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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI G. MANJUNATHA, ACCOUTANT MEMBER
This is an appeal by the Revenue against order dated 16th October 2015, passed by the learned Commissioner (Appeals)–22, Mumbai, for the assessment year 2011–12. The only effective ground raised by the Revenue reads as under:–
“1. Assessing Officer On the facts and in the circumstances of the case and in law, the learned Commissioner (Appeals) erred in deleting the addition of ` 66,92,040, made on account of bogus purchases made from the suppliers, without appreciating the fact that the notices issued by the Assessing Officer to the impugned suppliers under section 133(6) of the Act so as to 2 M/s. S.D. Material Handlers Pvt. Ltd. cross examine the authenticity of the fact of having made the purchases from the suppliers, have been returned un–served by the Government Postal Authority with no existence of the purported suppliers.”
When the appeal was called for hearing, no one was present on behalf of the assessee in spite of issuance of notice of hearing. From the order sheet entries, it is seen that on earlier occasions also, when the appeal was fixed for hearing, the assessee did not appear. In view of the above, we proceed to dispose off the appeal ex–parte after hearing the learned Departmental Representative.
Brief facts are, the assessee a company is engaged in the business of material handling and erection of heavy equipment on contract basis and providing equipment on hire. For the assessment year under dispute, the assessee filed its return of income on 22nd August 2011, declaring total income of ` 1,07,29,850. During the assessment proceedings, the Assessing Officer wanted to verify the genuineness of purchases worth ` 66,92,040, claimed to have been made by the assessee from five parties. Therefore, he called upon the assessee to furnish supporting documentary evidence to prove the purchases. As observed by the Assessing Officer, the assessee, vide letter dated 26th December 2013, submitted copy of bills, delivery challan, account confirmation, copy of ledger in its books. However, the Assessing Officer was not satisfied with the evidences submitted
3 M/s. S.D. Material Handlers Pvt. Ltd. by the assessee. He observed, the assessee failed to furnish confirmation from the parties stating that they have actually sold and delivered goods to the assessee. To further verify the genuineness of purchases the Assessing Officer sent notices under section 133(6) of the Act to the concerned sellers to furnish certain information. It is observed by the Assessing Officer, the notices issued under section 133(6) evoked no response from four parties and in respect of one party, it could not be served. Therefore, the Assessing Officer alleging that the assessee was unable to prove the genuineness of purchases treated them as bogus and added back to the income of the assessee. Being aggrieved of such addition, assessee preferred appeal before the first appellate authority.
The learned Commissioner (Appeals) after considering the submissions of the assessee and evidence brought on record, deleted the addition made by the Assessing Officer. While doing so, he relied upon the decision of the Hon'ble Supreme Court in Anis Ahmad & Sons v/s CIT, 297 ITR 441.
Learned Departmental Representative relied upon the ground raised and observations made by the Assessing Officer.
We have heard the learned Departmental Representative and perused material on record. It is evident, during the assessment
4 M/s. S.D. Material Handlers Pvt. Ltd. proceedings to prove the purchases made of ` 66,92,040, the assessee produced purchase bills, delivery challan, account confirmation, copy of ledger account, etc. Only because the confirmation produced by the assessee were not in a particular mode and manner and the notices issued under section 133(6) of the Act to the sellers were not responded to or not served the Assessing Officer treated the purchases made by the assessee as bogus and in the process has completely brushed aside the evidences produced by the assessee. The learned Commissioner (Appeals) after examining the material on record has found that the purchases were supported by documentary evidences such as copies of purchases order, copies of invoices for purchases with suppliers’ address, VAT/CST registration number with description of spare parts and cost, delivery challan at assessee’s side, confirmation of purchase transactions and receipt of payment from suppliers with their PAN number, bank statements showing payment made by cheques, etc. Thus, it is established on record that while the assessee has brought material / evidence on record to prove genuineness of the purchases made, the Assessing Officer completely ignoring them has disallowed the purchases on flimsy grounds of non– submissions of confirmation in a particular manner and non–furnishing of information by the suppliers in response to the notice issued under section 133(6) of the Act. In our view, when the assessee has brought
5 M/s. S.D. Material Handlers Pvt. Ltd. evidences on record to prove the genuineness of the purchases, the Assessing Officer is duty bound to examine them. Before discarding the evidences brought on record as false or unacceptable, the Assessing Officer must conduct proper enquiry to falsify the evidence. In the present case, the Assessing Officer has finished his job by simply issuing notices under section 133(6). Failure to respond to the notice under section 133(6) by itself cannot lead to the conclusion that the purchases are non–genuine. When the assessee has furnished delivery challan, purchase invoice, account confirmation, bank statement, etc. to prove the genuineness of purchases, the Assessing Officer cannot treat the purchases as bogus by completely ignoring such evidence. In view of the aforesaid facts, we find no reason to interfere with the decision of the learned Commissioner (Appeals) on this issue. Ground raised is dismissed.
In the result, Revenue’s appeal is dismissed. Order pronounced in the open Court on 11.04.2018