TaxTMI 
TaxTMI 
2015 (12) TMI 758
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.... as unexplained investment. 2. The facts relating to the above said issue are that the AO, during the course of assessment proceeding, issued notice u/s 133(6) of the Act to one of the suppliers named M/s Chirag Corporation, in order to verify the genuineness of purchases made from it. However, a person named Geeta Jaykant Mehta claimed to be the proprietor of M/s Chirag Corporation replied that the business of M/s Chirag Corporation was closed in March, 2006 itself and further confirmed that she did not carry on any business with the assessee. In support of the letter, a copy of sales tax registration cancellation order was also filed by Geeta Jaykant Mehta. The assessee claimed that the payments against purchases were made by way of Ac....
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....) Since the amount due to M/s Chirag Corporation was shown as outstanding as at the year end, the assessee would have purchased goods from third parties by making payments. Hence the payments so made would amount to unexplained investment. (c) The assessee had produced stock register before the Ld CIT(A). However, the Ld CIT(A) held that, since the purchases made from M/s Chirag Corporation was found to be bogus, it is the responsibility of the assessee to show as to from whom the goods were purchased. (d) Since the assessee had claimed to have purchased goods worth Rs. 95,19,775/- from M/s Chirag Corporation, the Ld CIT(A) enhanced the addition to the above said amount and held that the same is assessable as unexplained i....
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....nd hence the Ld CIT(A) has confirmed the addition made by the AO as unexplained investment. 6. We have heard rival contentions and perused the record. The contention of the assessee is that he has purchased goods through a person named Shri Chirag Vora, who claimed to be representative of M/s Chirag Corporation. The AO has also noticed that the purchase bills have been signed by Mr. Chirag Vora only. However, the undisputed fact remains that the concern M/s Chirag Corporation has closed its business in 2006 itself and the same has also been confirmed by its proprietor with supporting evidences. Before the AO, the assessee has contended that the payments have been made by account payee cheques. However, the said claim has been established....
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....rove the purchases. In the instant case, the initial explanations furnished by the assessee have been proved to be wrong. Subsequently, the assessee could have produced Shri Chirag Vora, who had supplied goods to the assessee, to prove the claim of purchases. Similarly, the assessee could not offer proper explanations with regard to the payments made against the purchases. The assessee also could not offer proper explanations as to why the amount due against purchases was shown as outstanding as at the year end. We notice that the assessee had purchased the goods in the months of May and June, 2008. However, the payments have been made from September, 2009 onwards, i.e., after expiry of about one and half years. It is also not shown that th....