ITO 32(1)(4), MUMBAI v. DARSHAN GAUTAM SALOT, MUMBAI

ITA 3765/MUM/2016 | 2009-2010
Pronouncement Date: 28-11-2017 | Result: Allowed

Appeal Details

RSA Number 376519914 RSA 2016
Assessee PAN BMOPS4552G
Bench Mumbai
Appeal Number ITA 3765/MUM/2016
Duration Of Justice 1 year(s) 5 month(s) 27 day(s)
Appellant ITO 32(1)(4), MUMBAI
Respondent DARSHAN GAUTAM SALOT, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2017
Appeal Filed By Department
Tags No record found
Order Result Allowed
Bench Allotted Not Allotted
Tribunal Order Date 28-11-2017
Assessment Year 2009-2010
Appeal Filed On 31-05-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C MUMBAI . BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI G. MANJUNATHA ACCOUNTANT MEMBER ITA NO.3765/MUM/2016 ASSESSMENT YEAR: 2009-10 INCOME TAX OFFICER-32(1)(4) R. NO.202 C-11 2 ND FLOOR PRATYAKSHA KAR BHAVAN BANDRA KURLA COMPLEX BANDRA (EAST) MUMBAI-400051 / VS. SHRI DARSHAN GAUTAM SALOT A-3.4 SONI TOWER RAM NAGAR BORIVALI (EAST) MUMBAI-400092 ( / REVENUE) ( ! ' /ASSESSEE) P.A. NO.BMOPS4552G / REVENUE BY SHRI RAJAT MITTAL -DR ! ' / ASSESSEE BY SHRI M. SUBRAMANIAN # $ % ' & / DAT E OF HEARING : 28/11/2017 % ' & / DATE OF PRONOUNCEMENT 28/11/2017 ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATE D 29/03/2016 OF THE LD. FIRST APPELLATE AUTHORITY MU MBAI RESTRICTING THE ADDITION TO RS.16 44 201/- AT THE R ATE OF 4.14% OF RS.397 15 012/- MADE U/S 69C OF THE INCOME TAX ACT 1961 (HEREINAFTER THE ACT) ON ACCOUNT OF BOGUS PURCHASES WITHOUT APPRECIATING THE FACT THAT THE A SSESSEE DID NOT PRODUCE ANY COGENT EVIDENCE WITH RESPECT TO ACTUAL DELIVERY OF GOODS PURCHASE FROM PARTIES AND THE NOT ICES ISSUED U/S 133(6) TO SUCH PARTIES WERE RETURNED UNS ERVED BY THE POSTAL AUTHORITIES WITH THE REMARK NOT AVAILAB LE AT THIS ADDRESS THUS THE ASSESSEE COULD NOT PRODUCE THE PARTIES FROM WHOM PURCHASE WERE CLAIMED TO BE MADE. 2. DURING HEARING THE LD. DR SHRI RAJAT MITTAL ADVANCED ARGUMENTS WHICH IDENTICAL TO THE GROUND R AISED. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSESSEE SHRI M. SUBRAMANIAN DEFENDED THE IMPUGNED ORDER BY EXPLAIN ING THAT PROPER OPPORTUNITY WAS NOT PROVIDED TO THE ASS ESSEE BY THE ASSESSING OFFICER AND THERE IS A DISCREPANCY IN FIGURES ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 3 ALSO. IT WAS SUBMITTED THAT THE NECESSARY EVIDENCE WAS DULY FILED BEFORE THE LD. ASSESSING OFFICER. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BROADLY THE GRUDGE OF THE REVENUE IS WITH RESPECT TO RESTRICTIN G THE ADDITION TO RS.16 44 201/- AT THE RATE OF 4.14% OF THE TOTAL ADDITION MADE U/S 69C OF THE ACT. IF THE OBSERVATIO N MADE IN THE ASSESSMENT ORDER LEADING TO ADDITION MADE T O THE TOTAL INCOME CONCLUSION DRAWN IN THE IMPUGNED ORDE R MATERIAL AVAILABLE ON RECORD ASSERTIONS MADE BY TH E LD. REPRESENTATIVE FROM BOTH SIDES IF KEPT IN JUXTAPOS ITION AND ANALYZED BEFORE ADVERTING FURTHER THE FACTS OF TH E PRESENT APPEALS BEFORE US WE DEEM IT APPROPRIATE TO CONSID ER VARIOUS DECISIONS FROM HON'BLE HIGH COURTS/HON'BLE APEX COURT SO THAT WE CAN REACH TO A PROPER CONCLUSION. THE HON'BLE GUJARAT HIGH COURT IN SANJAY OILCAKES INDUS TRIES VS CIT (2009) 316 ITR 274 (GUJ.) HELD AS UNDER:- 11. HAVING HEARD THE LEARNED ADVOCATES APPEARING FOR THE RESPECTIVE PARTIES IT IS APPARENT THAT NO INTERFERENCE IS CALLED FOR IN THE IMPUGNED ORDER OF THE TRIBUNAL DATED APRIL 29 1994 READ WITH THE ORDER DATED SEPTEMBER 29 1994 MADE IN MISCELLANEOUS ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 4 APPLICATION. IN THE PRINCIPAL ORDER THE TRIBUNAL HA S RECORDED THE FOLLOWING FINDINGS : '8.3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE FACTS ON RECORD. IN OUR OPINION THE ACTION OF THE COMMISSIONER OF INCOME-TAX (APPEALS) CONFIRMING 25 PER CENT. OF THE AMOUNTS CLAIMED IS FAIR AND REASONABLE AND NO INTERFERENCE IS CALLED FOR. THE COMMIS SIONER OF INCOME-TAX (APPEALS) HAS GONE THROUGH THE PURCHASE PRICES OF THE RAW MATERIAL PREVALENT AT THE TIME AND RIGHTLY CAME TO THE CON CLUSION THAT THE DISALLOWANCE TO THE EXTENT OF 25 PER CENT. WAS CALLED FOR. IT IS ESTABLISHED THAT THE PARTIES WERE NOT TRACEABLE ; THEY OPENED THE BANK ACCOUNTS IN WHICH THE CHEQUES WERE CREDITED BUT SOON THEREAFTER THE AMOUNTS WERE WITHDRAWN BY BEARER CHEQUES. THAT FAIRLY LEADS TO THE CONCLUSION THAT THESE PARTIES WERE PERHAPS CREATION OF THE ASSESSEE ITSELF FOR THE PURPOSE OF BANKING PURCHASES INTO BOOKS OF ACCOUNT BECAUSE THE PURCHASES WITH BILLS WERE NOT FEASIBLE. THUS THE ABOVENOTED PARTIES BECOME CONDUIT PIPES BETWEEN THE ASSESSEE-FIRM AND THE SELLERS OF THE RAW MATERIALS. UNDER THE CIRCUMSTANCES IT WAS NOT IMPOSSIBLE FOR THE ASSESSEE TO INFLATE THE PRICES OF RAW MATERIALS. ACCORDINGLY AN ADDITION AT THE RATE OF 25 PER CENT. FOR EXTRA PRICE PAID BY THE ASSESSEE THAN OVER AND ABOVE THE PREVALENT PRICE IS FAIR AND REASONABLE AND WE ACCORDINGLY CONFIRM THE FINDING OF THE COMMIS SIONER OF INCOME-TAX (APPEALS).' 12. THUS IT IS APPARENT THAT BOTH THE COMMISSIONER (APPEALS) AND THE TRIBUNAL HAVE CONCURRENTLY ACCEPTED THE FINDING OF THE ASSESSING OFFICER THAT THE APPARENT SELLERS WHO HAD ISSUED SALE BILLS WERE NOT TRACEABLE. THAT GOODS WERE RECEIVED FROM THE PARTIES OTHER THAN THE PERSONS WHO HAD ISSUED BILLS FOR SUCH GOODS. THOUGH THE PURCHASES ARE SHOWN TO HAVE ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 5 BEEN MADE BY MAKING PAYMENT THEREOF BY ACCOUNT PAYEE CHEQUES THE CHEQUES HAVE BEEN DEPOSITED IN BANK ACCOUNTS OSTENSIBLY IN THE NAME OF THE APPARENT SELLERS THEREAFTER THE ENTIRE AMOUNTS HAVE BEEN WITHDRAWN BY BEARER CHEQUES AND THERE IS NO TRACE OR IDENTITY OF THE PERSON WITHDRAWING THE AMOUNT FROM THE BANK ACCOUNTS. IN THE LIGHT OF THE AFORESAID NATURE OF EVIDENCE IT IS NOT POSSIBLE TO RECORD A DIFFERENT CONCLUSION DIFFERENT FROM THE ONE RECORDED BY THE COMMISSIONER (APPEALS) AND THE TRIBUNAL CONCURRENTLY HOLDING THAT THE APPARENT SELLERS WERE NOT GENUINE OR WERE ACTING AS CONDUIT BETWEEN THE ASSESSEE-FIRM AND THE ACTUAL SELLERS OF THE RAW MATERIALS. BOTH THE COMMISSIONER (APPEALS) AND THE TRIBUNAL HAVE THEREFORE COME TO THE CONCLUSION THAT IN SUCH CIRCUMSTANCES THE LIKELIHOOD OF THE PURCHASE PRICE BEING INFLATED CANNO T BE RULED OUT AND THERE IS NO MATERIAL TO DISLODGE SUCH FINDING. THE ISSUE IS NOT WHETHER THE PURCHASE PRICE REFLECTED IN THE BOOKS OF ACCOUNT MATCHES THE PURCHASE PRICE STATED TO HAVE BEEN PAID TO OTHER PERSONS. THE ISSUE IS WHETHER THE PURCHASE PRICE PAID BY THE ASSESSEE IS REFLECTED AS RECEIPTS BY THE RECIPIENTS. THE ASSESSEE HAS BY SET OF EVIDENCE AVAILABLE ON RECORD MADE IT POSSIBLE FOR THE RECIPIENTS NOT BEING TRACEABLE FOR THE PURPOSE OF INQUIRY AS TO WHETHER THE PAYMENTS MADE BY THE ASSESSEE HAVE BEEN ACTUALLY RECEIVED BY THE APPARENT SELLERS. HENCE THE ESTIMATE MADE BY THE TWO APPELLATE AUTHORITIES DOES NOT WARRANT INTERFERENCE. EVEN OTHERWISE WHETHER THE ESTIMATE SHOULD BE AT A PARTICULAR SUM OR AT A DIFFERENT SUM CAN NEVER BE AN ISSUE OF LAW. IN THE AFORESAID CASE THE HON'BLE HIGH COURT ACCEP TED THAT THE APPARENT SELLERS WHO ISSUED THE SAID BILL S WERE NOT TRACEABLE AND THE GOODS RECEIVED FROM PARTIES OTHER THAN THE ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 6 PERSONS WHO HAD ISSUED THE BILLS FOR SUCH GOODS. T HE PURCHASES WERE SHOWN TO HAVE BEEN MADE BY MAKING PAYMENTS THROUGH BANKING CHANNEL AND THUS THE APPA RENT SELLERS WERE NOT GENUINE OR WERE ACTING AS CONDUIT BETWEEN THE ASSESSEE AND THE ACTUAL SELLER. IN SUCH A SITUA TION THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL) AS WELL AS BY THE TRIBUNAL WAS AFFIRMED. HON'BLE APEX COURT IN KACHWALA GEMS VS JCIT (2007) 158 TAXM AN 71 OBSERVED THAT AN ELEMENT OF GUESSWORK IS INEVITA BLE IN CASES WHERE ESTIMATION OF INCOME IS WARRANTED. 2.2. THE HON'BLE GUJARAT HIGH COURT IN CIT VS BHOLANATH POLY FAB. PVT. LTD. (2013) 355 ITR 290 (G UJ.) HELD/OBSERVED AS UNDER:- 5. HAVING COME TO SUCH A CONCLUSION HOWEVER THE TRIBUNAL WAS OF THE OPINION THAT THE PURCHASES MAY HAVE BEEN MADE FROM BOGUS PARTIES NEVERTHELESS THE PURCHASES THEMSELVES WERE NOT BOGUS. THE TRIBUNAL ADVERTED TO THE FACTS AND DATA ON RECORD AND CAME TO THE CONCLUSION THAT THE ENTIRE QUANTITY OF OPENING STOCK PURCHASES AND THE QUANTITY MANUFACTURED DURING THE YEAR UNDER CONSIDERATION WERE SOLD BY THE ASSESSEE. THEREFORE THE PURCHASES OF THE ENTIRE 1 02 514 METRES OF CLOTH WERE SOLD DURING THE YEAR UNDER CONSIDERATION. THE TRIBUNAL THEREFORE ACCEPTED THE ASSESSEE'S CONTENTION THAT THE FINISHED GOODS WERE PURCHASED BY THE ASSESSEE ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 7 MAY BE NOT FROM THE PARTIES SHOWN IN THE ACCOUNTS BUT FROM OTHER SOURCES. IN THAT VIEW OF THE MATTER THE TRIBUNAL WAS OF THE OPINION THAT NOT THE ENTIRE AMOUNT BUT THE PROFIT MARGIN EMBEDDED IN SUCH AMOUNT WOULD BE SUBJECTED TO TAX. THE TRIBUNAL RELIED ON ITS EARLIER DECISION IN THE CASE OF SANKE T STEEL TRADERS AND ALSO MADE REFERENCE TO THE TRIBUNAL'S DECISION IN THE CASE OF VIJAY PROTEINS L TD. V. ASST. CIT [1996] 58 ITD 428 (AHD). 6. WE ARE OF THE OPINION THAT THE TRIBUNAL COMMITTE D NO ERROR. WHETHER THE PURCHASES THEMSELVES WERE BOGUS OR WHETHER THE PARTIES FROM WHOM SUCH PURCHASES WERE ALLEGEDLY MADE WERE BOGUS IS ESSENTIALLY A QUESTION OF FACT. THE TRIBUNAL HAVING EXAMINED THE EVIDENCE ON RECORD CAME TO THE CONCLUSION THAT THE ASSESSEE DID PURCHASE THE CLOTH AND SELL THE FINISHED GOODS. IN THAT VIEW OF THE MATTER AS NATURAL COROLLARY NOT THE ENTIRE AMOUNT COVERED UNDER SUCH PURCHASE BUT THE PROFIT ELEMENT EMBEDDED THEREIN WOULD BE SUBJECT TO TAX. THIS WAS THE VIEW OF THIS COURT IN THE CASE OF SANJAY OILCAK E INDUSTRIES V. CIT [2009] 316 ITR 274 (GUJ). SUCH DECISION IS ALSO FOLLOWED BY THIS COURT IN A JUDGME NT DATED AUGUST 16 2011 IN TAX APPEAL NO. 679 OF 2010 IN THE CASE OF CIT V. KISHOR AMRUTLAL PATEL. I N THE RESULT TAX APPEAL IS DISMISSED. 2.3. LIKEWISE THE HON'BLE GUJARAT HIGH COURT IN C IT VS VIJAY M. MISTRY CONSTRUCTION LTD. (2013) 355 ITR 498 (GUJ.) HELD/OBSERVED AS UNDER:- 6. AS IS APPARENT FROM THE FACTS NOTED HEREINABOVE THE COMMISSIONER (APPEALS) AFTER APPRECIATING THE EVIDENCE ON RECORD HAS FOUND THAT THE ASSESSEE HAD IN FACT MADE THE PURCHASES AND HENCE THE ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 8 ASSESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING THE ENTIRE AMOUNT. HE HOWEVER WAS OF THE VIEW THAT THE ASSESSEE HAD INFLATED THE PURCHASES AND ACCORDINGLY BY PLACING RELIANCE ON THE DECISION OF THE TRIBUNAL IN THE CASE OF VIJAY PROTEINS (SUPRA) RESTRICTED THE DISALLOWANCE TO 20 PER CENT. THE TRIBUNAL IN THE IMPUGNED ORDER HAS FOLLOWED ITS EARLIER ORDER IN THE CASE OF VIJAY PROTEINS TO THE LETTER AND ENHANCED THE DISALLOWANCE TO 25 PER CENT. THUS IN BOTH CASES THE DECISION OF THE COMMISSIONER (APPEALS) AS WELL AS THAT OF THE TRIBUNAL IS BASED ON ESTIMATE. THIS HIGH COURT IN THE CASE OF SANJAY OIL CAKE [2009] 316 ITR 274 (GUJ) HAS HELD THAT WHETHER AN ESTIMATE SHOULD BE AT A PARTICULAR SUM OR AT A DIFFERENT SUM CAN NEVER BE A QUESTION OF LAW. 7. THE APEX COURT IN THE CASE OF KACHWALA GEMS [2007] 288 ITR 10 (SC) HAS HELD THAT IN A BEST JUDGMENT ASSESSMENT THERE IS ALWAYS A CERTAIN DEGREE OF GUESS WORK. NO DOUBT THE AUTHORITIES SHOULD TRY TO MAKE AN HONEST AND FAIR ESTIMATE OF THE INCOME EVEN IN A BEST JUDGMENT ASSESSMENT AND SHOULD NOT ACT TOTALLY ARBITRARILY BUT THERE IS NECESSARILY SOME AMOUNT OF GUESS WORK INVOLVED IN A BEST JUDGMENT ASSESSMENT. 8. EXAMINING THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE AFORESAID DECISIONS THE DECISION OF T HE TRIBUNAL BEING BASED ON AN ESTIMATE DOES NOT GIVE RISE TO ANY QUESTION OF LAW SO AS TO WARRANT INTERFERENCE. 9. IN SO FAR AS THE PROPOSED QUESTIONS (C) (D) AND (E) ARE CONCERNED THE SAME ARE SIMILAR TO THE PROPOSED QUESTION (A) WHEREIN THE TRIBUNAL HAS RESTRICTED TH E ADDITION TO 25 PER CENT. ON SIMILAR FACTS. IN THE CIRCUMSTANCES FOR THE REASONS STATED HEREINABOVE THE SAID GROUNDS OF APPEAL DO NOT GIVE RISE TO ANY QUESTION OF LAW. 10. AS REGARDS THE PROPOSED QUESTION (B) WHICH PERTAINS TO THE DELETION OF ADDITION OF RS. 7 88 59 0 ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 9 MADE ON ACCOUNT OF INFLATION OF EXPENSES PAID TO METAL AND MACHINE TRADING CO. (MMTC) THE ASSESSING OFFICER HAS FOUND THAT MMTC WAS A PARTNERSHIP FIRM OF SHRI NITIN GAJJAR ALONG WITH HI S FATHER AND BROTHER OPERATING FROM BHAVNAGAR. A PERUSAL OF THEIR TRANSACTIONS WITH THE ASSESSEE INDICATED THAT THERE IS SOME INFLATION OF EXPENSES AS DETAILED IN PARAGRAPH 6.1 OF THE ASSESSMENT ORDER. AFTER CONSIDERING THE EVIDENCE ON RECORD THE ASSESSING OFFICER DISALLOWED THE AMOUNT RS. 7 88 590 ON ACCOUNT OF PAYMENT MADE TO MMTC. 11. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER (APPEALS) WHO UPON APPRECIATION OF THE EVIDENCE ON RECORD FOUND THAT THE ASSESSING OFFICER HAD NOT REJECTED THE GENUINENESS OF THE PURCHASES MADE FROM MMTC WHILE MAKING THE DISALLOWANCE. HIS OBSERVATIONS WERE BASED ON INFLATION OF RATES WHICH WERE BEING CHARGED FROM TH E ASSESSEE. ACCORDING TO THE COMMISSIONER (APPEALS) THOUGH MMTC IN SOME RESPECT COULD BE ATTRIBUTED TO BE ASSOCIATED WITH THE ASSESSEE-COMPANY STILL IT COULD NOT BE EXPECTED THAT MMTC WAS CARRYING OUT ITS BUSINESS WITHOUT ANY MOTIVE OR PROFIT. ACCORDIN G TO THE COMMISSIONER (APPEALS) IT WAS PROVED BY THE ASSESSEE THAT THE RATES CHARGED BY MMTC WERE COMPARABLE WITH THE PREVAILING MARKET RATES NO SUCH ADDITION CAN STAND. THE COMMISSIONER (APPEALS) TOOK NOTE OF THE FACT THAT IT WAS NOT THE CASE OF THE ASSESSING OFFICER THAT THE PURCHASES HA D BEEN DIRECTLY EFFECTED FROM THIRD PARTIES AND NOT DIRECTLY FROM MMTC ; THE DIFFERENCE COULD NOT BE TH E NET PROFIT IN THE HANDS OF MMTC ; AND THAT WHILE CONDUCTING THE ENTIRE EXERCISE MMTC WOULD HAVE TO INCUR CERTAIN EXPENDITURE IN TRANSPORTATION IN ENGAGING PERSONNEL IN THE OFFICE AND OTHER OPERATIONS AND WAS ACCORDINGLY OF THE VIEW THAT THERE WAS NO CASE OF ACTUAL INFLATION OF RATES AND DELETED THE ADDITION. 12. THE TRIBUNAL IN THE IMPUGNED ORDER HAS CONCURRED WITH THE FINDINGS RECORDED BY THE COMMISSIONER (APPEALS) AND HAS FOUND THAT THE ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 10 ASSESSEE HAD MADE PURCHASES FROM MMTC AT THE PREVAILING MARKET RATES AND THAT MMTC HAD INCURRED CERTAIN EXPENDITURE IN ENGAGING PERSONNEL IN THE OFFICE AND OTHER OPERATIONS AND WOULD MAKE SOME INCOME FROM THE ENTIRE EXERCISE. IN THE CIRCUMSTANCES THE PURCHASES MADE BY THE ASSESSEE FROM MMTC WOULD NOT BE HIT BY THE PROVISIONS OF SECTION 40A(2) OF THE ACT. 13. THUS THE CONCLUSION ARRIVED AT BY THE TRIBUNAL IS BASED ON CONCURRENT FINDINGS OF FACT RECORDED BY THE COMMISSIONER (APPEALS) AS WELL AS THE TRIBUNAL. IT IS NOT THE CASE OF THE REVENUE THAT THE TRIBUNAL HAS TAKEN INTO ACCOUNT ANY IRRELEVANT MATERIAL OR THAT ANY RELEVANT MATERIAL HAS NOT BEEN TAKEN INTO CONSIDERATION. IN THE ABSENCE OF ANY MATERIAL TO TH E CONTRARY BEING POINTED OUT ON BEHALF OF THE REVENUE THE IMPUGNED ORDER BEING BASED ON CONCURRENT FINDINGS OF FACT RECORDED BY THE TRIBUNAL UPON APPRECIATION OF THE EVIDENCE ON RECORD DOES NOT GI VE RISE TO ANY QUESTION OF LAW IN SO FAR AS THE PRESEN T GROUND OF APPEAL IS CONCERNED. 14. IN RELATION TO THE PROPOSED QUESTION (F) WHICH RELATES TO THE DELETION OF ADDITION OF RS. 44 54 42 6 MADE ON ACCOUNT OF PURCHASE OF CRANE AND ALLOWING DEPRECIATION ON THE SAME THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD PURCHASED A CRAWLER CRANE FOR AN AMOUNT OF RS. 24 61 000 EXCLUDING THE COST OF SPARE PARTS OF RS. 14 98 490. THE ASSESSING OFFICER AFTER EXAMINING THE EVIDENCE ON RECORD AND CONSIDERING THE EXPLANATION GIVEN BY THE ASSESSEE MADE ADDITION OF RS. 44 54 426 RS. 39 59 490 BEING THE PURCHASE PRICE OF THE CRANE ALONG WITH ITS SPARE PARTS AND RS. 4 94 936 BEING DEPRECIATION CLAIMED BY THE ASSESSEE. THE COMMISSIONER (APPEALS) UPON APPRECIATION OF EVIDENCE ON RECORD WAS OF THE VIEW THAT THE ASSESSING OFFICER HAS NOT APPRECIATED THE FACTS OF THE CASE PROPERLY AND HAD MADE DISALLOWANCE WHICH WAS NOT PERMITTED BY THE INCOME-TAX ACT. IT WAS HELD THAT DISALLOWANCE COULD ONLY HAVE BEEN MADE IN RESPECT OF EXPENSES DEBITED TO THE PROFIT ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 11 AND LOSS ACCOUNT WHEREAS IN THE PRESENT CASE THE PURCHASE OF CRANE AND SPARE PARTS OF THE CRANE AND OTHER MACHINERIES WERE IN THE NATURE OF ACQUISITION OF CAPITAL ASSET. ACCORDING TO THE COMMISSIONER (APPEALS) THE DISALLOWANCE COULD HAVE BEEN MADE ON DEPRECIATION ONLY IF AT ALL THE ASSESSING OFFICE R CONCLUSIVELY PROVED THAT THE PURCHASES OF CRANE AND OTHER PARTS ARE BOGUS. UPON APPRECIATION OF THE MATERIAL ON RECORD THE COMMISSIONER (APPEALS) FOUND THAT THE ASSESSING OFFICER HAS SIMPLY BRUSHED ASIDE ALL THE EVIDENCE ON ACCOUNT OF TECHNICAL INFIRMITIES AND THAT THE EVIDENCE SUCH AS OCTROI RECEIPT ; HYPOTHECATION OF THE CRANE TO THE BANK; EXISTENCE OF THE CRANE EVEN TILL DATE WITH THE ASSESSEE CONCLUSIVELY PROVED THAT THE CRANE WAS PURCHASED AND IT WAS IN USE EVEN AS ON DATE WITH THE ASSESSEE. THE COMMISSIONER (APPEALS) ACCORDINGLY FOUND THAT THERE WAS NO SCOPE FOR ANY DISALLOWANCE AND ACCORDINGLY DELETED THE DISALLOWANCE MADE ON ACCOUNT OF PURCHASE OF CRANE AND ALLOWED THE DEPRECIATION AS CLAIMED BY THE ASSESSEE. 15. THE TRIBUNAL IN THE IMPUGNED ORDER HAS NOTED THAT THE COST OF CRANE WAS NEVER CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME. BEFORE THE TRIBUNAL THE ASSESSEE PRODUCED THE EVIDENCE THAT THE CRANE IN QUESTION WAS REGISTERED WITH THE RTO AND THE SAME WAS WHOLLY AND EXCLUSIVELY USED FOR THE PURPOSES OF ITS BUSINESS. THE TRIBUNAL THEREFO RE HELD THAT THE COMMISSIONER (APPEALS) WAS LEGALLY AND FACTUALLY CORRECT IN DELETING THE DISALLOWANCE OF COST OF CRANE AS WELL AS DEPRECIATION THEREON. 16. FROM THE FACTS EMERGING FROM THE RECORD IT IS APPARENT THAT THE ASSESSEE HAD NEVER CLAIMED THE COST OF THE CRANE IN THE RETURN NOR HAD IT DEBITED THE EXPENSES TO THE PROFIT AND LOSS ACCOUNT AND AS SUC H THE QUESTION OF DISALLOWING THE SAME AND ADDING THE SAME TO THE INCOME WOULD NOT ARISE. MOREOVER IN TH E ABSENCE OF ANY EVIDENCE TO INDICATE THAT THE PURCHASE WAS BOGUS OR THAT THE CRANE IN FACT DID NO T EXIST THE QUESTION OF DISALLOWING THE DEPRECATION IN ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 12 RESPECT OF THE SAME ALSO WOULD NOT ARISE. WHEN THE ASSESSEE HAD CONCLUSIVELY PROVED THE PURCHASE AND EXISTENCE OF THE CRANE AND HAD NOT DEBITED THE EXPENSES TO THE PROFIT AND LOSS ACCOUNT NO ADDITIO N COULD HAVE BEEN MADE IN RESPECT OF THE PURCHASE PRICE NOR COULD HAVE DEPRECIATION BEEN DISALLOWED I N RESPECT THEREOF. THE TRIBUNAL WAS THEREFORE JUSTIFIED IN DELETING THE ADDITION AS WELL AS DISALLOWANCE OF DEPRECIATION. 17. IN THE LIGHT OF THE AFORESAID DISCUSSION IT IS NOT POSSIBLE TO STATE THAT THERE IS ANY LEGAL INFIRMITY IN THE IMPUGNED ORDER MADE BY THE TRIBUNAL SO AS TO WARRANT INTERFERENCE. IN THE ABSENCE OF ANY QUESTIO N OF LAW MUCH LESS A SUBSTANTIAL QUESTION OF LAW T HE APPEAL IS DISMISSED. 2.4. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS ASHISH INTERNATIONAL LTD. (ITA NO.4299/20 09) ORDER DATED 22/02/2011 OBSERVED/HELD AS UNDER:- THE QUESTION RAISED IN THIS APPEAL IS WHETHER THE TRIBUNAL WAS JUSTIFIED IN DELETING THE ADDITION ON ACCOUNT OF BOGUS PURCHASES ALLEGEDLY MADE BY THE ASSESSEE FROM M/S. THAKKAR AGRO INDUSTRIAL CHEM SUPPLIES P. LTD. ACCORDING TO THE REVENUE THE DIRECTOR OF M/S. THAKKAR AGRO INDUSTRIAL CHEM SUPPLIES P. LTD. IN HIS STATEMENT HAD STATED THAT THERE WERE NO SALES / PURCHASES BUT THE TRANSACTIONS WERE ONLY ACCOMMODATION BILLS NOT INVOLVING ANY TRANSACTIONS. THE TRIBUNAL HAS RECORDED A FINDING OF FACT THAT THE ASSESSEE HAD DISPUTED THE CORRECTNESS OF THE ABOVE STATEMENT AND ADMITTEDLY THE ASSESSEE WAS NOT GIVEN ANY OPPORTUNITY TO CROSS EXAMINE THE CONCERNED DIRECTOR OF M/S. THAKKAR AGRO INDUSTRIAL CHEM SUPPLIES P. LTD. WHO HAD MADE THE ABOVE STATEMENT. THE APPELLATE AUTHORITY HAD SOUGHT REMAND REPORT AND EVEN AT THAT STAGE THE GENUINENESS OF THE STATEMENT HAS NOT BEEN ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 13 ESTABLISHED BY ALLOWING CROSS EXAMINATION OF THE PERSON WHOSE STATEMENT WAS RELIED UPON BY THE REVENUE. IN THESE CIRCUMSTANCES THE DECISION OF THE TRIBUNAL BEING BASED ON THE FACT NO SUBSTANTIAL QUESTION OF LAW CAN BE SAID TO ARISE FROM THE ORDER OF THE TRIBUNAL. THE APPEAL IS DISMISSED WITH NO ORDER AS TO COSTS. 2.5. THE HON'BLE JURISDICTIONAL HIGH COURT IN CIT VS NIKUNJ EXIM ENTERPRISES PVT. LTD. (2015) 372 ITR 61 9 (BOM.) HELD/OBSERVED AS UNDER:- 7. WE HAVE CONSIDERED THE SUBMISSION ON BEHALF OF THE REVENUE. HOWEVER FROM THE ORDER OF THE TRIBUNAL DATED APRIL 30 2010 WE FIND THAT THE TRIBUNAL HAS DELETED THE ADDITIONS ON ACCOUNT OF BOGUS PURCHASES NOT ONLY ON THE BASIS OF STOCK STATEMENT I.E. RECONCILIATION STATEMENT BUT ALSO IN VIEW OF THE OTHER FACTS. THE TRIBUNAL RECORDS THAT THE BOOKS OF ACCOUNT OF THE RESPONDENT-ASSESSEE HAVE NOT BEEN REJECTED. SIMILARLY THE SALES HAVE NOT BE EN DOUBTED AND IT IS AN ADMITTED POSITION THAT SUBSTANTIAL AMOUNT OF SALES HAVE BEEN MADE TO THE GOVERNMENT DEPARTMENT I.E. DEFENCE RESEARCH AND DEVELOPMENT LABORATORY HYDERABAD. FURTHER THERE WERE CONFIRMATION LETTERS FILED BY THE SUPPLIERS COPIES OF INVOICES FOR PURCHASES AS WELL AS COPIES OF BANK STATEMENT ALL OF WHICH WOULD INDICATE THAT THE PURCHASES WERE IN FACT MADE. IN OUR VIEW MERELY BECAUSE THE SUPPLIERS HAVE NOT APPEARED BEFORE THE ASSESSING OFFICER OR THE COMMISSIONER OF INCOME-TAX (APPEALS) ONE CANNOT CONCLUDE THAT THE PURCHASES WERE NOT MADE BY THE RESPONDENT-ASSESSEE. THE ASSESSING OFFICER AS WELL AS THE COMMISSIONER OF INCOME-TAX (APPEALS) HAVE DISALLOWED THE DEDUCTION OF RS. 1.33 CRORES ON ACCOUNT OF PURCHASES MERELY O N THE BASIS OF SUSPICION BECAUSE THE SELLERS AND THE CANVASSING AGENTS HAVE NOT BEEN PRODUCED BEFORE THEM. WE FIND THAT THE ORDER OF THE TRIBUNAL IS WEL L A REASONED ORDER TAKING INTO ACCOUNT ALL THE FACTS ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 14 BEFORE CONCLUDING THAT THE PURCHASES OF RS. 1.33 CRORES WAS NOT BOGUS. NO FAULT CAN BE FOUND WITH TH E ORDER DATED APRIL 30 2010 OF THE TRIBUNAL. 2.6. THE HON'BLE GUJARAT HIGH COURT IN CIT VS M.K. BROTHERS (163 ITR 249) HELD/OBSERVED AS UNDER:- BEING AGGRIEVED BY THE AFORESAID ORDER THE ASSESS EE WENT IN SECOND APPEAL BEFORE THE TRIBUNAL. IT WAS URGED ON BEHALF OF THE ASSESSEE THAT THE TRANSACTIO NS IN QUESTION WERE NORMAL BUSINESS TRANSACTIONS AND THE ASSESSEE HAD MADE PAYMENTS BY CHEQUES. THE PARTIES DID NOT COME FORWARD AND IF THEY DID NOT CO ME THE ASSESSEE SHOULD NOT SUFFER. HOWEVER ON BEHALF OF THE REVENUE IT WAS URGED THAT DETAILED INQUIRIES W ERE MADE AND THEREAFTER THE CONCLUSION WAS REACHED. THE TRIBUNAL FOUND THAT THERE WAS NO EVIDENCE ANYWHERE THAT THESE CONCERNS GAVE BOGUS VOUCHERS TO THE ASSESSEE. NO DOUBT THERE WERE CERTAIN DOUBTFUL FEATURES BUT THE EVIDENCE WAS NOT ADEQUATE TO CONCLUDE THAT THE PURCHASES MADE BY THE ASSESSEE FROM THE SAID PARTIES WERE BOGUS. THE TRIBUNAL ACCORDINGLY DID NOT SUSTAIN THE ADDITION RETAINED BY THE APPELLATE ASSISTANT COMMISSIONER. HENCE AT THE INSTANCE OF THE REVENUE THE AFORESAID QUESTION HAS BEEN REFERRED TO THIS COURT FOR OPINION. ON A PERUSAL OF THE ORDER OF THE TRIBUNAL IT CLEAR LY APPEARS THAT WHETHER THE SAID TRANSACTIONS WERE BOGUS OR NOT WAS A QUESTION OF FACT. THE TRIBUNAL H AS ALSO POINTED OUT THAT NOTHING IS SHOWN TO INDICATE THAT ANY PART OF THE FUND GIVEN BY THE ASSESSEE TO THESE PARTIES CAME BACK TO THE ASSESSEE IN ANY FORM. IT I S FURTHER OBSERVED BY THE TRIBUNAL THAT THERE IS NO EVIDENCE ANYWHERE THAT THESE CONCERNS GAVE VOUCHERS TO THE ASSESSEE. EVEN THE TWO STATEMENTS DO NOT IMPLICATE THE TRANSACTIONS WITH THE ASSESSEE IN ANY WAY. WITH THESE OBSERVATIONS THE TRIBUNAL ULTIMATE LY HAS OBSERVED THAT THERE ARE CERTAIN DOUBTFUL FEATUR ES BUT THE EVIDENCE IS NOT ADEQUATE TO CONCLUDE THAT T HE ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 15 PURCHASES MADE BY THE ASSESSEE FROM THESE PARTIES WERE BOGUS. IT MAY BE STATED THAT THE ASSESSEE WAS GIVEN CREDIT FACILITIES FOR A SHORT DURATION AND TH E PAYMENTS WERE GIVEN BY CHEQUES. WHEN THAT IS SO IT CANNOT BE SAID THAT THE ENTRIES FOR THE PURCHASES O F THE GOODS MADE IN THE BOOKS OF ACCOUNT WERE BOGUS ENTRIES. WE THEREFORE DO NOT FIND THAT THE CONCLU SION ARRIVED AT BY THE TRIBUNAL IS AGAINST THE WEIGHT OF EVIDENCE. IN THAT VIEW OF THE MATTER WE ANSWER THE QUESTION IN THE AFFIRMATIVE THAT IS IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. ACCORDINGLY THE REFERENCE STANDS DISPOSED OF WITH NO ORDER AS TO COSTS. 2.7. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS RAJEEV G. KALATHIL (2015) 67 SOT 52 (MUM. TRIB.)(URO) IDENTICALLY HELD AS UNDER:- 2.2.AGGRIEVED BY THE ORDER OF THE AO ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).BEFORE HIM IT WAS ARGUED THAT ASSESSEE HAD FILED COPIES OF BILLS OF PURCHASE FROM DKE AND NBE THAT BOTH THE SUPPLIERS WERE REGISTERE D DEALERS AND WERE CARRYING PROPER VAT AND REGISTRATI ON NO.S THAT LEDGER ACCOUNTS OF THE PARTIES IN ASSESS EE'S BOOKS SHOWED BILLS ACCOUNTED FOR THAT PAYMENT WAS MADE BY CHEQUES THAT A CERTIFICATE FROM THE BANKER GIVING DETAILS OF CHEQUE PAYMENT TO THE SAID PARTIE S WAS ALSO FURNISHED. COPIES OF THE CONSIGNMENT RECEIVED FROM THE GOVERNMENT APPROVED TRANSPORT CONTRACTORS SHOWING THAT MATERIAL PURCHASED WAS ACTUALLY DELIVERED AT THE SITE WAS FURNISHED BEFORE THE AO. IT WAS ALSO ARGUED THAT SOME OF THE MATERIAL PURCHASED FROM THE SAID PARTIES WERE LYING PART OF CLOSING STOCK AS ON 31.03.2009 AS PER THE STATEMENT SUBMITTED ON RECORD. AFTER CONSIDERING THE ASSESSME NT ORDER AND THE SUBMISSIONS MADE BY THE ASSESSEE FAA HELD THAT THE TRANSACTIONS WERE SUPPORTED BY ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 16 PROPER DOCUMENTARY EVIDENCES THAT THE PAYMENTS MADE TO THE PARTIES BY THE ASSESSEE WERE IN CONFIRMATION WITH BANK CERTIFICATE T HAT THE SUPPLI ERS WAS SHOWN AS DEFAULT UNDER THE MAHARASHTRA VAT ACT COULD NOT BE SUFFICIENT EVIDENCES TO HOLD THAT THE PURCHASES WERE NON-GENUINE THAT THE AO HAD NOT BROUGHT ANY INDEPENDENT AND RELIABLE EVIDENCES AGAINST THE ASSESSEE TO PROVE THE NON-GENUINENESS O F THE PURCHASES THAT THERE WAS NO EVIDENCE REGARDING CASH RECEIVED BACK FROM THE SUPPLIERS. FINALLY HE DELETED THE ADDITION MADE BY THE AO . 2.3.BEFORE US DEPARTMENTAL REPRESENTATIVE ARGUED THAT BOTH THE SUPPLIERS WERE NOT PRODUCED BEFORE TH E AO BY THE ASSESSEE THAT ONE OF THEM WAS DECLARED HAWALA DEALER BY VAT DEPARTMENT THAT BECAUSE OF CHEQUE PAYMENT MADE TO THE SUPPLIER TRANSACTION CANNOT BE TAKEN AS GENUINE. HE RELIED UPON THE ORDE R OF THE G BENCH OF MUMBAI TRIBUNAL DELIVERED IN THE CASE OF WESTERN EXTRUSION INDUSTRIES. (ITA/6579/MUM/2010-DATED 13.11.2013). AUTHRORISED REPRESENTATIVE (AR) CONTENDED THAT PAYMENTS MADE BY THE ASSESSEE WERE SUPPORTED BY THE BANKERS STATEMENT THAT GOODS RECEIVED BY THE ASSESSEE FROM THE SUPPLIE WAS PART OF CLOSING STOCK THAT THE TRANSPORTER HAD ADMITTED THE TRANSPORTATION OF GOODS TO THE SITE.HE RELIED UPON THE CASE OF BABULA BORANA (282 ITR251) NIKUNJ EXIMP ENTERPRISES (P) LTD. (216TAXMAN171)DELIVERED BY THE HONBLE BOMBAY HIGH COURT. 2.4.WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT AO HAD MADE THE ADDITION AS ONE OF THE SUPPLIER WAS DECLARED A HAWALA DEALER BY THE VAT DEPARTMENT. WE AGREE THAT IT WAS A GOOD STARTING POINT FOR MAKI NG FURTHER INVESTIGATION AND TAKE IT TO LOGICAL END. B UT HE LEFT THE JOB AT INITIAL POINT ITSELF. SUSPICION OF HIGHEST DEGREE CANNOT TAKE PLACE OF EVIDENCE. HE COULD HAVE CALLED FOR THE DETAILS OF THE BANK ACCOUNTS OF THE SUPPLIERS TO FIND OUT AS WHETHER THERE WAS ANY IMMEDIATE CASH WITHDRAWAL FROM THEIR ACCOUNT. WE FIND THAT NO SUCH EXERCISE WAS DONE. TRANSPORTATION ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 17 OF GOOD TO THE SITE IS ONE OF THE DECIDING FACTOR T O BE CONSIDERED FOR RESOLVING THE ISSUE. THE FAA HAS GIV EN A FINDING OF FACT THAT PART OF THE GOODS RECEIVED B Y THE ASSESSEE WAS FORMING PART OF CLOSING STOCK. AS FAR AS THE CASE OF WESTERN EXTRUSION INDUSTRIES. (SUPRA)IS CONCERNED WE FIND THAT IN THAT MATTER CASH WAS IMMEDIATELY WITHDRAWN BY THE SUPPLIER AND THERE WAS NO EVIDENCE OF MOVEMENT OF GOODS. BUT IN THE CASE BEFORE US THERE IS NOTHING IN THE ORDER OF T HE AO ABOUT THE CASH TRAIAL. SECONDLY PROOF OF MOVEMENT OF GOODS IS NOT IN DOUBT. THERERFORE CONSIDERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE UNDER APPEAL WE ARE OF THE OPINION THAT T HE ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL INFIRMITY AND THERE ARE NOT SUFFICIENT EVIDENCE ON FILE TO ENDORSE THE VIEW TAKEN BY THE AO. SO CONFIRMING THE ORDER OF THE FAA WE DECIDE GROUND NO.1 AGAINST THE AO . 2.8. THE RATIO LAID DOWN IN THE CASE OF M/S NEETA TEXTILES VS INCOME TAX OFFICER 6138/MUM/2013 ORDER DATED 27/05/2013 SHRI JIGAR V. SHAH VS INCOME TAX OFFICE R (ITA NO.1223/M/2014) ORDER DATED 22/01/2016 M/S IMPERIA L IMP. & EXP. VS INCOME TAX OFFICER ITA NO.5427/MUM/2 015 ORDER DATED 18/03/2016 SUPPORTS THE CASE OF THE ASS ESSEE AND THE CONCLUSION DRAWN IN THE IMPUGNED ORDER. HOW EVER AS RELIED BY THE LD. DR THE HON'BLE GUJARAT HIGH C OURT IN THE CASE OF N.K. INDUSTRIES LTD. ETC VS DCIT (SUPRA ) CONSIDERING VARIOUS DECISIONS DECIDED THE ISSUE IN FAVOUR OF THE REVENUE AND THE HON'BLE APEX COURT DISMISSED TH E SLP VIDE ORDER DATED 16/01/2017 (SLP NO.(C) 769 OF 2017 ). WE ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 18 FIND THAT IN THAT CASE DURING SEARCH PROCEEDINGS CERTAIN BLANK SIGNED CHEQUE BOOKS AND VOUCHERS WERE FOUND A ND THUS THE PURCHASES MADE FROM THESE CONCERNS WERE T REATED AS BOGUS BY THE ASSESSING OFFICER. 2.9. THE HON'BLE GUJARAT HIGH COURT IN N.K. INDUST RIES LTD. VS DCIT (IT APPEAL NO.240 261 242 260 AND 2 41 OF 2003) VIDE ORDER DATED 20/06/2016 CONSIDERED THE D ECISION OF THE TRIBUNAL AND VARIOUS JUDICIAL DECISIONS INCL UDING THE CASE OF VIJAY PROTEINS AND SANJAY OILCAKES INDUSTRI ES LTD. M/S WOOLEN CARPET FACTORY VS ITAT (2002) 178 CTR 42 0 (RAJ.) THE TRIBUNAL WAS HELD TO BE JUSTIFIED IN DE CIDING THE CASE AGAINST THE ASSESSEE. THE HON'BLE APEX COURT CONFIRMED THE DECISION OF THE HIGH COURT FOR ADDING THE ENTIRE INCOME ON ACCOUNT OF BOGUS PURCHASES (SLP (C ) NO.S 769 OF 2017 ORDER DATED 16/01/2017. 2.10. IN SUCH TYPE OF CASES BROADLY THE LD. COMMISSIONER OF INCOME TAX (APPEAL) AS WELL AS THIS TRIBUNAL HAS FOLLOWED THE DECISIONS FROM HON'BLE GU JARAT HIGH COURT IN THE CASE OF SIMIT P. SETH (2013) 356 ITR 451 (GUJ.) CIT VS VIJAY M. MISTRY CONSTRUCTION LTD. (2 013) 355 ITR 498 (GUJ.) CIT VS BHOLA NATH POLY FAB. (P.) LT D. (2013) ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 19 355 ITR 290 (GUJ.) AND VARIOUS OTHER DECISIONS OF T HE TRIBUNAL AND THE DECISION OF M/S NIKUNJ EXIMP(SUPRA ) FROM HON'BLE JURISDICTIONAL HIGH COURT WHEREIN THE AGG REGATE DISALLOWANCE WAS RESTRICTED TO 12.5%. ADMITTEDLY T HERE CANNOT BE SALE WITHOUT PURCHASES. THE CASE OF THE REVENUE IS THAT THERE IS BOGUS NATURE OF PURCHASES MADE FRO M SUPPLIERS AND THE PARTIES WERE NOT FOUND EXISTING A T THE GIVEN ADDRESSES. 2.11. ADMITTEDLY IN SUCH TYPE OF CASES THERE IS NO OPTION BUT TO ESTIMATE THE PROFIT WHICH DEPENDS UPO N THE SUBJECTIVE APPROACH OF AN INDIVIDUAL AND THE MATERI AL FACTS AVAILABLE ON RECORD. HOWEVER WE FIND THAT THERE IS UNCONTROVERTED FINDING IN PARA-4.1 OF THE ASSESSMEN T ORDER THAT THE EXPLANATION OF THE ASSESSEE IS VERY GENERA L IN NATURE AND NOT SUPPORTED BY DOCUMENTARY EVIDENCE. IT IS AL SO NOTED THAT THE ASSESSEE ALSO DID NOT PRODUCE ANY EVIDENCE/DOCUMENTS TO PROVE THAT THE BANK ATTACHED ALL THE DOCUMENTS/PROPERTIES OF THE ASSESSEE. BEFORE US TH E LD. COUNSEL FOR THE ASSESSEE ALSO CLAIMED THAT PROPER OPPORTUNITY OF BEING HEARD WAS NOT PROVIDED TO THE ASSESSEE AND THERE IS A DISCREPANCY IN THE FIGURES ALSO. THU S ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 20 CONSIDERING THE TOTALITY OF FACTS WE DEEM IT APPRO PRIATE TO REMAND THIS FILE TO THE FILE OF THE LD. ASSESSING O FFICER TO EXAMINE THE CLAIM OF THE ASSESSEE AFRESH AND DECIDE IN ACCORDANCE WITH LAW. THE ASSESSEE BE GIVEN OPPORTUN ITY TO SUBSTANTIATE HIS CLAIM. THE LD. ASSESSING OFFICER M AY DECIDE THE APPEAL OF THE ASSESSEE CONSIDERING THE FACTUAL MATRIX AND IN THE LIGHT OF THE DISCUSSION MADE IN EARLIER PARAS OF THIS ORDER INCLUDING VARIOUS DECISIONS DISCUSSED HEREINABOVE. THUS THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES ONLY. FINALLY THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN TH E PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 28/11/2017. SD/- (G. MANJUNATHA) SD/- (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER # $ MUMBAI; + DATED : 28/11/2017 F{X~{T? P.S/. .. ITA NO.3765/MUM/2016 DARSHAN GAUTAM SALOT 21 %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. -./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. 2 2 # 3' ( - ) / THE CIT MUMBAI. 4. 2 2 # 3' / CIT(A)- MUMBAI 5. 56 0' 2 -& # $ / DR ITAT MUMBAI 6. 7 8$ / GUARD FILE. / / BY ORDER 15-' 0' //TRUE COPY// / (DY./ASSTT. REGISTRAR) # $ / ITAT MUMBAI