2023 (3) TMI 923

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....ved upon the assessee. In response to these notices Authorised Representative of the assessee attended the assessment proceedings from time to time and filed the necessary details as asked for. The Ld. Assessing Officer ("AO") completed the assessment under section 143(3) of the Income Tax Act, 1961 ("the Act") vide order dated 23.12.2016 after making addition of Rs. 9,54,37,240/- on account of bogus purchase/expenses. During the assessment proceedings the Ld. AO noticed that the assessee in its P&L account has shown purchase of Rs. 121,26,32,114/- and has shown expenses of Rs. 6,15,01,432/- on account of freight and forwarding expenses. The assessee was asked to furnish party-wise details of purchases and expenses which were duly furnished by the assessee vide its letter dated 21.10.2016. The Ld. AO issued notice under section 133(6) dated 24.10.2016 to 14 parties in order to verify the genuineness of these transactions. Out of the 14 parties the Ld. AO received reply in respect of 11 parties and 3 parties namely M/s. Ruchi Soya Industries Ltd., M/s. Mahesh Edible Oil Industries Ltd. and M/s. Amit Transport Co. did not reply. The Ld. AO brought this fact to the notice of the asses....

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.... its contention, appellant has filed invoice wise details of freight, supply of material and its export, copy of ledger account and alongwith reference of bank statement. It is submitted by the appellant that transactions with these parties were made in immediate previous year for which assessment u/s 143(3) has been made at returned Income. The appellant has filed the confirmation ledger account of M/s Ruchi, Soya industries Ltd. and Mahesh Edible Oil Industries Ltd. Since appellant has filed the confirmation of these parties during the appellate proceedings, hence remand report as per Rule 46A is called for from the AO. In the report, AO has objected in admitting additional evidences. In the rejoinder appellant has submitted that appellant is a trader exporter where goods purchased are exported out of India, goods have been purchased and AO has not raised any objection on a single voucher. Goods purchased have been exported out of India and payments have been made against goods purchased through banking channel. Goods purchased are part of stock register and accounts of the appellant are duly audited reflecting quantitative details of stock. Payments against sales made have been ....

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....hority had accepted the claim of the assessee that it had conducted its business as commission agent. The traders who appeared before the assessing authority to give evidence had supported the claim of the assessee. The assessee could not be held responsible for the non-appearance of the five traders who were outside the State and from their non- appearance no adverse inference could be drawn by the authorities against the assessee. The assessment of the assessee as a trader in respect of the transactions was not tenable or justified." 5.6 In the case of CIT Vs Sunrise Tooling Systems Pvt. Ltd. 361 ITR 206 (Del) Hon'ble Delhi High Court hold that "in any case when sales declared by the assessee have not been doubted, it was not proper on the part of the Assessing Officer to deny the claimed purchases on the basis of which sales were made. In such circumstances, the only option if any was available with the Department was to estimate the income of the assessee during the year on the basis of trading result of earlier three years, made available at page 38 of the paper book filed on behalf of the assessee. The same has been reproduced hereinabove in the preceding paragraph. On....

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....has furnished confirmed copy of account in respect of purchase parties and payments were made to them through banking channel, addition made by the AO only on account of not receiving information u/s 133(6), thereon treating them bogus purchases is not sustainable. Similarly appellant has made all the payments to the transporter through banking channel and AO has not brought any adverse finding on record that no transactions of sale and purchase undertaken during the year under consideration or payments were made in cash. Accounts of the appellant are audited and it has shown better GP during the year under consideration. Taking into account all these facts, addition made by the AO at Rs. 9,54,37,240/- is not sustainable and it is hereby deleted." 5. Dissatisfied, the Revenue is in appeal before the Tribunal. 6. The Ld. AR relied on the order of the Ld. CIT(A) and reiterated the submissions made before the Ld. CIT(A) in support of the assessee's case. On the contrary, the Ld. DR relied upon the order of the Ld. AO. 7. We have heard the Ld. Representative of the parties and perused the material available on record. After considering the finding of the Ld. AO and the submission a....