NARSEY BHOJRAJ SONS,MUMBAI vs. ACIT 19(2), MUMBAI

We heard the parties and perused the record. This is a second round of proceedings. In the first round of proceedings, the order was passed by the Co-ordinate Bench of the Tribunal on 9.12.2009 in the appeal filed by the Revenue in ITA No.1019/Mum/2000. 2 I.T.A. No.4662/Mum/ 2012

The facts in brief are that the AO, during the course of original assessment proceedings, asked the assessee to furnish the list of sundry creditors from whom purchases to the tune of Rs.6.96 crores were made. The assessee, however, furnished details relating to purchases worth Rs.6.81 crores. The difference amount of Rs.14.94 lakhs was held to be unverifiable purchases by the AO and accordingly he disallowed 20% of the same. The ld. CIT(A), however, deleted the addition. After deciding so, the ld. CIT(A) restored the matter to the file of the AO to examine the claims of the assessee. It is pertinent to note that the assessee had claimed that due to certain clerical errors full details relating to purchases were not given. When the revenue filed the appeal before the Tribunal challenging the order passed by the ld. CIT(A), the Tribunal vacated the order of ld.CIT(A) in deleting the addition and confirmed the order of ld.CIT(A) in restoring the matter to the file of the AO.

In the set aside proceedings, according to the ld.AR, the assessee filed the details relating to the purchases of Rs.14.94 lakhs vide its letter dated 9.8.2010 along with the photocopies of relevant purchase bills. According to Ld A.R, the AO considered those details at the fag end of the proceedings and further observed that the assessee has failed to furnish the original bills and delivery challans and accordingly, confirmed the addition of Rs.2,98,981/- again. In the appellant proceedings, the ld.CIT(A) upheld the addition and hence the assessee has filed this appeal before us.

At the time of hearing, the ld. AR submitted that even though the assessee filed the details of purchases of Rs.14.94 lakhs along with the copies of bills, the AO did not ask the assessee to produce delivery challans as well as original copies of the bills. Accordingly, the ld AR submitted that the AO was not justified in not properly examining the letter dated 9.8.2010 filed before the AO along with the copies of bills. The ld. AR submitted that he has brought the copies of original bills and hence, there is no reason to suspect the purchases.

On the contrary, the ld. DR supported the order of the ld. CIT(A).

Having heard the rival contentions, we are of the view that the AO has made the impugned addition, without properly examining the copies of the purchase bills furnished by the assessee. In our view, the impugned addition has been made on the basis of suspicion without finding any fault with the documents as well as the books of the account. Accordingly, we are of the view that the order passed by the ld. CIT(A) on this issue is not sustainable. Our view is further fortified by the fact that the ld.AR has brought the copies of the original bills to support the contention of the assessee. Since no defect has been pointed out by the tax authorities in respect of purchases of Rs.14.94 lakhs, we are unable to agree with the order passed by the ld. CIT(A) on this issue. Accordingly, we set aside the order of ld. CIT(A) on this issue and direct the AO to delete the impugned addition.

In the result, the appeal filed by the assessee is allowed.

DR, ITAT, Mumbai concerned गधर्ा पधईर / Guard file. 6. आदेशधनुसधय/ BY ORDER,सहधमक ऩंजीकधय (Asstt.