ACIT 25(3), MUMBAI vs. BIPIN NANUBHAI PANCHAL, MUMBAI

आदेश / O R D E R Per Joginder Singh (Judicial Member) The Revenue is aggrieved by the impugned order dated 28/07/2014 of the Ld. First Appellate Authority, Mumbai.

2.2 We have considered the rival submissions and perused the material available on record. Before coming to any conclusion, we are reproducing hereunder, the relevant finding recorded by the Ld. Commissioner of Income Tax (Appeals) for ready reference and analysis:-

“I have gone through the findings of the AO and the submissions of the appellant with regard to the above. The main point being made by the AO as brought out in her conclusion above' is. That the purchases as such are not bogus. However, what she has doubted is that these dealers did not seem to be genuine since they appear in the list of sales tax department as suspicious dealers. Interestingly the AO has accepted the version that somehow the goods have entered into the regular business and she concludes that 'the assessee has incurred expenditure on such purchases which is not explained. The purchases are not being treated as bogus or sham, rather the expenditure on such purchases which is not explained. It is not clear as to what does the Assessing Officer mean when she says that the expenditure on purchases is unexplained when she is not investigating about the source of payment made by the appellant to the sellers including the 7 sellers mentioned above? The Assessing Officer has also not proved her other contention that even though the appellant made payments by account payee cheques then the said amounts were withdrawn in cash by the seller and then how the same is remitted back to the appellant. In the absence of such findings and also in light of the fact that the ÄO is herself accepting that purchases have been made, the issue of unexplained investment does not appeal to be the case of the appellant. Furthermore, the appellant has submitted copy of purchase bills, copy of delivery challans, vouchers for freight insured charges and also extract of goods inward register apart from the evidence of having made the payments in cheque and the MVAT registration details of supplies. In the light of the above facts, I am inclined to agree with the submissions of the appellant that the purchases cannot be treated as bogus or doubtful when he has discharged his entire onus to substantiate the purchases made by him. Merely because the sellers appear in the list of suspicious dealers would not be enough to doubt the genuineness of purchases from the above parties in light of the above facts. In the result, the appeal is allowed.” 7.

2.3 If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, we note that while denying the relief to the assessee, the ld Assessing Officer asked the assessee to furnish the list of persons, from whom purchases were claim to be made. However, the ld. Assessing Officer, on the basis of the list of suspicious dealer by the Sales-Tax Department made the addition. Fact remains that the payments were made through crossed account payee cheques and credited to the respective account. There is no evidence on record that the cash was withdrawn and remitted to the purchase of. The assessee furnished the relevant details of the parties as has been mentioned at page No. 7 of the impugned order. The Ld. Commissioner of Income Tax (Appeals) duly considered the factual matrix and found that the VAT registration number of all the parties were valid at the time when purchases were made by the assessee. The assessee duly offered the explanation with respect to genuineness of the purchases and the documents relied upon by the assessee were not found to be fictitious. The contention of the Assessing Officer that cash was withdrawn and returned back to the parties is also not proved, even there is no such finding in the assessment order. The assessee duly produced the purchase bills, copies of the delivery challans, vouchers of freight insured charges and also the extract of goods inward register along with the evidence of payment made through cheque and the VAT registration details of the suppliers. The totality of facts clearly indicates that the presumption cannot take the shape of evidence, however, strong it may be unless and until it is corroborated with material evidence. Therefore, we find no infirmity in the conclusion drawn by the Ld. Commissioner of Income Tax (Appeals). It is affirmed, resulting into dismissal of appeal of the Revenue.

Finally, the appeal of the Revenue is dismissed.

This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 01/11/2016.