TaxTMI 
TaxTMI 
2013 (2) TMI 707
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the facts and in the circumstances of the case and in law, the learned CIT(A) erred in allowing the relief of Rs. 3,41,238 to the Assessee on account of commission & brokerage as same was not covered in the assessment order which was subject matter as appeal before the learned CIT(A) and it was a covered issue vide order dt. 12.1.2007 of the learned CIT(A)." The Assessee, in its appeal, has raised following grounds of appeal:- "Looking to the facts and circumstances of the case and in law the learned CIT(A) erred in - 1. rejecting the Assessee's ground of appeal that the order passed by the A.O. under section 144 r.w.s. 254 of the Act is to be quashed as void ab initio and bad in law as the provisions of the said sections are not attracted. 2. confirming the disallowance of 25% of the value of purchases from the following parties. 2. Ground no.1 of Revenue's appeal and ground no.2, of Assessee's appeal pertain to same issue, therefore, they are being dealt with together. Brief facts, apropos ground no.1, is that the assessee is a partnership firm which is engaged in the business of manufacturing / trading and export of stainless steel cutlery. The assessee has both ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....so, the purchases should be treated as genuine because the payments have been made through account payee cheques which have been duly debited from its bank account. However, the Commissioner (Appeals) rejected the same after detailed reasons. Aggrieved by the said order, the assessee preferred second appeal before the Tribunal, wherein the Tribunal restored the matter to the file of the Assessing Officer and directed him to admit the additional evidence contained in the paper book and to verify the veracity of the evidence filed and decide the issue afresh. 5. During the second round of the assessment proceedings, in pursuance of the order passed by the Tribunal, the Assessing Officer noted in Para-4 of the assessment order, that despite several notices and opportunities given to the assessee, again the assessee has failed to comply with the notice and substantiate the evidence. Accordingly, he confirmed the addition as was confirmed by the Commissioner (Appeals) during the first round of proceedings. Aggrieved by this, the assessee preferred appeal before the Commissioner (Appeals) wherein it was submitted that the assessee has been maintaining proper books of account which was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Sales Tax Act and Central Sales Tax Act and the entire purchases are genuine on the basis of following documentary evidence which was submitted to the Assessing Officer. "a. copies of the purchase invoices. b. copies of bank statements depicting payments made by way of account payee cheques. c. quantitative disposal of these purchases showing corresponding exports made out of these purchases. d. copies of export invoices, bill of lading, foreign inward remittance certificate. e. sales tax registration certificates both under the Maharashtra Sales Tax Act as well as the Central Sales Tax Act in respect of some of these parties. f. PA No. of one of the party. g. ledger accounts of the parties, their confirmations etc. h. Certificate of Bank certifying that account payee cheques issued by the assessee have indeed been encashed in the bank accounts of the very same parties, i. Copies of account payee cheques issued by the assessee and their encashment along with the recipient banks stamp etc. j. Documents of Sales Tax Registration of various parties under the B.S.T. and/cr C.S.T. including verification report of the Sales Tax inspector, parties affid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ated the purchase price. Not only this but it has also saved the sales-tax and Octroi etc. on these purchases. Therefore, appellant was asked vide order sheet entry dated 27/4/2010 to explain as to why not decision of Ahmedabad ITAT 5998/Ahd/1994 - 55 TTJ (Ahd) 76 : 58 lTD 428 should be applied and 25% of the purchases should not be disallowed keeping in view the facts of this case which are similar to the case of Vijay Proteins. In response to this query, the Authorized Representative has argued that no addition should be made in view of the decisions relied by him. 7. I have carefully considered the findings of the Assessing Officer and the directions of Hon'ble ITAT. The appellant has furnished full quantitative details and details of sales and payments were made by cheques. So no addition of full purchase is justified. However, the four parties in question were not found at the time of filed enquiries and they were not produced before Assessing Officer in assessment proceedings. Not only this, in appellate proceedings also further opportunity was offered to the appellant and it was required to produce four parties in question before the undersigned. However, the appellant ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd credited in party's account from whom purchases had been made. Beyond this, it cannot be held that the onus which was cast upon the assessee has not been discharged for proving the genuineness of the purchases. He further submitted that once the sales have been accepted along with the trading result, the purchases cannot be disputed by the Assessing Officer. He thus, submitted that the entire purchases disallowed by the Assessing Officer should be deleted. 10. We have carefully considered the rival contentions, perused the findings of the Assessing Officer and the learned Commissioner (Appeals) and the material placed on record. In the present case, the dispute relates to purchases made from the following four parties. S.no. Name of Parties Amount in Rs. 1. M/s. Poonam Enterprises 15,29,265 2. M/s. Montex Enterprises 23,78,600 3. M/s. Veera Mercantile P. Ltd. 14,59,012 4. M/s. Raj Corporation 29,17,620 Total 82,84,497 11. In the first round of assessment proceedings, due to non-verification of the identity of the parties, the purchases were disallowed by the Assessing Officer. Before the Commissioner (Appeals), various add....
X X X X Extracts X X X X
X X X X Extracts X X X X
....corresponding sales. Once the gross profit which is the balancing figure of the opening stock, purchases and direct cost on the debit side and sales and closing stock on the credit side, has been accepted by the Assessing Officer, then it would be farfetched to perceive that such a huge quantity of purchases have not been made. Further, these evidences with regard to the purchases were there with the Assessing Officer in the second round of proceedings, he could have at least made some efforts to verify as to whether these purchases have actually been routed through banking channel i.e., were made through account payee cheques or not or whether the sales tax certificates in the name of these four parties are genuine or not, even though the assessee had failed to put up any appearance before him. The primary onus which laid upon the Assessee was discharged. It was upon the Assessing Officer to prove that these documents are not genuine.Once these documents have not been adversely commented, it cannot be held that the entire purchases with these parties are bogus. Thus, from the facts and circumstances of the case and also in view of the various evidences, as discussed above, we part....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(Appeals) that the assessee had filed income tax records of all the four parties and the payments were made through account payee cheques. These details were furnished before the Assessing Officer also. The Commissioner (Appeals) has duly noted the nature of services rendered by each and every party which has been discussed from Pages-10 to 13 of the impugned appellate order. These details include the nature of services, rate of commission and the work carried out by him in relation to the various purchases. After appreciating all these evidences, the Commissioner (Appeals) deleted the said disallowance on the basis of an Affidavit of these persons, photocopy of cheques, income tax records and nature of services rendered. 17. Before us, the learned Departmental Representative reiterated the same arguments that these details have not been examined by the Assessing Officer, as the assessee has failed to put up any appearance. 18. The learned Counsel for the assessee submitted that all these evidences and documents with regard to the genuineness of the purchases were filed before the Assessing Officer as well as before the Commissioner (Appeals). He strongly relied upon the find....