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Income Tax Appellate Tribunal, MUMBAI BENCH “B”, MUMBAI
Before: SHRI B.R.BASKARAN & SHRI PAWAN SINGH
O R D E R
PER PAWAN SINGH, JM:
The present appeal is filed by the assessee against the order passed by CIT(A)-31, Mumbai dated 23.01.2012 in respect of Assessment Year (AY) 2007-08 against confirming of addition of Rs. 3,36,000/- as bogus purchase.
The brief fact of the case are that trading of home network systems i.e. CCTV Camera and also partner in M/s Electro World having 50% share, in Electro World filed return of income for AY 2007-08 on 31.10.2007 declaring total income at Rs. 4,14,620/-. The return of income was selected for scrutiny and the Assessing Officer (AO) besides the other addition disallowed a sum of Rs. 3,36,943/- on account of bogus purchase in the assessment order dated 30.11.2009. 3. Against the order of assessment, the assessee filed an appeal before the CIT(A) and the CIT(A) confirmed the addition and dismissed the appeal of the assessee in its order dated 23.01.2012 against which the present appeal is filed before us. 4. We have heard Ld. Authorised Representative (AR) of the assessee and Departmental Representative (DR) for revenue and perused the material available on record.
The AO while making the addition has observed that during the course of assessment proceedings, notice u/s. 133(6) were issued for calling information from certain sundry creditors and out of which the notice issued to M/s. Cellnet remained unserved through postal authority and the assessee was asked to furnish the confirmation and all details. The assessee failed to furnish the confirmation letters from M/s Cellnet, however, the assessee furnished the ledger account and copy of purchase bills for the year under consideration. The AO further observed that in the statement of account the name of P&N Vinraj is appearing against the payment reflected in the ledger account and the name of Cellnet is not appearing in the bank statement and thus disallowed the amount of Rs. 3,36,943/-. Ld. CIT(A) while dealing with this issue has concluded that the notice could not be served upon the concerned party and on query the party does not exist on the given address and CIT(A) also observed that the part of payment were in cash and which could not be verified and further concluded that in absence of the itemwise quantitative details of the purchase and vis-a-vis a sale and the sales bills has recorded in the ledger account cannot be accepted and confirmed the addition.
The AR of the assessee has argued that each and every query raised by the AO was replied and all details were supplied to the AO as well as CIT(A). 7. The AR of the assessee further drawn our attention to the page no.19 of the Paper Book where the details of ledger account of M/s Cellnet is furnished along with the detail invoices wherein on the invoices it is specifically mentioned “please make cheque payment payable to P & N Vinraj” and such vouchers are available at page no. 20 to 30 of Paper Book, the assessee has also filed the statement of account of Development Credit Bank wherein Cheque No. 694776 of Rs. 50,680/-, Cheque No. 694782 of Rs. 37,564/-, Cheque No. 694784 of Rs. 1,05,125/-, Cheque No. 694787 of Rs. 38,998/- and Cheque No. 727205 of Rs. 21,050/- is shown to have been cleared to P & N Vinraj. The assessee further argued that the amount of Rs. 17,000/- on 27.01.2007, 15,000/- on 26.02.2007, 18,000/- on 17.03.2007 was paid in cash which has been duly shown in the ledger account of M/s Cellnet. The AR of the assessee further argued that mere none- appearance of the parties before the AO cannot be made a ground for making opinion that purchase were bogus and relied upon the judgment of jurisdictional High Court in CIT vs. Nikunj Eximp Enterprises Pvt. Ltd. reported vide 372 ITR 619, Bombay. 8. We have carefully considered the contention of the AR of the assessee and perused the order of AO and CIT(A) and find that the assessee has produced sufficient material including of ledger account of M/s Cellnet, details invoices about the purchase of material and the statement of bank account and the details of the cash payment made to 3 Shri Mohammad Taufiq Navlakhiya the proprietor of Cellnet, the payment through cheques was made in accordance with the contract of the parties which is duly reflected in the invoices and the same is duly proved by the statement of bank account of the assessee and the AO as well as CIT(A) ignored the documentary evidence placed before them.
The Hon’ble jurisdictional High Court in case of CIT vs. Nikunj Eximp Enterprises Pvt. Ltd. had categorically held that none-appearance of supplier before the authorities, not ground to hold purchase bogus, when the copies of invoices for the bank statement indicating the purchase were made available. The principle laid down by the Hon’ble High Court is directly applicable on the fact of the present case even otherwise the assessee has placed sufficient material as stated above before the CIT(A) for showing the transaction as genuine one, hence the addition/disallowance made by AO and confirmed by CIT(A) are liable to be deleted.
In the above circumstances, the appeal filed by the assessee is accepted, the ground raised in the present appeal is rejected. In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on this 12th February, 2016.