J.K.ENGINEERING CORPORATION,HOWRAH vs. I.T.O.,WARD-47(2), KOLKATA

The sole issue that arises in this appeal for our adjudication is whether the allegation of the revenue that the assessee has made bogus purchases of Rs.11,85,227/- from two parties is correct or not. The Assessing Officer assessed a percentage of these purchases as income from the assessee. The two parties are M/s. Singh Mercantile (P) Ltd. (Rs.5,00,010/-) and M/s. Durga Commodeal (P) Ltd. (Rs.6,85,217/-). The Assessing Officer depended on the information received from the investigation wing of the Income Tax Department which conducted a search operation in the case of Shri Sanjiw Kumar Singh, u/s 132 of the Act. Shri Sanjiw Kumar Singh, is alleged to have stated, in his statements that, he is engaged in jamakharchi or accommodation entry business.

The assessee’s case is that, purchases from M/s. Singh Mercantile, does not pertain to the current financial year. The said purchases were made for the Assessment Year 2009-10. This fact was not contradicted by the ld. D/R. Thus, we Assessment Year: 2011-12 J.K. Engineering Corporation direct the Assessing Officer direct the Assessing Officer to delete the gross profit addition made on account of to delete the gross profit addition made on account of these purchases during the impugned Assessment Year. these purchases during the impugned Assessment Year.

Coming to the purchases from M/s. Durga Commodeal Pvt. Ltd., the assessee Coming to the purchases from M/s. Durga Commodeal Pvt. Ltd., the assessee Coming to the purchases from M/s. Durga Commodeal Pvt. Ltd., the assessee submits that no such purchases were made by him and the purchases were submits that no such purchases were made by him and the purchases were submits that no such purchases were made by him and the purchases were made from M/s. Durga Trading Corporation. It was further submitted that the material from M/s. Durga Trading Corporation. It was further submitted that the material from M/s. Durga Trading Corporation. It was further submitted that the material purchased from M/s. Durga Tradi purchased from M/s. Durga Trading Corporation, was in turn sold to M/s. Tata Power g Corporation, was in turn sold to M/s. Tata Power Co. Ltd., Jojlera Power Plant, Jamshedpur, for a profit and that sale proceeds were Co. Ltd., Jojlera Power Plant, Jamshedpur, for a profit and that sale proceeds were Co. Ltd., Jojlera Power Plant, Jamshedpur, for a profit and that sale proceeds were received by way of account payee cheques. The invoices giving the sales tax numbers eived by way of account payee cheques. The invoices giving the sales tax numbers eived by way of account payee cheques. The invoices giving the sales tax numbers etc. were produced before me. etc. were produced before me. 4.1. The ld. D/R, on the other hand, submits that the firm M/s. Durga Trading The ld. D/R, on the other hand, submits that the firm M/s. Durga Trading The ld. D/R, on the other hand, submits that the firm M/s. Durga Trading Coproration is managed by Shri Sanjiw Kumar Singh a Coproration is managed by Shri Sanjiw Kumar Singh and hence it is a bogus purchase a bogus purchase as per the admission made during the course of search. as per the admission made during the course of search.

In my view, the assessee has discharged the burden of proof that lay on him In my view, the assessee has discharged the burden of proof that lay on him In my view, the assessee has discharged the burden of proof that lay on him with regard to these purchases and the revenue has not produced adequate evidence with regard to these purchases and the revenue has not produced adequate evidence with regard to these purchases and the revenue has not produced adequate evidence in support of the above. No copy of the alleged statement is produced. The addition is No copy of the alleged statement is produced. The addition is No copy of the alleged statement is produced. The addition is bad in law. Hence the same is deleted. Hence the same is deleted.

In the result, appeal of the assessee is allowed. In the result, appeal of the assessee is allowed. Kolkata, the Kolkata, the 10th day of January, 2020.