w w w . L a w y e r S e r v i c e s . i n



Pr Commissioner of Income Tax-13, Mumbai v/s Vaman International Pvt. Ltd.


Company & Directors' Information:- K N INTERNATIONAL LIMITED [Active] CIN = U45201UP2002PLC026841

Company & Directors' Information:- D B H INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74899DL1950PTC057209

Company & Directors' Information:- V AND S INTERNATIONAL PVT LTD [Active] CIN = U74899DL1992PTC049964

Company & Directors' Information:- S S A INTERNATIONAL LTD [Active] CIN = U15122DL1995PLC068186

Company & Directors' Information:- A T N INTERNATIONAL LIMITED [Active] CIN = L65993WB1983PLC080793

Company & Directors' Information:- D D INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51909PB1995PTC016929

Company & Directors' Information:- T K INTERNATIONAL LIMITED [Active] CIN = U55101OR1982PLC001092

Company & Directors' Information:- N R INTERNATIONAL LIMITED [Active] CIN = L74999WB1991PLC051738

Company & Directors' Information:- K J INTERNATIONAL LIMITED [Active] CIN = L15142PB1993PLC011274

Company & Directors' Information:- A K S INTERNATIONAL LIMITED [Active] CIN = U74899DL1996PLC076327

Company & Directors' Information:- S P INTERNATIONAL PRIVATE LIMITED [Active] CIN = U70100WB1994PTC063228

Company & Directors' Information:- B. K. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74999DL2006PTC157013

Company & Directors' Information:- R S C INTERNATIONAL LIMITED [Active] CIN = L17124RJ1993PLC007136

Company & Directors' Information:- J C INTERNATIONAL LIMITED [Active] CIN = U51109WB1999PLC089037

Company & Directors' Information:- M T L INTERNATIONAL PRIVATE LIMITED [Amalgamated] CIN = U24219UP2001PTC025965

Company & Directors' Information:- T C N S INTERNATIONAL PRIVATE LIMITED [Amalgamated] CIN = U51311DL1996PTC080096

Company & Directors' Information:- K V S INTERNATIONAL PRIVATE LIMITED [Active] CIN = U18101DL2003PTC120770

Company & Directors' Information:- G N INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51909DL2001PTC110766

Company & Directors' Information:- S H A M INTERNATIONAL PRIVATE LIMITED [Active] CIN = U45200MH1994PTC079867

Company & Directors' Information:- M K INTERNATIONAL LIMITED [Active] CIN = U51909DL1996PLC083430

Company & Directors' Information:- V. G. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51101DL2007PTC162540

Company & Directors' Information:- D R INTERNATIONAL PRIVATE LIMITED [Active] CIN = U24132DL1996PTC079867

Company & Directors' Information:- R H INTERNATIONAL LIMITED [Active] CIN = U72900DL2007PLC159452

Company & Directors' Information:- G & G INTERNATIONAL PRIVATE LIMITED [Active] CIN = U17120DL2012PTC234047

Company & Directors' Information:- A & D INTERNATIONAL PRIVATE LIMITED [Active] CIN = U36109RJ2007PTC024176

Company & Directors' Information:- H G E INTERNATIONAL PRIVATE LIMITED [Active] CIN = U19115UP2011PTC045112

Company & Directors' Information:- K A I INTERNATIONAL PRIVATE LIMITED [Active] CIN = U13100OR2007PTC009647

Company & Directors' Information:- C G INTERNATIONAL PRIVATE LIMITED [Active] CIN = U99999MH1996PTC097577

Company & Directors' Information:- K C INTERNATIONAL LIMITED [Active] CIN = U74899DL1994PLC060402

Company & Directors' Information:- M P INTERNATIONAL PRIVATE LIMITED [Active] CIN = U29130MH1997PTC107943

Company & Directors' Information:- A S INTERNATIONAL LIMITED [Strike Off] CIN = U74899DL1993PLC056158

Company & Directors' Information:- H C S INTERNATIONAL PRIVATE LIMITED [Active] CIN = U15312PB2012PTC036219

Company & Directors' Information:- L N G INTERNATIONAL LIMITED [Active] CIN = U51909DL1993PLC053438

Company & Directors' Information:- S. D. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74900UP2008PTC036047

Company & Directors' Information:- S AND I INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51909DL1995PTC072210

Company & Directors' Information:- L T INTERNATIONAL LIMITED [Active] CIN = U74899DL1999PLC097892

Company & Directors' Information:- A. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51102GJ2008PTC053840

Company & Directors' Information:- S J M INTERNATIONAL LIMITED [Active] CIN = U52110DL1987PLC028571

Company & Directors' Information:- S B S INTERNATIONAL PRIVATE LIMITED [Active] CIN = U18101DL1997PTC085878

Company & Directors' Information:- R. A. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51225DL2008PTC177405

Company & Directors' Information:- B G INTERNATIONAL PRIVATE LIMITED [Active] CIN = U50300PB2014PTC038889

Company & Directors' Information:- S F INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74999PB2000PTC023654

Company & Directors' Information:- R T S INTERNATIONAL PRIVATE LIMITED [Active] CIN = U63022DL1997PTC089328

Company & Directors' Information:- I K INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74899DL1995PTC066267

Company & Directors' Information:- C K INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74899DL1991PTC045625

Company & Directors' Information:- L A INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51909PB2010PTC033683

Company & Directors' Information:- H R V INTERNATIONAL PRIVATE LIMITED [Amalgamated] CIN = U74899UP1993PTC057665

Company & Directors' Information:- K P INTERNATIONAL PRIVATE LIMITED [Active] CIN = U24110GJ2007PTC050026

Company & Directors' Information:- V S INTERNATIONAL PRIVATE LIMITED [Active] CIN = U85100MH1997PTC109647

Company & Directors' Information:- N N INTERNATIONAL PRIVATE LIMITED [Active] CIN = U01111DL1999PTC099094

Company & Directors' Information:- S R V INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74140DL2012PTC243060

Company & Directors' Information:- V. S. Y. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74999UP2008PTC035521

Company & Directors' Information:- U M I INTERNATIONAL LTD [Strike Off] CIN = U51909WB1990PLC049671

Company & Directors' Information:- A. R. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51900MH2010PTC228539

Company & Directors' Information:- B R INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74899DL1993PTC055562

Company & Directors' Information:- M J INTERNATIONAL PRIVATE LIMITED [Amalgamated] CIN = U74899DL1982PTC013231

Company & Directors' Information:- D N INTERNATIONAL LIMITED [Active] CIN = U36911TN1996PLC034205

Company & Directors' Information:- M. H. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U70102DL2007PTC164267

Company & Directors' Information:- H AND Z INTERNATIONAL LIMITED [Active] CIN = U10102AS1995PLC004509

Company & Directors' Information:- M G M INTERNATIONAL PVT LTD [Active] CIN = U74899DL1982PTC013580

Company & Directors' Information:- J J INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51109DL1992PTC047657

Company & Directors' Information:- VAMAN INTERNATIONAL PRIVATE LIMITED [Active] CIN = U36100MH2002PTC137848

Company & Directors' Information:- H D INTERNATIONAL LIMITED [Active] CIN = U74899DL1994PLC060720

Company & Directors' Information:- K. A. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51101UP2012PTC049338

Company & Directors' Information:- J & G INTERNATIONAL PRIVATE LIMITED [Active] CIN = U18109DL2012PTC238392

Company & Directors' Information:- K R INTERNATIONAL PRIVATE LIMITED [Active] CIN = U17291DL2008PTC172188

Company & Directors' Information:- D. J. INTERNATIONAL LIMITED [Strike Off] CIN = U65910MH1999PLC119298

Company & Directors' Information:- S P INTERNATIONAL PVT LTD [Strike Off] CIN = U99999UP1965PTC003091

Company & Directors' Information:- J M INTERNATIONAL PVT LTD [Active] CIN = U45201WB1991PTC050829

Company & Directors' Information:- D P C INTERNATIONAL PVT LTD [Active] CIN = U74210WB1984PTC037378

Company & Directors' Information:- B M INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74899DL1992PTC048736

Company & Directors' Information:- S G INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U51109WB1998PTC086547

Company & Directors' Information:- B N INTERNATIONAL PRIVATE LIMITED [Active] CIN = U15412WB1999PTC089316

Company & Directors' Information:- V A INTERNATIONAL PRIVATE LIMITED [Active] CIN = U01111DL2000PTC104712

Company & Directors' Information:- S. J. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U27310DL2007PTC169438

Company & Directors' Information:- N H B INTERNATIONAL PRIVATE LIMITED [Converted to LLP] CIN = U67190MH1997PTC107387

Company & Directors' Information:- P D K INTERNATIONAL PVT LTD [Active] CIN = U74140WB1992PTC056468

Company & Directors' Information:- G. S. C. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U29120MH1994PTC080380

Company & Directors' Information:- A J INTERNATIONAL PRIVATE LIMITED [Converted to LLP] CIN = U74899DL1994PTC060818

Company & Directors' Information:- J S M INTERNATIONAL LIMITED [Active] CIN = U85110KA1996PLC020046

Company & Directors' Information:- M K N INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51909DL2002PTC117207

Company & Directors' Information:- N M INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74120MH2012PTC234492

Company & Directors' Information:- S S M INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51909DL1997PTC089876

Company & Directors' Information:- A P J INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U51909HR2010PTC040304

Company & Directors' Information:- T. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U72900DL1997PTC091049

Company & Directors' Information:- V R INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51101UP2011PTC043952

Company & Directors' Information:- A & F INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U00265KA1995PTC018998

Company & Directors' Information:- M E C INTERNATIONAL PRIVATE LIMITED [Active] CIN = U33111GJ1963PTC082423

Company & Directors' Information:- J K INTERNATIONAL PRIVATE LIMITED [Active] CIN = U01100MH2004PTC144492

Company & Directors' Information:- D. S. R. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74999UP2010PTC039954

Company & Directors' Information:- B L S INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74900UR2010PTC033210

Company & Directors' Information:- R B INTERNATIONAL LTD [Strike Off] CIN = U18101WB1993PLC059515

Company & Directors' Information:- P Y INTERNATIONAL PRIVATE LIMITED [Converted to LLP] CIN = U51102RJ1995PTC010133

Company & Directors' Information:- R C INTERNATIONAL LIMITED [Strike Off] CIN = U51909TG1991PLC012477

Company & Directors' Information:- N J INDIA INTERNATIONAL LIMITED [Strike Off] CIN = U70101UP2004PLC028722

Company & Directors' Information:- I AND A INTERNATIONAL PRIVATE LIMITED [Active] CIN = U72200TG1995PTC019936

Company & Directors' Information:- P V INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74899DL1998PTC094598

Company & Directors' Information:- I B INTERNATIONAL PRIVATE LIMITED [Under Process of Striking Off] CIN = U72200DL2000PTC105735

Company & Directors' Information:- A M INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U74899DL1995PTC066228

Company & Directors' Information:- K K M INTERNATIONAL PRIVATE LIMITED [Active] CIN = U17110MH1995PTC089836

Company & Directors' Information:- Z. H. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U21098MH2010PTC210735

Company & Directors' Information:- J R INTERNATIONAL PRIVATE LIMITED [Active] CIN = U51909TN2002PTC048744

Company & Directors' Information:- H P AND B G INTERNATIONAL PRIVATE LIMITED [Active] CIN = U50500DL1999PTC100851

Company & Directors' Information:- L S INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U74999DL2009PTC193390

Company & Directors' Information:- M B INTERNATIONAL PVT LTD [Strike Off] CIN = U52190DL2001PTC110572

Company & Directors' Information:- O K R INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U74900DL1996PTC077152

Company & Directors' Information:- B B C INTERNATIONAL PVT LTD [Strike Off] CIN = U25209WB1984PTC037383

Company & Directors' Information:- K S INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U51909MH2001PTC134345

Company & Directors' Information:- A TO Z INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U51101TN1992PTC022507

Company & Directors' Information:- C & A INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U51900MH1982PTC026718

Company & Directors' Information:- J S INTERNATIONAL PVT LTD [Strike Off] CIN = U51900MH1982PTC027604

Company & Directors' Information:- A C INDIA INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74899DL1989PTC034784

Company & Directors' Information:- S. S. N. INTERNATIONAL PRIVATE LIMITED [Active] CIN = U29306DL1981PTC012616

Company & Directors' Information:- INDIA INTERNATIONAL COMPANY PRIVATE LIMITED [Active] CIN = U51228MH1955PTC009483

Company & Directors' Information:- A H INTERNATIONAL PRIVATE LIMITED [Active] CIN = U55101RJ2021PTC073171

Company & Directors' Information:- R K INTERNATIONAL PVT LTD [Strike Off] CIN = U63040PB1982PTC004926

Company & Directors' Information:- L & P INTERNATIONAL PRIVATE LIMITED [Active] CIN = U52100DL2016PTC292025

Company & Directors' Information:- J D K INTERNATIONAL PVT LTD [Active] CIN = U74899DL1982PTC014087

Company & Directors' Information:- R B N INTERNATIONAL PRIVATE LIMITED [Active] CIN = U52300DL2012PTC243998

Company & Directors' Information:- P AND P INTERNATIONAL PRIVATE LIMITED. [Strike Off] CIN = U24100OR1993PTC003244

Company & Directors' Information:- B P INTERNATIONAL PVT LTD [Strike Off] CIN = U31909HP1984PTC005785

Company & Directors' Information:- E C INTERNATIONAL PVT LTD [Strike Off] CIN = U99999DL1982PTC013146

Company & Directors' Information:- R A R E INTERNATIONAL PRIVATE LIMITED [Active] CIN = U31900DL2005PTC134395

Company & Directors' Information:- D I D INTERNATIONAL PRIVATE LIMITED [Converted to LLP] CIN = U28112MH2014PTC258750

Company & Directors' Information:- S R A INTERNATIONAL PVT LTD [Strike Off] CIN = U99999DL1980PTC010389

Company & Directors' Information:- R Z INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74900KA2012PTC064445

Company & Directors' Information:- M M INTERNATIONAL PVT LTD [Converted to LLP] CIN = U51312DL1977PTC008583

Company & Directors' Information:- A K INDIA INTERNATIONAL PRIVATE LTD [Strike Off] CIN = U45201DL1981PTC012389

Company & Directors' Information:- O P INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U55101PB2013PTC037499

Company & Directors' Information:- J & A INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U51900PB2013PTC037302

Company & Directors' Information:- A P M INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U74900TN2014PTC095953

Company & Directors' Information:- Y. A. INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U74900RJ2012PTC040431

Company & Directors' Information:- D & A INTERNATIONAL PRIVATE LIMITED [Active] CIN = U74999MH2015PTC262713

Company & Directors' Information:- R L INTERNATIONAL PRIVATE LIMITED [Active] CIN = U18204UP2016PTC076344

Company & Directors' Information:- V P S INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U93030UP2014PTC066242

Company & Directors' Information:- J V INTERNATIONAL PRIVATE LIMITED [Strike Off] CIN = U51102DL2012PTC240197

Company & Directors' Information:- R I K INTERNATIONAL PRIVATE LIMITED [Under Process of Striking Off] CIN = U52590DL2015PTC283801

Company & Directors' Information:- Y & H INTERNATIONAL PRIVATE LIMITED [Active] CIN = U63000DL2014PTC266649

Company & Directors' Information:- S R L INTERNATIONAL PRIVATE LIMITED [Under Process of Striking Off] CIN = U20296AP2013PTC085533

Company & Directors' Information:- M D INTERNATIONAL LIMITED [Active] CIN = U74140MH1981PTC025007

Company & Directors' Information:- INTERNATIONAL CO PRIVATE LIMITED [Strike Off] CIN = U51109UR1935PTC000663

Company & Directors' Information:- A B C INTERNATIONAL PVT LTD [Strike Off] CIN = U99999DL1990PTC041062

Company & Directors' Information:- D C M INTERNATIONAL LTD. [Strike Off] CIN = U99999DL2000PTC004208

Company & Directors' Information:- B C I INTERNATIONAL LIMITED [Strike Off] CIN = U74900DL1977PLC008468

    Income Tax Appeal No. 1940 of 2017

    Decided On, 29 January 2020

    At, High Court of Judicature at Bombay

    By, THE HONOURABLE MR. JUSTICE UJJAL BHUYAN & THE HONOURABLE MR. JUSTICE MILIND N. JADHAV

    For the Appearing Parties: Akhileshwar Sharma, Advocate.



Judgment Text

Ujjal Bhuyan, J.1. Heard Mr. Akhileshwar Sharma, learned standing counsel, revenue for the appellant.2. This appeal has been fled by the revenue under Section 260A of the Income Tax Act, 1961 ("the Act" for short) against the order dated 16.11.2016 passed by the Income Tax Appellate Tribunal, "F" Bench, Mumbai ("Tribunal" for short) in Income Tax Appeal No. 794/Mum/2015 for the Assessment Year 2010-11.3. Revenue has preferred the appeal projecting the following questions as substantial questions of law :"(A) Whether on the facts and in the circumstances of the case and in law, Tribunal was justifed in holding that provisions of section 69C of the Income Tax Act, 1961 are not applicable in case of bogus purchases or sales where the genuineness of the transaction is not explained or explanation ofered by the assessee is not satisfactory and the same is to be treated as income of the assessee ?(B) Whether on the facts and in the circumstances of the case and in law, Tribunal was justifed in holding that in order to prove genuineness of the said purchase transaction even though assessee did not provide any lorry receipts or delivery challans for the delivery of goods and that the same fact is established by the Assessing Ofcer, then is it mandatory for the Assessing Ofcer to limit himself to the mere submission and other documents provided by the assessee even though the purchases are non-genuine ?(C) Whether on the facts and in the circumstances of the case and in law, Tribunal was justifed in holding that while applying the provisions of Section 69C of the Income Tax Act, 1961, the Assessing Ofcer was required to cause further enquiries in the matter to ascertain the genuineness or otherwise of the sham transaction ?"4. From the above, it is evident that the issue before the Court for consideration is the addition made by the Assessing Ofcer to the income of the assessee on account of unexplained expenditure under Section 69C of the Act which was deleted by the frst appellate authority and afrmed by the Tribunal.5. Assessee is a company engaged in the business of trading and sale of furniture and allied items on wholesale basis. For the Assessment Year under consideration assessee fled ereturn of income declaring total income of Rs.13,80,371/- and book proft under Section 115JB of the Act at Rs.14,55,806/-.6. The case was selected for scrutiny and notices under Sections 143(2) and 142(1) of the Act were issued. In the course of the assessment proceeding, Assessment Ofcer doubted the expenditure of Rs.4,75,42,385/- stated to be on account of purchase from two parties i.e. Impex Trading Co. for an amount of Rs.2,90,80,292/- and Victor Intertrade Pvt. Ltd. for an amount of Rs. 1,84,62,093/-. Assessing Ofcer acted on the basis of information received from the ofce of Director General of Income Tax (Inv), Mumbai and from the Sales Tax Department that in the list of bogus sales parties the names of the aforesaid two parties were included which rendered the purchase transaction doubtful. Show cause notice was issued by the Assessing Ofcer to the assessee to show cause as to why the aforesaid amount should not be treated as unexplained expenditure and added back to the income of the assessee. It is seen that the assessee submitted reply and the matter was heard.7. Assessing Ofcer observed that the assessee did not produce lorry receipts and other related documents to refect movement of goods sold and purchased which were crucial for determining genuineness of the purchase transaction. In the absence thereof, Assessing Ofcer drew a negative presumption.8. By the assessment order dated 22.03.2013 passed under Section 143(3) of the Act, Assessing Ofcer added the said amount to the total income of the assessee u/s. 69C of the Act by treating the expenditure as bogus purchases.9. Aggrieved by the aforesaid order of the Assessing Ofcer, assessee preferred appeal before the Commissioner of Income Tax (Appeals)-20, Mumbai (hereinafter referred to as the "first appppellate authorrit""). On the grounds and reasons mentioned in the appellate order dated 12.11.2014, the frst appellate authority held that such addition by the Assessing Ofcer could not be sustained. Accordingly, Assessing Ofcer was directed to delete the addition of Rs.4,75,42,385/-.10. Against the decision of the frst appellate authority, revenue preferred appeal before the Tribunal. Tribunal by the order dated 16.11.2016 upheld the order of the frst appellate authority and dismissed the appeal of the revenue.11. Hence, revenue is before us in appeal.12. Mr. Sharma has taken us to the order passed by the Assessing Ofcer and submits that considering the goods involved in the purchase and sale, assessee was required to produce documents to show the movement of materials as well as stock ledger of the goods. In the absence thereof, Assessing Ofcer was justifed in invoking the provisions of Section 69C of the Act in making the addition. This fact was overlooked by the two lower appellate authorities below, thus vitiating the impugned order.13. We have considered the submissions made by Mr. Sharma and also perused the orders passed by the authorities below.14. At the outset, we may advert to Section 69C of the Act which is extracted hereunder :-"69C : Where in any fnancial year an assessee has incurred any expenditure and he ofers no explanation about the source of such expenditure or part thereof or the explanation, if any, ofered by him is not, in the opinion of the Assessing Ofcer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such fnancial year.Provided that, notwithstanding anything contained in any other provisions of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income."15. Section 69C deals with unexplained expenditure. It says that where an assessee has incurred any expenditure and he ofers no explanation about the source of such expenditure or part thereof or if the explanation ofered by him is in the opinion of the Assessing Ofcer not satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for the fnancial year under consideration. As per the proviso, once such expenditure is treated as unexplained expenditure which is deemed to be the income of the assessee, the same shall not be allowed as a deduction under any head of income.15.1. Thus, Section 69C contains a deeming provision. As per the deeming provision, if an assessee incurs any expenditure in the relevant previous year but he ofers no explanation about the source of such expenditure or part thereof or if the explanation provided is not satisfactory to the Assessing Ofcer, then the amount covered by such expenditure or part thereof shall be deemed to be the income of the assessee and once it is so deemed, the same shall not be allowed as a deduction under any head of income.15.2 Gujarat High Court in Krishna Textiles v/s. CIT, 310 ITR 227 ; has held that under Section 69C the onus is on the revenue to prove that the income really belongs to the assessee.16. The frst appellate authority while deleting the addition made by the Assessing Ofcer under Section 69C held that Assessing Ofcer did not doubt the sales and stock records maintained by the assessee. By submitting confrmation letters, copies of invoices, bank statement, payment order, payment by account payee cheques etc., assessee had proved that sale and purchases had taken place. By highlighting the fact that all the payments against the purchases were made through banking channel by way of account payee cheques, the frst appellate authority held that source of expenditure was fully established by the assessee beyond any doubt. He has further recorded that during appellate proceedings the assessee had furnished complete quantitative details of the items of goods purchased during the year under consideration and their corresponding sales.17. We may now advert to the order passed by the Tribunal, relevant portion of which is extracted hereunder :"4.4.1 We have heard the rival contentions and perused and carefully considered the materials on record, including the judicial pronouncements cited. On an appreciation of the materials on record, it is evident from the order of assessment that it is on the basis of information obtained from Sales Tax Department that the AO issued the show cause notice to the assessee to explain the said purchases and issued notices under section 133(6) of the Act to the said two parties from whom the said purchases were made, to which there was no response. The AO primarily relying on the information obtained from the Sales Tax Department and sworn statements given before the Sales Tax Department by Sri Pradeep Vyas of M/s. Victor Intertrade P. Ltd. and Shri Ketan Shah of M/s Impex Trading Company held the said purchases to be bogus. While it may be true that the said two purchase parties did not appear before the AO, for whatever reasons, the fact remains that the assessee itself had fled copies of purchase bills, copies of purchase/sale invoices, challan-cum tax invoices in respect of purchases, extracts of stock ledgers showing entry/exit of materials; copies of bank statements to evidence that payment from these purchases were made through normal banking channels, etc. to establish the genuineness of the said purchases. It is a fact evident on record that the AO has not doubted the sales efected by the assessee and therefore it is in order to conclude that without corresponding purchases being efected, the assessee could not have made sales.4.4.2 In our considered view, the AO has not brought on record any material evidence to conclusively prove that the said purchases are bogus. Mere reliance by the AO on information obtained from the Sales Tax Department or the sworn statement of two parties before the Sales Tax Department, without afording the assessee any opportunity to cross examine those witnesses in this regard or the fact that these parties did not respond to notice under section 133(6) of the Act, would not in itself sufce to treat the purchases as bogus and make the addition. If the AO doubted the genuineness of this said purchases, it was incumbent upon him to cause further inquiries in the matter to ascertain the genuineness or otherwise of the transactions. Without causing any further enquires in respect of the said purchases, the AO cannot make the addition under section 69C of the Act by merely relying on information obtained from the Sales Tax Department, the statement/afdavit of third parties, Shri Pradeep Vyas and Ketan Shah; without the assessee being aforded any opportunity of cross examination of that persons and for non-response to notices under section 133(6) of the Act.4.4.3 In the factual matrix of the case, where the AO failed to cause any enquiry to be made to establish his suspicions that the said purchases are bogus, the assessee has brought on record documentary evidences to establish the genuineness of the purchase transactions, the action of the AO in ignoring these evidences cannot be accepted. Further, the Hon'ble Bombay High Court in the case of Ashish International (supra) has held that the genuineness of the statements relied upon by Revenue is not established when the assessee disputes the correctness of those statements and has not been aforded adequate opportunity to cross examine these parties even though he has asked for the same. Moreover, as correctly observed by the learned CIT(A), when the payment for the said purchases to the concerned two parties is through proper banking channels and there is no evidence brought on record by the AO to establish that the said payments were routed back to the assessee, the addition made by the AO under section 69C of the Act is unsustainable. We are fortifed in this view of ours by the decisions of, inter alia, the Hon'ble Bombay High Court in the cases of Nikunj Eximp Enterprises Pvt. Ltd. (supra), Ashish International (supra), the decision of the Coordinate Benches of this Tribunal in the case of Hiralal Chunilal Jain (supra) and Imperial Imp & Exp (supra). In this factual matrix of the case, as discussed above, we fnd no requirement for interference in the order of the learned CIT(A) and consequently uphold the same. Therefore, Revenue's fve grounds (i) to (vii) are dismissed.In the result, Revenue's appeal for A.Y. 2010-11 is dismissed. Order pronounced in the open court on 16 th November, 2016."17.1. Thus, from the above, it is seen that Tribunal had returned a fnding of fact that the assessee had fled copies of purchase bills, copies of purchase/ sale invoices, challan cum tax invoices in respect of the purchases, extracts of stock ledger showing entry/exit of the materials purchased, copies of bank statements to show that payment for such purchases were made through regular banking channels, etc., to establish the genuineness of the purchases. Thereafter, Tribunal held that Assessing Ofcer could not bring on record any material evidence to show that the purchases were bogus. Mere reliance by the Assessing Ofcer on information obtained from the Sales Tax Department or the statements of two persons made before the Sales Tax Department would not be sufcient to treat the purchases as bogus and thereafter to make addition under Section 69C of the Act. Tribunal has also held that

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if the Assessing Ofcer had doubted the genuineness of the purchases, it was incumbent upon the Assessing Ofcer to have caused further enquiries in the matter to ascertain genuineness or otherwise of the transaction and to have given an opportunity to the assessee to examine/cross-examine those two parties vis-a-vis the statements made by them before the Sales Tax Department. Without causing such further enquiries in respect of the purchases, it was not open to the Assessing Ofcer to make the addition under Section 69C of the Act.18. We are in agreement with the view expressed by the Tribunal. In fact, Tribunal has only afrmed the fnding of the frst appellate authority. Thus, there is concurrent fnding of fact by the two lower appellate authorities.19. This Court in the case of Cormmissiorner orf Incorme Tax -1, Mumbai v/s. Nikunj Eximpp Enterpprises(P.) Ltd., 372 ITR 619 ; wherein an identical fact situation arose did not interfere with the order passed by the Tribunal and held that no substantial question of law arose from such order. It was held that merely because the suppliers had not appeared before the Assessing Ofcer, no conclusion could be arrived at that the purchases were not made by the assessee.20. On thorough consideration of the matter, we do not fnd any error or infrmity in the view taken by the Tribunal. No substantial question of law arises therefrom. Thus, there is no merit in the appeal. Appeal is accordingly dismissed. However, there shall be no order as to costs.
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