TINTAR RETAL CORPORATION,MUMBAI vs. ASST CT CIR 12(1), MUMBAI

(A.Y. 2008-09) M/s. Tintar Retail Corporation Mumbai 2. The only issue in the grounds of appeal of the assessee is that Ld.CIT(A) erred in upholding the disallowance of Rs.38,78,082/- out of purchases made by the assessee.

Before us, the Learned Counsel for the assessee submitted that notices were issued u/s 133(6) randomly to twenty-two parties and out of which six parties could not reply to the said notices. On pointing out this to the assessee, the assessee made efforts to obtain confirmations by mailing to the said parties requesting them for confirmations, letters were also posted by speed post requesting them for the confirmation letters. The Learned Counsel for the assessee submits that since the Assessment proceedings were completed and Assessment Order was passed and the confirmations were received subsequently the same were filed before Ld.CIT(A) explaining that the confirmations could not be furnished before Assessing Officer as they were received subsequently. It was explained that it took some time for (A.Y. 2008-09) M/s. Tintar Retail Corporation Mumbai obtaining confirmations and therefore the genuineness of the transactions cannot be doubted. It was explained that the assessee furnished all the information regarding the purchases before the Assessing Officer, books of Accounts were examined, no defects were pointed out. It was also explained that the books were audited, payments were all made by banking channels and since confirmations were filed before Ld.CIT(A) it was pleaded that the disallowance to be deleted.

The Ld.DR vehemently supported the orders of the lower authorities. We have heard the rival submissions, perused the orders of the authorities below. As could be seen from the Assessment Order that the notices sent to the parties u/s 133(6) were not responded only by six parties out of twenty- two parties. The assessee furnished confirmations before the Ld.CIT(A) from these six parties as they were not received from the party’s before completion of assessment. The Ld.CIT(A) simply stated that the closing balances as on 31.03.2007 do not match with the opening balances, could not point out any major defects in the confirmations. This is not the ground on which the purchases were treated as not genuine. For want of confirmations the purchases were treated as not genuine. Further, we do not see any query from the Ld.CIT(A) to the assessee to reconcile difference as pointed by him. The Ld.CIT(A) also carried away with the observations of (A.Y. 2008-09) M/s. Tintar Retail Corporation Mumbai the Assessment Order that since no confirmations filed before Assessing Officer in spite of several requests and parties were not produced before the Assessing Officer the transactions are bogus. We do not agree with this view. Assessee furnished the confirmations before the Ld.CIT(A), no major defects were found out in the confirmations therefore these confirmations as furnished by the assessee appearing at Pages 47 to 64 of the Paper Book cannot be brushed aside as non-genuine. Even otherwise entire purchase from these parties cannot be treated as bogus purchases when on the other hand the sales from out of these purchases were accepted. In the circumstances we hold that the purchases from these six parties cannot be treated as bogus purchases. Thus we reverse the order of the Ld.CIT(A) and we direct the Assessing Officer to delete the disallowance made towards bogus purchase.

In the result appeal of the assessee is allowed.