TaxTMI 
TaxTMI 
2019 (2) TMI 112
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....u s/o Kalava Rs.18,90,000/- 5. Irfan Qureshi Rs. 26,25,000/- 6. Aijaj Ahmad Rs.18,90,000/- 7. Shahin Rs.18,90,000/- 8. Mohd. Mansoor Rs.18,90,000/- 9. Mohd. Nazim Rs.18,20,000/- 10. Mohd. Yasin Rs.14,27,744/- 11. Mohd. Sazid Rs.1,04,79,000/- 12. Mohd. Rais Rs.1,78,64,000/- 13. Mohd. Deedar Rs.18,48,000/- 14. Sufiyan Rs.14,85,000/- 15. Valil Urf Vakiluddin Rs.12,23,250/- Total Rs.5,20,15,994/-" 3. The Assessing Officer observed that the assessee filed affidavit of the above 15 parties. The Assessing Officer observed that 6 parties to whom summons issued u/s. 131 of the Act were served upon, but they did not appear before him for recording their statements, they are as under. "(i) Mohd Nazim s/o Mohd. Kasim ID Given 1820000/- (ii) Babu Ji s/o Sh. Mohd. Saddique No Id 1904000/- (iii) Irfan Quereshi s/o Sh. Saeed Quereshi No Id 2625000/- (iv) Mohd Ashraf s/o shri Abdul Majid ID given 1890000/- (v) Chand s/o Sh. Aizaz Ahmad ID given 1890000/- (vi) Raju s/o Sh. Kalwa 189000....
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....re cannot be any sale. The assessee has made payment to parties in cash instalments of Rs. 20,000/- and recorded the same in his books of account. All the parties have confirmed the same. As they might have faced such type of atmosphere first time, and therefore, felt pressure and by mistake gave misstatements. They have given an affidavit which is a proof of genuineness of transactions. None of the parties are bogus. It was further submitted that the assessee has taken CC limit from Punjab national Bank E.K Road, Meerut in financial year 2012-13. Bank official has certified that they visited on monthly basis to check the stock and book debts and creditors reports and no material difference was noticed by them at that time and till date there is no inspection irregularity of branch outstanding regarding the assessee's account. 3.4 The Assessing Officer observed that the reply of the assessee is not acceptable as the same is without any substance. Mere submission of affidavit could not prove genuineness of transaction. Even in business of procuring cattle from farmers, no one gave cattle to buyers on credit basis. It is not possible for above parties to procure cattle on consecut....
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.... parties whose affidavit was filed before him, he denied for the same and replied that all these parties are known by the accountant only which clearly shows uncertainty on the part of the assessee too, therefore, he held that the affidavits filed by the assessee cannot be relied upon and are forged one, and therefore, the purchases checked and examined were found bogus and added Rs. 5,20,15,994/- to the income of the assessee as bogus purchases. 4. On appeal, ld. CIT(A) rejected the appeal of the assessee. He observed that the principal argument of the Authorised Representative of the assessee was that without purchases there could be no export sale which has not been questioned by the Assessing Officer. He observed that the Assessing Officer has not disallowed the entire purchases. The total purchases were Rs. 45.19 crores and Assessing Officer has disallowed only Rs. 5.20 crore worth of purchases after verification from 16 parties. 4.1 He further observed that another argument of the Authorised Representative was that as a measure of practice in trade, which has all long been accepted by the Department also, the persons from whom the assessee purchases are generally petty ....
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....selling in kilograms no stock register has been maintained. The persons from whom purchases whose value is in lacs and crores have been made and these persons do not have any proper sale bill to offer as evidence. Accordingly filing their ledger accounts in the books of account of assessee or in some cases affidavit or certain credentials like PAN does not rescue the assessee's case as there is no independent reliable evidence that could substantiate the purchase transactions from each of the parties. He observed that the only evidence which the Authorised Representative claimed to be reliable is a dharam kanta receipt. He observed that if dharam kanta receipt was reliable evidence then why is it that a person purchasing and selling raw meat could not maintain the stock register. In this case, quantity purchased is raw meat and the same is sold as such. So, when there is no value addition in the product and the purchase and sale in kilograms, in such circumstances, it is very easy to maintain quantitative stock tally or a stock register. Had assessee maintained proper stock register or quantitative stock tally and had he been able to relate the stock values with the dharm kanta rec....
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....131 of the Act to 15 persons from whom the assessee claimed to have made purchases of meat. Out of 15 notices, 3 notices returned unserved and out of balance 12 notices only one noticee responded. In response to that notice Sh. Raju S/o Sh. Kalwa appeared and in his statement he denied making of any sale to the assessee. The payments to all these parties were made in cash. From this, the Assessing Officer inferred that aggregate purchase of Rs. 5,20,15,994/- made from these 15 parties were bogus and he, therefore, added the same to the income of the assessee. 6. On appeal, the CIT(A) confirmed the action of the Assessing Officer. 7. Before us, the AR of the assessee explained that the assessee for its export of meat was required to purchase raw meat. Mostly, the suppliers of raw meat are illiterate and small persons. They purchase useless live stock from farmers and get the same butchered and thereafter supplied the same to the assessee. Out of the fear of Income Tax Department, they may not have responded to the notice of the Income Tax Department. 8. He, further, submitted that for disallowance of Rs. 5,20,15,994/-, the income of the assessee was assessed at Rs. 5,30,73,....