TaxTMI 
TaxTMI 
2018 (11) TMI 1655
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....dence as required as per Rule 46A. On the fact and in the circumstances of the case and in law, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer to the extent mentioned above since the assessee has failed to disclose his true income/book profit. The appellant prays that the order of Ld.CIT(A) on the above grounds be setaside and that of the Assessing Officer be restored to the above extent. The appellant craves, to leave, to amend or alter any ground or add any new ground which may be necessary." 3. The interconnected issue raised by the Revenue is that ld. CIT(A) erred in deleting the addition made by the AO for Rs. 66,76,417/- on account of bogus purchases vis-à-vis on the basis of additional evidences admitted in contravention to the provisions of Rule 46A. 4. Briefly stated facts are that the assessee is an individual and engaged in the business of trading in ferrous and non ferrous metal under the name and style of his proprietary concern M/s. Shifco Steel Industries. The assessee during the year has made purchases from certain parties as detailed below: Sr.No. Name of the party Amount 1. M/s. Nandkishore Sales Agency Pvt. Ltd. ....
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.... The assessee before CIT(A) also filed the Form 'C' of certain parties to prove the genuineness of the transaction. The assessee in support of his claim also relied on the judgments as detailed under : 1. Hon'ble Jurisdictional High Court in the case of CIT vs. Sathyanaryan P. Rathi reported in 351 ITR 150. 2. Hon'ble Gujarat High Court in the case of CIT vs. M.K. Bros reported in 163 ITR 249. 5.3 The ld CIT(A) after considering the submission deleted the addition by observing as under: "4. The first and second ground of appeal is against the additions of Rs. 66,76,237/- by considering purchases made by the appellant as bogus purchases. The submission made by the appellant has been considered with reference to the facts mentioned in the assessment order. The AO made the additions on the basis of report from the Sales Tax Department, Mumbai, that the parties from whom purchases have been shown are not the genuine sellers of the goods, as claimed by the appellant. Sales Tax Department, Mumbai, conducted search upon these persons and recorded their statements. In the statements, these persons admitted that they issued mere bills and there was no actual sales. The AO further....
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....r hand, ld. AR before us filed a paper book running from page 1-220 and reiterated the submissions as made before the ld. CIT(A). 8. We have heard the rival contentions and perused the materials available on record. In the instant case, the purchases claimed by the assessee were not admitted by the AO on the ground that the notices issued u/s 133(6) of the Act remained un-served. Besides, the AO also observed that there was a search by the VAT Department of Mumbai in respect of the parties as discussed above, wherein it was admitted by the parties that they were engaged in providing accommodation entries to the parties. In this regard, we note that there was no material available with the Revenue other than the statement of the parties as discussed above evidencing that the assessee has made bogus purchases from the aforesaid parties. 8.1 There was also no whisper and iota of evidence that the payment made in connection with the bogus purchases has come back to the assessee. 8.2 There was also no allegation that the assessee has made purchases and sales outside the books of accounts. 8.3 We also note that in similar facts and circumstances various courts have deleted the ad....
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....r the purchase, the said third party does not appear before the Assessing Officer pursuant to the notice or even has stopped the business, the claim of the assessee on that account cannot be discarded as nonexistent. In the case before us, the Revenue has not put forward any other ground, such as, it was not a genuine transaction for other reasons but has simply rejected the claim on the ground as if there was no such transaction. 10. The transaction having taken place through payment by account payee cheques, such plea is not tenable and in such circumstances, the Tribunal below erred in law in reversing the finding arrived at by the Commissioner of Income-tax (Appeals) accepting the said transaction as a genuine transaction. 11. We, therefore, set aside the order of the Tribunal below only in respect of the deletion of the amount of Rs. 3,12,302 paid to M/s. Selvas Photographics by account payee cheques and direct the Assessing Officer to deduct the said amount as business expenditure of the appellant". iii. The Hon'ble Bombay High Court in the case of CIT vs. Nikunj Eximp Enterprises Pvt. Ltd. reported in 372 ITR 619 wherein it was held as under: "7. We have co....