Case Law Details
ACIT Vs Sanjay Kumar Kochar (ITAT Raipur)
ACIT vs. Sanjay Kumar Kochar ITA No.99/RPR/2018 (Date of Order : 26.07.2022) relating to deletion of addition on account of Bogus Purchases & Bogus Sales. Entire Addition was deleted.
As regards the infirmities in the vehicle registration numbers as was relied upon by the A.O for supporting his conviction that the assesee had only obtained bogus bills and not made any genuine purchases of the goods in question, we find that the assesee qua the said issue vide his letter dated 20.12.2016 that was filed before the CIT(Appeals), had came forth with necessary clarifications and correct vehicle numbers which matched with the weighment slips at CCI. On a perusal of the aforesaid factual position, we are of the considered view that now when the assessee had corrected the mistakes and provided the correct vehicle numbers which tallied with the weighment slips of CCI, then, there remained no occasion for doubting the authenticity of the assessee’s claim of having purchased the goods in question. As regards the sustainability of the adverse inferences that were drawn by the A.O qua the authenticity of the purchase transactions, for the reason that now when the registration of the sellers in question had been cancelled, therefore, the same belied the claim of the assessee of having purchased goods from the said concerns, we are afraid is a view arrived at on the basis of half-baked facts. As observed by the CIT(Appeals), and rightly so, though the registration of some of the suppliers had been cancelled by the Commercial Tax Department prior to the impugned purchases claimed by the assessee, but then on the said standalone basis it could not have been inferred that the business of the said suppliers was completely closed down, because there was evidence that goods were supplied by the said parties to the assessee through the brokers. Apart from that, as observed by the CIT(Appeals), we find that except for in the case of 4 suppliers registrations in the case of the remaining suppliers was cancelled by the Commercial Tax Department much after the end of the relevant financial year in which the assessee had purchased rice from them. Also, we concur with the view taken by the CIT(Appeals) that for the reason that the suppliers in question had not shown rice sales in their sales tax returns filed with the Commercial Tax Department, adverse inferences as regards the genuineness of the assessee’s claim of having purchased goods from them could not have justifiably been drawn, specifically when supporting documentary evidence was placed on record by the assessee. We are, also, in agreement with the view taken by the CIT(Appeals) that now when the assessee had made payments to the suppliers through banking channels i.e., RTGS/NEFT and A/c payee cheques, therefore, it was incorrect on the part of the A.O in absence of any supporting material to conclude that the amount in question would have been withdrawn and returned to the assessee after deducting commission on the same. Also, we find substance in the view of the CIT(Appeals) that though the A.O had pressed into service the statements of the brokers/accommodation entry provides wherein they had elaborated at length the modus-operandi of providing of bogus bills and accommodation entries, but in the absence of any direct and specific admission or reference by them, therein alleging that they had merely provided bogus bills and had not supplied any goods to the assessee; or that the invoices were false and fabricated, there was no justification on his part to have adopted a generalized approach for drawing adverse inferences in the hands of the assessee on the basis of the said statements. Apart from that, we concur with the observation of the CIT(Appeals) that as the assessee, viz. Shri Sanjay Kumar Kochar in his statement recorded on 16.12.2016 had at no stage admitted of having booked bogus purchases or procured accommodation bills, but on contrary had provided correct registration numbers of the vehicles in which material was transported from the suppliers to CCI, the same, thus, adduced his claim of having made genuine purchases from the aforementioned parties. As regards the support drawn by the A.O from the statement of Shri Suresh Sahu, a transporter who owned vehicle No.CG 04-J-4701 and had claimed that though in the bill (stated to have been issued by him) it was mentioned that goods had been transported to Nagpur, but his vehicles in question did not ply on the Nagpur route and plied on the Orissa route, we find, that as observed by the CIT(Appeals) the same had rightly been rebutted by the assesee by placing on record copy of weighment slips i.e, RST number 1128 of CCI, wherein, the aforesaid truck number was found mentioned on the invoice. Considering the aforesaid facts, we concur with the view taken by the CIT(Appeals) that as the A.O had not controverted the material which was submitted by the assessee during the course of the assessment proceedings, viz. vehicle numbers (which were corrected in the assessment proceeding), bank details, transportation details of trucks, custom clearance details, export sales and domestic sales documents, confirmation from exporters a/w. copies of account, but had chosen to focus more on the modus operandi adopted by the firms/brokers for providing bogus bills/accommodation entries, therefore, in absence of dislodging of the aforesaid supporting documents/materials there was no justification on his part in drawing adverse inferences as regards the authenticity of the purchases in question.
We, thus, in terms of our aforesaid observations, finding no infirmity in the well-reasoned view taken by the CIT(Appeals) as regards the authenticity of the purchases claimed by the assessee to have been made from the aforesaid suppliers/brokers, uphold his view to the said extent.
Adverting to the authenticity of the sale of goods in question, we find that the A.O holding a conviction that as the assessee had merely procured bogus purchase bills and had not made any genuine purchase of goods in question, therefore, there could be no occasion of having carried out any corresponding sales of the same, had thus on a pro-rata basis disallowed the corresponding sales and recharacterized the same as unexplained credits in the books of accounts of the assessee. As we have on the basis of our aforesaid deliberations concluded that the assessee had made genuine purchases, which thereafter, were proved to the hilt to have been sold to the aforementioned buyers i.e., both for export and domestic sales, therefore, finding no basis for drawing of adverse inferences as regards the authenticity of the sale transactions by the A.O., we concur with the well-reasoned view of the CIT(Appeals) who had rightly vacated the said addition. Accordingly, the order of the CIT(Appeals) who had vacated the recharacterization of the duly accounted sales of Rs.11,29,52,261/- of the assessee as unexplained cash credits by the A.O is also upheld. Thus, the grounds of appeal raised by the Revenue are dismissed in terms of our aforesaid observations.
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