TaxTMI 
TaxTMI 
2018 (5) TMI 1319
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng the same to the AO. The issue raised in the cross objection filed by the assessee is against the confirmation of Rs. 66,09,022/- by Ld. CIT(A) as made by the AO on account of disallowance made by the AO under section 69C of the Act. 3. We shall adjudicate the issue raised by the Revenue as well as the issue raised by the assessee in CO in the following paras. 4. The facts in brief are that AO during the assessment proceedings noticed that assessee has made total turnover of Rs. 17.23 crore against which a GP of 0.64 crore was shown which works out to be 3.75% of the total sales. Thus the AO in order to verify the purchases from various parties issued notice under section 133(6) of the Act to 13 parties which are narrated in para 3.1 of the assessment order. Out of the said parties six parties from whom the alleged purchases of Rs. 1,14,16,135/- was made could not be confirmed the details whereof are as under:- S. N. Name of Supplier Amount 1 Durabuild Tech 42,72,424/- 2 Jas Ceramics 20,70,543/- 3 Lucky Trading 18,55,789/- 4 Navkar Wood 12,55,044/- 5 Rajdeep Impex 13,36,756/- 6 Payees Impex 6,25,579/- Total Purchase debited 1,14,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uring the course of remand proceedings, have obtained the bank statements of the above said five parties. It is in the common know/edge of everybody that the bank account, now a days, could be opened only on submission of proper documents. Further the assessee has furnished the Sales tax documents of the above said five parties and also their income tax details to prove their existence. Thus, it is seen that the assessee has furnished many documents to prove the existence of the parties and they have not been controverted by the assessing officer. 8. Be that as it may, another important factor the bank account copies collected by the assessing officer shows that the assessee had made the payments to the above said parties by way of account payee cheques. Thus, it is seen that the transactions have been routed through the bank accounts. Further, it is not the case of the assessing officer that the assessee has indulged in accounting of bogus purchases. When the assessee submitted that he could not have effected the sales without making corresponding purchases, the A 0 has taken the view that the assessee could have effected purchases in the grey market, which conclusion is, in fa....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... We find merit in the argument of the learned counsel for the assessee that for 133(6) compliance it had no control over third parties. In our view, once the AO issued summons u/s 133(6), as held by Hon'ble Supreme Court in the case of CIT v. Orissa Corporation (P) Ltd. (supra), it is his duty to ensure that the progress of issue of summons is brought to a logical conclusion b1v enforcing summons. The enforcement can be achieved in many ways including taking action on un-complied summoned persons, by appointing commission on, the income-tax authorities having jurisdiction over them and getting the verification from their returns or accounts. In these cases neither AO nor CIT(A) adopted this course as laid down by law. ........... The assessee's purchase transactions with these parties is repeated one or other in these years and the actual credit purchases therefrom have been accepted either by the AO or CIT(A) on one ground or the other. It is not the case of A0 that the purchases were bogus or the purchases are not effected. This is evident from the fact that all the purchases of the assessee, stock register, yield, sales, sundry debtors remain accepted in all these year....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the same could not be deleted without confronting the same to the AO. The Ld. D.R. finally prayed that the order of AO be restored by setting aside the order of first appellate authority on this issue. 7. During the course of appellate proceedings, the Ld. A.R. submitted that the Ld. CIT(A) directed the assessee to file the confirmations of these parties and accordingly these are filed before the first appellate authority as well as before the AO. The ld AR contended that it is only after the Ld. CIT(A) found that there was no discrepancy as per the books of accounts of the assessee and the confirmations received from the said parties, the Ld. CIT(A) directed the AO to delete the addition. 8. The argument of the Ld. DR. is that the AO has not been confronted the evidences filed before the Ld. CIT(A) in the form of confirmations and copies of accounts was totally wrong and against the facts of the case as the assessee has filed all these evidences before the AO also. In view of the said facts, the Ld. A.R. prayed before the Bench that Ld. CIT(A) has taken a legal and correct view of the matter after calling for examining the confirmations and copies of accounts of the six parties....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as recorded a finding of fact that the assessee has proved the identity of the suppliers as notices under section 133(6) were issued nonetheless not replied. The ld CIT(A) has noted that the AO has not doubted the transactions at all. The fact is that the party has failed to reply the notices issued under section 133(6) of the Act can not be sole basis for disallowance of purchases from these parties. The details of these parties are again extracted below for the purpose of convenience:- S.N. Name of Supplier Amount 1 Durabuild Tech 42,72,424/- 2 Jas Ceramics 20,70,543/- 3 Lucky Trading 18,55,789/- 4 Navkar Wood 12,55,044/- 5 Rajdeep Impex 13,36,756/- 6 Payees Impex 6,25,579/- Total Purchase debited 1,14,16,135 11. In respect of parties at sr. 1 to 4, the suppliers/creditors did not respond to the notices in spite of the notices being served whereas in respect of parties at Sl. No.5 & 6, the notices were not served at all . So we are in agreement with the reasoning of the first appellate authority that no addition can be made on the ground that notices issued u/s 133(6) of the Act were not replied. Under these facts and circumstances, we are of the....