TaxTMI 
TaxTMI 
2024 (8) TMI 274
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.... year 2016-17. 2. In its appeal, the Revenue has raised the following grounds: - 1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the appeal of the assessee by deleting the addition of Rs. 29,98,22,000/-, without appreciating the fact that the assessee failed to prove the genuineness and creditworthiness of the purchases from M/s. Kasturi Commodities Pvt. Ltd by not providing the requisite supporting documents/details during the assessment proceedings." 3. The only dispute raised by the revenue, in the present appeal, pertains to the deletion of addition made on account of bogus purchases made by the assessee. 4. The brief facts of the case, as emanating from records....
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....section 144B of the Act did not agree with the submission of the assessee and held that the assessee has failed to file documentary evidence that it had a business transaction with M/s. Kasturi Commodities Pvt. Ltd. The AO further held that M/s. Kasturi Commodities Pvt. Ltd does not have any actual business or financial creditworthiness and is merely an accommodation entry provider. Accordingly, the AO concluded that the assessee had made a sham transaction, by taking bogus accommodation entries for purchases from M/s. Kasturi Commodities Pvt. Ltd amounting to Rs. 29,98,22,000/- to inflate the cost to reduce the profit for the year under consideration. 5. The learned CIT(A), vide impugned order, allowed the appeal filed by the assessee a....
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....igation Wing, pursuant to the search conducted in the case of M/s. Kasturi Commodities Pvt. Ltd, that the assessee has received funds from M/s. Kasturi Commodities Pvt. Ltd which is not engaged in genuine business activities, proceeding u/s 147 of the Act were initiated in the case of the assessee. From the perusal of the orders passed by the lower authorities, it is evident that as per the information received, M/s. Kasturi Commodities Pvt. Ltd is a corporate entity engaged in shipbreaking activity at Alang, Gujarat as well as trading in Iron and Steel material/scrap at Darukhana, Mumbai. As per the assessee, it has not received any amount from M/s. Kasturi Commodities Pvt. Ltd and rather it made the payment for purchases from M/s. Kasturi....
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....at M/s. Kasturi Commodities Pvt. Ltd declared a total income of Rs. 2,11,51,530/-. Thus, we find no merits in the finding of the AO that M/s. Kasturi Commodities Pvt. Ltd has no financial creditworthiness. 9. From the audited financial statement of the assessee for the assessment year 2016-17, we find that the assessee made total purchases of Rs. 69,64,16,782/- during the year under consideration. Further, the assessee has earned a total turnover of Rs. 74.82 cr from its operations. It is evident from the record that the Revenue has not disputed the sales made by the assessee and only considered the part purchase, i.e. from M/s. Kasturi Commodities Pvt. Ltd., as bogus. We further find that the inventory of the assessee were Rs. 99,16,139....