ASST CIT CIR 3, KALYAN v. RICH & ROYAL, MUMBAI

ITA 6652/MUM/2013 | 2009-2010
Pronouncement Date: 30-09-2016

Appeal Details

RSA Number 665219914 RSA 2013
Assessee PAN AADFR3357G
Bench Mumbai
Appeal Number ITA 6652/MUM/2013
Duration Of Justice 2 year(s) 10 month(s) 15 day(s)
Appellant ASST CIT CIR 3, KALYAN
Respondent RICH & ROYAL, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Department
Bench Allotted D
Tribunal Order Date 30-09-2016
Assessment Year 2009-2010
Appeal Filed On 14-11-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI SANJAY GARG (JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACCOUNTANT MEMBER) I.T.A. NO.6610/MUM/2013 (ASSESSMENT YEAR: 2009-10) M/S RICH AND ROYAL C/O N.A.KULKARNI WADAL BUILDING 1 ST FLOOR MANPADA ROAD NEAR DNSB BANK DOMBIVLI (E) 421 201 VS DCIT CIR.3 KALYAN PAN : AADFR3357G (APPELLANT) (RESPONDENT) I.T.A. NO.6652/MUM/2013 (ASSESSMENT YEAR : 2009-10) ACIT CIR.3 KALYAN VS M/S RICH AND ROYAL C/O N.A.KULKARNI WADAL BUILDING 1 ST FLOOR MANPADA ROAD NEAR DNSB BANK DOMBIVLI (E) 421 201 (APPELLANT) (RESPONDENT) ASSESSEE BY SHRI SUBODH RATNAPARKHI REVENUE BY SHRI B.S. BIST (CIT DR) DATE OF HEARING : 28-09-2016 DATE OF PRONOUNCEMENT : 30 -09-2016 2 I.T.A. NO.6610 & 6652 /MUM/2013 O R D E R PER ASHWANI TANEJA AM: THESE CROSS APPEALS ARE FILED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-1 THANE [HEREINAFTER CALLED C IT(A)] DATED 26-08-2013 AGAINST THE ASSESSMENT ORDER DATED 29-12-2011 FOR A .Y. 2009-10 U/S 143(3) OF THE ACT. THE ASSESSEE HAS RAISED THE FOLLOWING GRO UNDS OF APPEAL: THE LEARNED CIT (A) -1. THANE HAS PARTLY ALLOWED T HE APPEAL INSTEAD OF ALLOWING IN FULL. 2. HE HAS CONFIRMED THE ADDITION OF RS. 12 86 761/- OUT OF THE ADDITION DONE BY THE AO OF RS. 51 47 044/- WHICH I S AGAINST THE PRINCIPLES OF LAW. PRAYER: THE APPELLANT REQUESTS TO ALLOW THE APPEAL IN FULL INSTEAD OF ALLOWING PARTLY AND REQUESTS TO DELETE THE UPHELD ADDITION O F AO BY CIT(A)-1 THANE. BRIEF: THE APPELLANT IS CARRYING ON THE BUSINESS OF SELLIN G READYMADE GARMENTS AND CLOTH AT KALYAN HAVING GOOD BUSINESS AND IS ASSESSED TO THE CIRCLE-3 OF KALYAN FROM LAST EIGHT YEARS. DU RING THE ASSESSMENT PERIOD THE AO DETERMINED SOME PURCHASES MADE BY THE ASSESSEE FROM THE PARTIES ON WHOM SURVEY WAS CO NDUCTED AND HE STATED THAT HE HAD ISSUED ONL Y BILLS AND THE SAID STATEMENTS WERE LATER ON RETRACTED BY HIM. THE SAME ISSUE WAS CONSIDERED BY THE MUMBAI ITAT 'I' BENCH AND HAS CONSIDERED THE F ACTS IN THE CASE OF JITENDRA HARSHAD KUMAR TEXTILES PVT. LTD. S A NO. ITA 771/MUM/201 1 A.Y. 2007-08 AND HAVE DECIDED THE ISS UE IN FAVOUR OF THE ASSESSEE. WE HAVE PURCHASED THE GOODS FROM THE SAID PARTIES AND WE THEREFORE REQUEST THE ADDITION UPHELD TO THE EXTENT OF RS. 12 86 761/- IS FOUND UNWARRANTED AND TO BE DELETED. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- 1. WHETHER ON FACTS & IN THE CIRCUMSTANCE OF THE C ASE AND IN LAW THE HONBLE CIT(A) WAS JUSTIFIED IN RESTRICTING THE ADD ITION TO 2% OF RS.51 47 044/- MADE ON ACCOUNT OF BOGUS PURCHASES F ROM 5 PARTIES OVERLOOKING THE FACT THAT THE PURCHASES ARE BOGUS? 3 I.T.A. NO.6610 & 6652 /MUM/2013 2. THE COMMON ISSUE INVOLVED IN BOTH THE APPEALS IS WI TH REGARD TO ADDITION MADE BY THE AO ON ACCOUNT OF BOGUS PURCHAS ES FROM 5 PARTIES. 3. THE BRIEF FACTS ARE THAT THE ASSESSEE WAS ENGAGED I N THE BUSINESS OF RETAIL TRADE BUSINESS IN CLOTH AND READYMADE GARMENTS AND OTHER RELATED PRODUCTS. THE ASSESSEE IS AUTHORISED DEALER OF CLOTH AND GARM ENTS OF RAYMOND BRAND. DURING THE ASSESSMENT PROCEEDINGS IT WAS NOTED BY THE AO THAT THE ASSESSEE HAD MADE PURCHASES FROM FOLLOWING 5 PARTIES: 1. M/S MANOJ MILLS 2. M/S ASTHA SILK INDUSTRIES 3. M/S SHREE RAM SALES & SYNTHETICS 4. M/S DEV VANI INDUSTRIES 5. M/S SAI NATH TEXTILES IT WAS NOTED BY THE AO THAT THESE PARTIES WERE BOGU S AND THEREFORE PURCHASES MADE FROM THESE PARTIES AGGREGATING TO RF S.51 47 044 WERE FULLY DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSE SSEE. BEING AGGRIEVED ASSESSEE FILED APPEAL BEFORE LD. CIT(A) WHERE 25% OF THE SAME WAS ALLOWED BY LD. CIT(A) AND THE REMAINING AMOUNT WAS CONFIRMED. REVENUE HAS FILED APPEAL AGAINST THE RELIEF GRANTED BY THE LD. CIT(A) (75% O F THESE PURCHASES) WHEREAS THE ASSESSEE FILED APPEAL WITH REGARD TO THE ADDITI ON CONFIRMED BY THE LD.CIT(A) (I.E. 25% OF THE PURCHASES DISALLOWED BY THE AO). 3. DURING THE COURSE OF HEARING IT WAS SUBMITTED AT T HE OUTSET BY THE LD. COUNSEL THAT SIMILAR ISSUE WITH REGARD TO THE SAME PARTIES HAD ARISEN IN THE EARLIER YEARS I.E. A.Y. 2005-06 AND THE MATTER REA CHED UPTO THE TRIBUNAL. THE TRIBUNAL DECIDED THE ISSUE COMPLETELY IN FAVOUR OF THE ASSESSEE. THE LD. COUNSEL RELIED UPON THE ORDER OF THE TRIBUNAL PASSE D IN ASSESSEES OWN CASE AND REQUESTING FOR DELETING THE ADDITION FULLY. 4. PER CONTRA THE LD. DR RELIED UPON THE ORDERS OF TH E LOWER AUTHORITIES. 4 I.T.A. NO.6610 & 6652 /MUM/2013 5. WE HAVE GONE THROUGH THE ORDERS OF THE LOWER AUTHOR ITIES AS WELL AS THE ORDER OF THE TRIBUNAL FOR A.Y. 2005-06 IN ITA NOS 5 297/MUM/2014 & ITA NO. 5817/MUM/2014 ORDER DATED 237-07-2016. IT IS NOTED THAT IN THE ASSESSMENT ORDER FOR A.Y. 2005-06 THE FACTS ARE SIMILAR. THERE ALSO PURCHASES WERE FULLY DISALLOWED BY THE AO WHEREAS THE LD. CIT(A) HAD GRA NTED RELIEF TO THE EXTENT OF 75% OF SUCH PURCHASES AND CONFIRMED 25% OF SUCH PUR CHASES. CROSS APPEALS WERE FILED BEFORE THE TRIBUNAL; THE TRIBUNAL DISMIS SED THE APPEAL OF THE REVENUE AND ALLOWED THE APPEAL OF THE ASSESSEE. TH US FULL RELIEF WAS GRANTED BY THE TRIBUNAL AND THESE PURCHASES WERE HELD TO BE GENUINE. THE RELEVANT PART OF THE OBSERVATIONS OF THE TRIBUNAL IS REPRODU CED HEREUNDER: 3. WE HAVE HEARD LD AUTHORISED REPRESENTATIVE (AR) OF ASSESSEE AND LD DEPARTMENTAL REPRESENTATIVE (DR) FOR REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AR OF THE ASSESSEE AR GUED THAT ALL PURCHASES OF ASSESSEE WERE GENUINE AND THE PAYMENTS WERE MADE THROUGH BANKING TRANSACTION. DURING THE REASSESSMEN T PROCEEDING THE AO ISSUED NOTICE TO THOSE PARTIES. IN RESPONSE TO THE NOTICE OF THE AO ALL THE PARTIES SUBMITTED THEIR REPLY DATED 21. 01.2013; THE PARTIES ALSO FURNISHED THE PHOTOCOPIES OF THEIR REPLY TO TH E ASSESSEE. THE ASSESSEE FURTHER FILED THE PHOTOCOPIES OF PURCHASED BILLS LEDGER ACCOUNTS SHOWING THE TRANSACTION. THE BANK STATEMEN T DEPICTING THE PAYMENT AGAINST THE PURCHASES THROUGH CROSS ACCOUNT PAYEE CHEQUE. THE AO WAS RELYING UPON THE STATEMENT OF SHRI RAKES H KUMAR M. GUPTA PROP. OF M/S MANOJ MILLS RECORDED U/S 131 ON 23.02.2009 BY ITO WARD 14(3) MUMBAI WHEREIN HE ALLEGEDLY ADMITT ED THAT NO TRANSACTION OF PURCHASE AND SALE HAD BEEN MADE BY H IM AND ONLY ACCOMMODATION BILLS HAD BEEN PROVIDED. IN THE ORDER THE AO REPRODUCED THE STATEMENT OF SHRI RAKESH KUMAR M. GU PTA. IN THE SAID STATEMENT IT IS NOT MENTIONED THAT ACCOMMODATION BI LLS WERE PROVIDED TO THE ASSESSEE. THE LD AR FURTHER ARGUE D THAT SHRI RAKESH KUMAR M. GUPTA WAS NOT WELL DUE TO ILL HEALTH AND C OULD NOT ATTEND THE PROCEEDING BEFORE THE AO IN PERSON. THIS FACT W AS COMMUNICATED BY RAKESH KUMAR GUPTA THROUGH HIS LETTER DATED 21.0 1.2013 AND FURTHER ON 11.03.2013. AR OF THE ASSESSEE ALSO DRAW N OUR ATTENTION ON THE PHOTOCOPIES OF AFFIDAVIT OF MR.MOHIT RAKESH KUM AR GUPTA PROPRIETOR OF M/S ASTHA SILK INDUSTRIES AND MRS. HE MA RAKESH KUMAR 5 I.T.A. NO.6610 & 6652 /MUM/2013 GUPTA WHO IS CARRYING THE BUSINESS IN THE NAME OF M/S. SHREERAM SALES & SYNTHETICS AND THE COPY OF THEIR REPLIES FI LED IN RESPONSE TO THE NOTICE U/S 133(6) OF THE ACT AND COPY LEDGER ACCOU NT ALONG WITH PURCHASE INVOICE AND BANK STATEMENT. AR OF ASSESSEE FURTHER ARGUED THAT THE ASSESSEE HAS GENUINELY PURCHASED ALL MATER IAL AND MADE THE PAYMENTS THEREOF. SHRI RAKESH KUMAR M. GUPTA IN SUP PORT OF GENUINENESS OF TRANSACTION WITH THE ASSESSEE ALSO F ILED AN AFFIDAVIT BEFORE THE AO WHEREIN IT WAS CLEARLY DEPOSED THAT H E NEVER PROVIDED ACCOMMODATION BILLS/ENTRY TO THE ASSESSEE THE CONF IRMATION OF LEDGER ACCOUNT OF ALL PARTIES WERE ALSO SUBMITTED TO THE A O. AR OF THE ASSESSEE FURTHER ARGUED THAT LD. CIT (A) RESTRICTED THE ADDITION TO 25% OF THE PURCHASES WITHOUT ANY BASIS AND THE SAME ARE LIABLE TO BE DELETED. AR OF THE ASSESSEE RELIED UPON THE VARIOUS DECISION OF THIS TRIBUNAL IN M/S NEETA TEXTILES VS. ITO ITA NO. 61 38/MUM/13 DT. 27.05.15 M/S JITENDRA HARSHADKUMAR TEXTILES VS. IT O IN ITA NO. 771/MUM/11 DT. 21.11.12 M/S C. CHOTALAL & CO. VS. ITO IN ITA NOS. 3960 TO 3967/MUM/12 DT. 24.09.2013 M/S PERMIT TEXT ILES VS. ITO IN ITA NOS. 3948 TO 3953/MUM/12 DT. 01.10.13 & DCIT VS . SMT. NEENA M. LEKHI IN ITA NO. 1608/MUM/13 DT. 14.01.2015. DR FOR REVENUE ARGUED THAT THE ASSESSEE WAS NOT MAINTAINING STOCK REGISTER AND THERE WAS NO PROOF OF DELIVERY OF GOODS AND FURTHER RELIED UPON THE STATEMENT OF MR. RAKESH KUMAR GUPTA RECORDED BY ITO WARD 14(3) U/S131 OF THE ACT. LD DR FOR REVENUE FURTHER ARGUED THAT WHEN NOTICE U/S133(6) WAS ISSUED TO THOSE PARTIES THEY DID FAI LED TO ENCLOSED ANY DOCUMENTARY EVIDENCES IN THEIR SUPPORT AND STRONGLY SUPPORTED THE ORDER OF AO AND PRAYED THAT ORDER OF AO BE RESTORED AND THAT ORDER PASSED BY LD. CIT(A) FOR RESTRICTING THE ADDITION T O 25% MAY BE QUASHED. 4. WE HAVE CONSIDERED THE RIVAL CONTENTION OF THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE AO MADE THE R E-OPENING OF THE ASSESSMENT AFTER RECORDING THE SATISFACTION. THE AS SESSEE HAS NOT ASSAILED THE RE-OPENING BEFORE US. WHILE FRAMING TH E ASSESSMENT AO INFERRED THAT CERTAIN PARTIES WERE FOUND TO BE NONG ENUINE AS THEY WERE PROVIDING ONLY ACCOMMODATION BILLS THE AO RAI SED SUSPICION ABOUT THE PURCHASES FROM M/S MANOJ MILLS FOR RS. 32 27 804/- M/S ASTHA SILK INDUSTRIES FOR RS. 27 02 082/- AND M/S S HREE RAM SALES & SYNTHETICS FOR RS.20 38 898/-. THE NOTICES WERE ISS UED TO THE PARTIES THE PARTIES FILED THEIR REPLY BUT NO DOCUMENTS TO S UBSTANTIATE THEIR SALES WERE FILED. AS NO DOCUMENTARY EVIDENCE WAS EN CLOSED TO PROVE THE TRANSACTION. THE AO RELIED UPON THE STATEMENT O F MR. RAKESH 6 I.T.A. NO.6610 & 6652 /MUM/2013 KUMAR GUPTA WHICH WAS RECORDED U/S 131 DURING THE S URVEY PROCEEDINGS. THE ASSESSEE WAS SHOW-CAUSED AS TO WHY THESE PARTIES SHOULD NOT BE TREATED AS NON-GENUINE. THE ASSESSEE SUBMITTED HIS REPLY AND CONTENDED THAT PROPRIETOR OF ALL THREE CO NCERN HAVE FILED THEIR REPLY WHEREIN THEY HAVE ALREADY STATED THAT THE TRANSACTION ARE GENUINE AND FURTHER CONTENDED THAT MR. RAKESH KUMAR GUPTA HAS GIVEN AFFIDAVIT THAT NO ACCOMMODATION BILLS WERE PR OVIDED TO THE ASSESSEE. RAKESH KUMAR GUPTA FURTHER GAVE IN WRITIN G THAT DUE TO HIS ILL HEALTH HE IS NOT IN A POSITION TO TRAVEL AND A TTEND THE PROCEEDING PERSONALLY AND ANY FURTHER ENQUIRY MAY MADE FROM HI S THROUGH TELEPHONIC CONVERSATION. THE SUBMISSION MADE AND TH E CONFIRMATION FILED BY ASSESSEE WAS NOT ACCEPTED BY THE AO AND A O MADE THE ADDITION OF AGGREGATE AMOUNT OF PURCHASES FROM THRE E PARTIES. DURING THE APPELLATE PROCEEDING THE SIMILAR CONTEN TION WAS MADE AND IT WAS FURTHER CONTENDED THAT AS PER SECTION 37 (1) THE PURCHASES USED FOR TRADING AND MANUFACTURING ACTIVITIES CANNO T BE TREATED AS EXPENDITURE OR EXPENSES WHICH CAN BE DISALLOWED AS GOODS ARE NECESSARY FOR TRADING PURPOSE AND THE ADDITION MADE BY AO IS BEYOND THE PURVIEW OF SECTION 37(1) OF THE ACT. LD. CIT(A) CONCLUDED THAT HE HAS CONFIRMED THE IDENTICAL ADDITION AGAINST THE AS SESSEE IN ASSESSEES CASE FOR AY 2009-10. THE REOPENING FOR T HE YEAR UNDER CONSIDERATION IS PRIMARILY BASED ON THE ASSESSMENT ORDER OF AY 2009- 10 AND THE FACTS ARE IDENTICAL. THOUGH THE CIT(A) C ONCLUDED THAT THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION ON WHOL E OF THE AMOUNT/NON-GENUINE/BOGUS PURCHASES AND RESTRICTED I T TO 25% OF THE IMPUGNED PURCHASES. THE LD. CIT(A) HAS NOT GIVEN AN Y REASON FOR RESTRICTING THE PURCHASES TO 25% OF IMPUGNED PURCHA SES. WE HAVE NOTICED THAT NEITHER THE AO NOR THE CIT(A) DISPUTED THAT THE PAYMENTS FOR PURCHASES WERE MADE BY CROSS CHEQUES WHICH ARE DULY REFLECTED IN THE BANK STATEMENT NOR ANY DISCREPANCY WAS NOTICED BY AO. THE AO AND THE CIT(A) NOT DISPUTED THE SALE OF THE ASSESSE E THE AO HAS NOT BROUGHT ANY MATERIAL ON RECORD WHICH MAY SUGGEST T HAT THE PAYMENT MADE TO PURCHASE OF GOODS WERE AGAIN RECEIVED IN CA SH BY ASSESSEE. THE STATEMENTS OF BANK ACCOUNTS OF PARTIES WERE NOT EXAMINED. SECTION 69C PROVIDES THAT IF THE EXPLANATION OFFERE D BY THE ASSESSEE ABOUT THE SOURCE OF EXPENDITURE IS NOT FOUND SATISF ACTORY BY THE AO THE AMOUNT MAY BE ADDED TO HIS INCOME. THE AO HAS N OT RECORDED THE SATISFACTION THAT THE PURCHASES MADE BY ASSESSEE AR E NOT GENUINE. THE AO MERELY RELIED UPON THE STATEMENT OF MR. RAKE SH KUMAR GUPTA. MR. RAKESH KUMAR GUPTA HAS NOT REFERRED THE NAME OF 7 I.T.A. NO.6610 & 6652 /MUM/2013 ASSESSEE WHILE MAKING SUCH STATEMENT. THE ASSESSEE HAS RELIED UPON THE DECISION OF M/S NEETA TEXTILES VS. ITO (SUPRA) WHEREIN SIMILAR IMPUGNED PURCHASES WERE ALSO TRANSACTED THROUGH MR. RAKESH KUMAR GUPTA (RETRACTED LATER ON) ADMITTING THAT SALES MAD E TO THE PARTIES ARE GENUINE. THE COORDINATE BENCH OF THIS TRIBUNAL WHILE RELYING THE CASE OF M/S JITENDRA HARSHADKUMAR & CO (SUPRA) DELE TED THE ENTIRE ADDITIONS OF BOGUS PURCHASES. FURTHER THE COORDINA TE BENCH OF THIS TRIBUNAL IN PRAMIT TEXTILES VS. ITO (SUPRA) HELD AS UNDER:- 7. WE HAVE PERUSED THE ASSESSMENT ORDER AND THE OR DER OF CIT(A). WE HAVE ALSO PERUSED THE ORDER OF THE TRIBUNAL MUMB AI 'I' BENCH IN THE CASE OF M/S. JEETENDRA HARSHADKUMAR TEXTILES IN ITA NO.771 AND 2211/MUM/2011 FOR ASSESSMENT YEAR 2007-08 DATED 21/ 11/2012. WE FIND FORCE IN THE CONTENTIONS OF THE COUNSEL THAT T HE FACTS AND CIRCUMSTANCES ARE IDENTICAL THOUGH THE FIGURES MAY DIFFER. THE TRIBUNAL HAD GIVEN ITS FINDING AT PARA-8 ON PAGE-5 OF ITS ORDER WHICH READS AS UNDER :- '8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. IT WILL BE RELEVANT TO R EPRODUCE THE LETTER RECEIVED BY THE AO FROM SHRI RAKESH KUMAR GUPTA WH ICH IS ALSO REPRODUCED IN THE ASSESSMENT ORDER: 'I AM IN RECEIPT OF YOUR SUMMONS U/S. 131 OF THE I. T.ACT. 1961 IN THE CASE OF M/S. JITENDRA HARSHAD KUMAR TEXTILE PVT. LT D. ASKING ME TO ATTEND BEFORE YOUR GOODSELF WITH THE DETAILS OF MY ACCOUNT WITH THE SAID M/S. JITENDRA HARSHAD KUMAR TEXTILE PVT. LTD. FOR A.Y.2002-03 & 2007-08. AS YOU ARE AWARE THAT MY ASSESSING OFFICER HAD RECO RDED ALLEGED STATEMENT U/S. 133A AND 131 OF THE I.T.ACT. 1961 I HAVE BEEN RECEIVING WITNESS SUMMONS FROM ALL FOUR CORNERS OF THE CITY ON THE GROUND THAT I HAVE GIVEN ACCOMMODATION BILL THOUGH I HAVE DENIED THE CONTENT OF THE STATEMENTS RECORDED BY A.O. U/S. 133A & 131 VIDE MY LETTER DATED 27.4.2009 AND MY AFFIDAVIT DATED 20 .2.2009 SUBMITTED TO WARD 14(3)(2). IT IS PHYSICALLY IMPOSS IBLE FOR ME TO ATTEND BEFORE VARIOUS INCOME TAX AUTHORITIES AS I AM NOT FEELING WELL IT WILL NOT POSSIBLE FOR A.YS02-03 TO 07-08.ME TO A TTEND BEFORE YOUR GOODSELF IN RESPONSE TO YOUR ABOVE MENTIONED SUMMON S. AS REGARDS M/S. JITENDRA HARSHAD KUMAR TEXTILES PVT . LTD. IS CONCERNED. I HAVE ALREADY GIVEN MY AFFIDAVIT WHEREI N I HAVE SPECIFICALLY STATED THAT I HAVE SOLD THE GOODS TO M /S. JITENDRA HARSHAD KUMAR TEXTILES P. LTD. AND THE CONSIDERATION IS REC EIVED TO ME BY CROSS 8 I.T.A. NO.6610 & 6652 /MUM/2013 ORDER CHEQUE. COPY OF THE SAID LEDGER ACCOUNT IS AL READY SUBMITTED THE DEPARTMENT.' 8.1 FROM THE ABOVE LETTER IT IS CLEAR THAT THE SAME WAS WRITTEN IN RESPONSE TO NOTICE ISSUED BY THE AO. NOT ONLY SHRI RAKESH KUMAR GUPTA HAS STATED THAT HE HAS RETRACTED FROM THE STA TEMENT RECORDED DURING THE SURVEY BUT ALSO FILED AN AFFIDAVIT DATED 20/2/2009 AND LETTER DATED 27/4/2009 TO DENY THE STATEMENT MADE D URING THE SURVEY UNDER SECTION 133A. HE HAS FURTHER CONFIRMED THAT T HE SALES MADE BY THE ASSESSEE WERE EFFECTED AND THE CONSIDERATION WA S RECEIVED BY CROSS ORDER CHEQUES. THUS IT IS CLEAR THAT THERE IS NO MATERIAL ON RECORD TO SAY THAT THE PURCHASES MADE BY THE ASSESS EE FROM THE SAID CONCERN WERE BOGUS EXCEPT THE GENERAL STATEMENT REC ORDED BY THE DEPARTMENT IN THE CASE OF SHRI RAKESH KUMAR GUPTA WHICH WAS LATER ON RETRACTED. IN ABSENCE OF ANY MATERIAL BROUGHT ON RECORD AGAINST THE SUBMISSIONS MADE BY SHRI RAKESH KUMAR GUPTA IN HIS LETTER DATED 20/12/2009 FILED BEFORE THE AO OF THE ASSESSEE THE ADDITION IF ANY MADE IN THE CASE OF THE ASSESSEE WILL BE BASED ON P RESUMPTION ONLY AND IT CANNOT BE SUSTAINED IN THE EYES OF LAW. AS A GAINST THAT ASSESSEE HAS SUBMITTED VARIOUS EVIDENCES TO SHOW THAT THE AC TUAL DELIVERY OF THE GOODS WAS RECEIVED BY THE ASSESSEE FROM THE SAI D PARTY WHICH HAS NOT BEEN DISCARDED BY THE AO. THE ADDITION SUSTAINE D BY LD. CIT(A) IS ALSO ON PRESUMPTION BASIS. THEREFORE KEEPING IN VI EW THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE OPINION TH AT ADDITIONS MADE BY THE AO DESERVES TO BE DELETED IN ITS ENTIRETY. W E DECIDE ACCORDINGLY.' 7.1 ON IDENTICAL FACTS AND ISSUES THIS BENCH HAS DECIDED THE APPEAL IN THE 7.1 ON IDENTICAL FACTS AND ISSUES THIS BENCH HAS DECIDED THE APPEAL IN THE CASE OF M/S. C. CHOTALAL & CO. IN ITA NOS. ITA NO.3960 TO 3967/MUM/2012 FOR ASSESSMENT YEARS 2002-03 TO 2009- 10 DATED 24/09/13 WHEREIN ONE OF US (THE ACCOUNTANT MEMBER) IS A PARTY TO THE SAID DECISION. SINCE THE FACTS AND ISSUES BEING IDENTICAL WE HAVE NO HESITATION IN FOLLOWING THE ORDER OF OUR CO-ORDI NATE BENCH. RESPECTFULLY FOLLOWING THE SAME ALL THE APPEALS FIL ED BY THE ASSESSEE ARE PARTLY ALLOWED AND ALL THE APPEALS FILED BY THE REVENUE ARE ACCORDINGLY DISMISSED. AS WE HAVE SEEN THAT THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASES REFERRED ABOVE HAS CATEGORICALLY NOTED THAT M R. RAKESH KUMAR GUPTA WHEN CONFRONTED WITH HIS STATEMENT HAS CATEGO RICALLY REBUTTED HIS STATEMENT IN COURSE OF CROSS-EXAMINATION (THOUG H NOT APPEARED IN THE PRESENT CASE). AND THE CO-ORDINATE BENCH OF THI S TRIBUNAL IN ALL 9 I.T.A. NO.6610 & 6652 /MUM/2013 CASES DELETED THE ADDITION WHICH WAS BASED ON THE S TATEMENT OF MR. RAKESH KUMAR GUPTA. WE HAVE ALSO NOTICED THAT PROPR IETORS OF M/S ASTHA SILK INDUSTRIES & M/S SHREE RAM SALES & SYNTH ETICS ALSO FILED THEIR AFFIDAVIT ABOUT THE SALE AND PURCHASE OF GOOD S. THE AO DID NOT MAKE ANY FURTHER ENQUIRY NOR EXAMINED THEM. THE AO AND CIT(A) NOT REFERRED IN THEIR ORDER ABOUT THE FILING OF AFFIDAV IT BY THE PROPRIETOR OF M/S ASTHA SILK INDUSTRIES & M/S SHREE RAM SALES & S YNTHETICS. THE ASSESSEE HAS PLACED ON RECORD THE LEDGER ACCOUNT OF M/S MANOJ MILLS M/S ASTHA SILK INDUSTRIES & M/S SHREE RAM SALES & S YNTHETICS ALONG WITH THE BILLS AND DELIVERY CHALLANS WHEREIN PAYMEN T MADE THROUGH CHEQUES ARE DULY REFLECTED. THE SALE OF THE ASSESSE E IS NOT DISPUTED BY AO AND LD CIT(A). THUS EVIDENCES ARE SUFFICIENT TO SHOW THAT ACTUAL DELIVERY OF GOODS WAS RECEIVED BY ASSESSEE FROM THE SAID PARTIES. WHILE MAKING THE SUBMISSION DR FOR REVENUE HAS NOT COUNTERED ANY OF THE EVIDENCE PLACED ON RECORD BY THE ASSESSEE. W ITH THESE OBSERVATIONS WE HOLD THAT AO MADE THE ADDITION ON THE BASIS OF MERE PRESUMPTION AND THE LD CIT (A) ALSO SUSTAINED THE 2 5% OF ADDITION WITHOUT GIVING ANY REASONING. THEREFORE KEEPING IN VIEW THE PACULARITY OF FACTS AND CIRCUMSTANCES OF THE CASE THE ENTIRE ADDITION MADE BY THE AO DESERVES TO BE DELETED. HENCE THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED. ITA NO. 5817/MUM/2014 5. REVENUE HAS FILED THIS APPEAL AGAINST RESTRICTIN G THE ADDITION TO 25% OF THE IMPUGNED PURCHASES. AS WE HAVE ALREADY A LLOWED THE APPEAL OF THE ASSESSEE IN ITA NO. 5297/MUM/2014 WHE REIN WE HAVE DELETED THE ENTIRE ADDITION THUS THE PRESENT APPEA L OF REVENUE HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED AS PER THE OBSERVATION MADE HEREIN ABOVE. 6. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS A LLOWED AND APPEAL OF THE REVENUE IS TREATED AS DISMISSED. 6. IT IS STATED BY THE PARTIES BEFORE US THAT THE NATU RE OF EVIDENCES AND THE FACTS AND CIRCUMSTANCES OF THE CASE ARE IDENTICAL I N BOTH THE YEARS. THEREFORE RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL FO R A.Y. 2005-06 WE HOLD THE PURCHASES AS FULLY ALLOWABLE. 10 I.T.A. NO.6610 & 6652 /MUM/2013 7. CONSEQUENTLY APPEAL FILED BY THE ASSESSEE IS ALLOW ED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON THIS _30 TH DAY OF SEPTEMBER 2016. SD/- SD/- (SANJAY GARG) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DT : 30 TH SEPTEMBER 2016 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE D-BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT MUMBAI BENCHES