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Income Tax Appellate Tribunal, MUMBAI BENCH “D”, MUMBAI
Before: SHRI RAJESH KUMAR & SHRI RAM LAL NEGI
Per Rajesh Kumar, Accountant Member:
The present appeal has been preferred by the Revenue against the order dated 14.03.2016 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2009-10.
The only issue raised by the Revenue in the various grounds of appeal is against the deletion of addition by Ld. CIT(A) of Rs.1,18,22,356/- as made by the AO on account of alleged bogus purchases from M/s. Hinduja Traders Pvt. Ltd.
The facts in brief are that the assessment was framed in this case under section 143(3) of the Act on 26.12.2011
2 M/s. Vivid Visions Trexim Pvt. Ltd. assessing the total income at Rs.1,28,01,995/- under the normal provisions and Rs.98,63,833/- under the special provisions under section 115JB of the Act. Thereafter, the case of the assessee was reopened on 18.02.2013 by issuing notice u/s 148 of the Act after the AO received the information from DGIT (Inv.) that assessee is a beneficiary of bogus purchase bills from M/s. Hinduja Traders Pvt. Ltd. During the assessment proceedings the AO asked the assessee to substantiate the claim of purchases which was replied by the assessee vide letter dated 23.12.2013 filing the ledger extracts of the supplier, copy of tax invoices and details of payments etc. The AO also issued notice under section 133(6) of the Act vide letter dated 24.01.2014 asking the calling for certain details from the supplier which was filed by the supplier on 30.01.2014. Thereafter, the AO also issued summon under section 131 to the supplier company and recorded the statement. During the course of recording of the said statement, the director of the company stated that all the entries were recorded in the books of accounts and he has nothing to add further as the records are very old. Finally, the AO not finding the contentions of the assessee as genuine on the basis that the director of the supplier company has confirmed before the Sales Tax Authority and also during the course of statement recorded under section 131 of the Act that M/s. Hinduja Traders Pvt. Ltd. was engaged in the business of providing accommodation entries and therefore treated the entire purchases as bogus and non genuine and added the same to the income of the assessee by framing assessment under section 143(3) read with section 147 of the Act, 1961 vide order dated 07.03.2014.
3 M/s. Vivid Visions Trexim Pvt. Ltd.
In the appellate proceedings, the Ld. CIT(A) after considering the contentions of the assessee which is reproduced in para 4.1 of the appellate order allowed the appeal of the assessee. The Ld. CIT(A) noted that the letter issued under section 133(6) to M/s. Hinduja Traders Pvt. Ltd. it was duly replied and the said party has confirmed to have supplied the export licenses to the assessee who is also dealing in the export licenses which is tradable item. The Ld. CIT(A) also noted that there is no proof that the withdrawal of cash has taken place after the payment was made to the supplier and thus the AO has failed to bring any evidence on record to prove that the said purchase of export licenses was not genuine and thus deleted the entire addition.
After hearing both the parties and perusing the material on record, we observe that the assessee has purchased export licenses from M/s. Hinduja Traders Pvt. Ltd. which is a hawala operator as per the Sales Tax Department, Government of Maharashtra. This is also undisputed that the said company has confirmed in response to letter under section 133(6) issued by the AO to the said company that the export licenses were in fact supplied to the assessee. The AO has even issued summon to the director of the supplier company and recorded a statement under section 131 of the Act. In the said statement the director has stated that whatever has been sold to the assessee has been recorded in the books of accounts and he has nothing to say further. Besides, the assessee also filed the copies of ledger, invoices and proof of payments to the supplier in order to prove the genuineness of the purchases. The Ld. CIT(A) deleted the addition after observing that the AO has not 4 M/s. Vivid Visions Trexim Pvt. Ltd. brought any evidence on record to prove that the purchases were bogus except relying on the statement given before the Sales Tax Authorities and thus reversed the order of the AO. The deletion of addition by Ld. CIT(A) appears to be based upon correct reasoning is apparent from the record. Even the supplier has confirmed the supply of export licenses as stated hereinabove and confirmed the payment having received from the assessee. Under these circumstances, we are not left with any doubt about the purchases of these licenses as the assessee has further sold these licenses to the third party and realised the payment therefrom which is also proved. Accordingly we are inclined to uphold the order of Ld. CIT(A) by dismissing the appeal of the revenue.
In the result, the appeal of the Revenue is partly allowed.
Order pronounced in the open court on 15.04.2019.