TaxTMI 
TaxTMI 
2025 (1) TMI 1164
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.... G/H produced by the assessee during the remand proceedings. 3. Brief facts of the case are that assessee is engaged in the business of cloth merchant as a proprietor in the name and style of M/s. Suresh Synthetics. He filed his return on 29.09.2012 reporting total income at Rs. 35,95,489/. Assessment was completed by making the aforesaid two additions mentioned in the grounds raised by the assessee for which ld. AO also rejected the books of account u/s. 145(3). 3.1. In respect of the first ground, ld. AO had noted that assessee had claimed purchases for which amounts remained outstanding during the year. In order to verify genuineness of purchase transaction, notices u/s.133(6) were issued to 17 parties from whom assessee had made purchases. Out of these, notices pertaining to 10 parties were returned back for which the value of purchases totalled to Rs. 3,71,36,606/-. List of these 10 parties is as under: Sr. No Name Purchase Outstanding 1. Vista Trading Co 38,36020 38,36,020 2. United Enterprise 72,44,800 72,44,800 3. M/s Swastik Textile 18,41,424 18,41,424 4. Shamuk Trading P. Ltd. 22,86,875 22,86,875 5. M....
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.... and Invoice wise details for purchases effected and corresponding sale for purchases alleged as Non-Genuine. 89 105 4 Quantitative Details of Stock inward and Stock Outward for Whole Year i.e.A.Y.2012-13 106 137 5 Documents i.e. Invoices(Purchase), Invoices(Sales), Reflecting Quantity and Particulars of Goods, along with proof of Exports, Bankers Realization Certificate For The Amount of Purchases disallowed to the tune of Rs.3,71,36,606/- by A.O BOX FILE SEPARATELY ENCLOSED 6(i) Documents in respect of Interest paid on Loans for Disallowance made u/s-40(a)(ia) :- Copies of Form-15G/15H 138 178 6(ii) Statement of Interest paid on Loans for Disallowance made u/s-40(a)(ia). 179 182 6) Loan Confirmations along with copy of Acknowledgment For Income Tax Return Filed by lenders of Loans in respect of Interest paid on Loans for Disallowance made u/s-40(a)(ia) 183 233 3.4. Assessee also made a detailed written submission in the first appellate proceedings which are reproduced by the ld. CIT(A). In the paper book furnished by the assessee, ld. CIT(A) observed that he has filed additional evidences and thus a remand repor....
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....tails asked for, non-production of purchasers, so as to conclusively prove the genuineness of the purchases made. In respect of the second issue relating to disallowance u/s. 40(a)(ia), he sustained the same in absence of production of any documentary evidences. Thus, the appeal was dismissed. Aggrieved, assessee is in appeal before the Tribunal. 5. Before us, ld. Counsel for the assessee asserted that assessee is a 100% exporter and all of its sales are subjected to scrutiny by the customs authority when goods cross the boundaries of the country. According to him, movement of goods are under bill of entry along with export invoice, packing list, delivery challan and shipping bills. He also referred to mapping of bill to bill purchase with the export sales made by the assessee as well as bill to bill stock of input and output from all the suppliers reconciling them with opening and closing stock. Statement for this mapping for each of the suppliers is placed in the paper book at page No. 28 to 41, wherein item to item purchased is mapped with the export sales done by the assessee. Ld. Counsel also referred on a sample basis to the other corresponding documentary evidences which ....
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.... position, the Tribunal was correct in coming to the conclusion that the purchases cannot be rejected without disturbing the sales in case of a trader. The Tribunal, therefore, correctly restricted the additions limited to the extent of bringing the G.P. rate on purchases at the same rate of other genuine purchases." 6. In the present case, since assessee has placed on record all the corroborative documentary evidences which remain uncontroverted and no discrepancy has been found from the said material as well as no defects have been pointed out. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of CIT Vs. Odeon Builders Pvt. Ltd. (2019) 110 taxmann.com 64 (SC), wherein it was held that, where assessee had submitted purchase bills, transportation bills, confirmed copy of accounts and VAT registration of sellers as also their income tax return and payment was made through cheques, impugned purchases cannot be disallowed. According to the ld. Counsel in the present case, there are no VAT implications in the year under consideration since VAT was not applicable on textile. 6.1. On the first issue, we have considered the submissions made before us and p....