MADHYA PRADESH HIGH COURT
CIT v. Prestige Foods Ltd.
IT APPEAL NO. 23 OF 2010
JUNE 19, 2012
JUDGMENT
Heard on the question of admission.
1. The respondent-Company derives income from manufacture of Soyabeen oil. The assessing officer for the assessment year 1992-93, vide order of assessment dated 27.3.1995, found the claim of the respondent-Company in respect of purchase of Soya seed from M/s. M.M. General Merchants, M/s. Garg Traders and M/s Nilesh Traders to be bogus and held that there was no delivery of goods by these parties. The Commissioner of Income Tax (Appeals-II), vide order dated 23.11.1995, had set aside the said finding of the assessing authority by holding that the purchases claimed by the respondent from these parties were not bogus. Accordingly the Commissioner deleted the addition of Rs. 84,25,342/- made by the assessing authority on this account. The Income Tax Appellate Tribunal, vide order dated 27.11.2009, has affirmed the finding of the Commissioner.
2. Learned counsel appearing for the appellant submitted that the Tribunal has committed an error in taking the view that the purchases made by the respondent from the aforesaid parties were not bogus. He further submitted that the tribunal is not right in holding that the assessee was not required to prove the source of purchase.
3. Having heard the learned counsel for the appellant, it is found that the question as to whether the purchases made by the respondent from the parties concerned were genuine or bogus is a pure question of fact. The Commissioner as well as ITAT have elaborately dealt with this issue and have concurrently found that the purchases made by the respondent from the concerned parties were not bogus. While arriving at the said finding, the Commissioner as well as the ITAT have taken into account all the relevant circumstances as well as the material on record.
4. The Commissioner while dealing with the aforesaid aspect of the matter has held as under :-
“5.3 After applying my mind to the facts of the case, I am inclined to hold that the above submissions of the learned counsel are quite justified. The AO has simply mentioned in the asstt. Order that on enquiry some of the vehicles shown to have been involved in the supply of seeds have been found to be two-wheelers and cars and not trucks & metadors, but has not given any specific instance. Therefore, the charge made by the AO to this extent cannot be verified by this office. Even otherwise, it is a fact that the vehicle Nos. are being mentioned at the gate-passes by the security staff who are not highly literate and who may write an alphabet of insurance in such a way that any person may read it to be some other alphabet. For example it is quite possible that the gate-keeper writes the alphabets OD on the gate pass which the next record may read as OO or DO or DD for the simple reason that the first person might have written the two alphabets in a near similar fashion. Therefore, no adverse inference can be derived only for the reason of discrepancy in the vehicle numbers. The fact remains that the appellant has been showing purchases from the three concerns and total purchases made in the two Units from three concerns in the present assessment year is found to be as under :-
