TaxTMI 
TaxTMI 
2022 (1) TMI 1255
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.... of the case, the Hon'ble CIT(A) has erred in law and in facts of the case confirming the addition of Rs.24,252 being 0.55% of closing creditors and debtors as bogus. 2.0 Ground No. 2: Reassessment proceedings not based on any new material facts On the facts and in the circumstances of the case, the Hon'ble CIT(A) has erred in law and in facts of the case failed to appreciate that reassessment proceedings were not based on any new material facts and conditions required for reassessment proceedings were not fulfilled. 3.0 Ground No.3: Appellant has discharged the burden & proved qenuiness. Revenue has not given any evidence to discharge the burden On the facts and in the circumstances of the case, the Hon'ble CIT(A) has e....
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.... case failed to appreciate that the creditors & debtors cannot be bogus when purchases & sales have been accepted as genuine in the assessment order passed under section 143(3) r.w.s. 147 of the Act. 4. In the present case, the AO made disallowances by observing as under:- On perusal of the Balance sheet of the assessee, the assessee has shown sundry creditors of Rs.44,09,531/- and debtors of zero respectively. During the course of assessment proceedings the AR of the assessee was asked to justify the huge creditors. IN response to the same, the assessee submitted that the creditors are year end creditors and are settled in the subsequent years through account payee cheques. I have gone through the explanation along with the ledger sub....
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....ssee and the seller that payment shall be made by him upon receipt of consideration from its customers. This is evidenced from the bank statement wherein lit can observed that the purchase payment/debit in bank is immediately upon the credit of the sale consideration /RTGS." The assessee did not make any efforts to prove the genuineness of high value transactions in the bank account. Neither has controverter the findings recorded by Investigation Wing of the Department. After considering the submissions and perusing the material available on record I hold that the transaction pattern in the account of Axis Bank of M/s Supriyam Diamond shows a rotational pattern of high value transfer within a specific group of entities viz, Marquise Diamo....
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....and have achieved a huge turnover of Rs.31.88 crores. The assessee has also shown the purchase to the tune of Rs.31.71 crores. It is the submission of the assessee before the AO as well as before the undersigned that the assessee always purchases goods on credit when there is a customer to buy and the payment is made immediately after the assessee receives the sale consideration from its customers. Thus it was submitted that there is mutual understanding between the assessee and the seller that payments shall be made by him upon receipt of consideration from its customers. It was clearly seen that the purchasers/ creditors were pertaining not only to March but were throughout the year, which clearly shows that the assessee was not doing g....