bank statement showing the payments made to the party from whom purchases had been made and submitted that the purchases shown by the assessee from the said party are genuine purchases.
3.1. We find that assessee had made purchases from M/s Arun Paper and Iron Industries to the extent of Rs 53,49,029/- whose name appeared in the tainted list of hawala dealers in the website of Sales Tax department, Government of Maharashtra and pursuant to that information, the ld. AO sought to treat the purchases made from the said suppliers as bogus. The assessee produced the details of sales made out of corresponding purchases which was not doubted by the ld. AO. On perusal of ledger account filed by the assessee, it is found that the actual purchases from M/s. Arun Paper and Iron Traders, during the year under consideration is Rs.75,74,618/-. The ld. AO issued notice u/s.133(6) of the Act to the concerned supplier M/s. Arun Paper and Iron Traders calling for various details. The concerned supplier appeared before the ld. AO in response to notice u/s.133(6) of the Act and furnished the following details before him:-
Ledger account of the assessee in his books of account Extract of bank statement highlighting specific transaction with the party Sales Bill copy and Delivery Challan Sales Tax Challan & Return ITR return with all annexure 3.2. Despite the fact of the supplier giving evidence of delivery of goods to the ld. AO and also confirming the entire transactions made with the assessee, the ld. AO found lot of deficiencies in the documents submitted by the concerned supplier before him and in view of the fact that assessee had made sales out of such purchases, he concluded that the assessee in the instant case could have made purchases only from grey market and had made sales thereon. Accordingly, he proceeded to estimate the profit embedded in such bogus transactions @12.5% and made addition of Rs.9,46,827/- in the assessment.
3.3. We find that the ld. CIT(A) had deleted the entire disallowance on the ground that the supplier had duly confirmed the entire transaction that was carried out with the assessee before the ld. AO in person. In that scenario, we find that there is no dispute that the supplier had made himself present before the ld. AO in person in response to notice u/s.133(6) of the Act and had submitted the necessary documents. In case if the ld. AO finds some deficiencies in the submission of those documents by the supplier, then it is for the ld. AO to confront the said supplier and not merely disallow the purchase made by the assessee.
There is no dispute that sales have been made out of the corresponding purchases. There is no dispute that proof of delivery of goods together with all the relevant documents had been submitted directly by the supplier before the ld. AO. In these circumstances, we do not find any infirmity in the action of the ld. CIT(A) accepting the claim of the assessee and deleting the disallowance made on account of bogus purchases. Accordingly, the grounds raised by the revenue are dismissed.
In the result, appeal of the revenue is dismissed.
Order pronounced on 10/09/2020 by way of proper mentioning in the notice board.