ITO Co. Ward-4 (1), V. J.H. Business Product (P) Ltd,

ITA 1370/DEL/2008

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1254 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 13-12-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 11-04-2008
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Keywords: Bogus purchase; Depreciation; Accommodation entries; Capital expenditure
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C: NEW DELHI BEFORE SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI J.S. REDDY, ACCOUNTA NT MEMBER ITA NO. 1370/DEL/2008 ASSESSMENT YEAR 2003-04 I.T.O. CO.WARD 4 (1) VS M/S. J.H. BUSINESS & PRODUCTS (P) LTD. NEW DELHI. 13-B, 3 RD FLOOR, NETAJI SUBHASH MARG, DARYA GANJ, NEW DELHI 110 002. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SATPAL SINGH, S R. DR RESPONDENT BY : SHRI RAJIV SEXENA, ADVOCATE SHRI AB HISHEK VERMA, ADVOCATE ORDER PER I.C. SUDHIR, JUDICIAL MEMBER THE REVENUE HAS QUESTIONED FIRST APPEL LATE ORDER ON THE FOLLOWING GROUNDS :- 1. THE ORDER OF THE LEARNED CIT(APPEALS) IS ERRO NEOUS & CONTRARY TO FACTS & LAW. 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (APPEALS) HAS ERRED IN DELETING THE DIS ALLOWANCE OF RS. 14000/- CLAIMED U/S 351 ON ACCOUNT OF ROC FEES IGNORING THAT IT WAS HELD IN THE CASE OF CIT V HINDUSTAN INS ECTICIDES LTD. (2001) 250 ITR 338 (DEL) THAT FEES PAID FOR IN CREASE IN SHARE CAPITAL IS NOT FEES FOR REGISTRATION OF THE C OMPANY & HENCE NOT AMORTIZABLE U/S 35D (2) OF THE INCOME TAX ACT. 3. ON THE FACTS AND IN THE CI RCUMSTANCES OF THE CASE, THE LEARNED CIT (APPEALS) HAS ERRED IN DELETING THE ADDI TION OF RS. 26,20,800/- MADE ON ACCOUNT OF BOGUS PURCHAS ES MADE FROM THE M/S. KUMAR BANSAL TRADERS (P) LTD. IGNOR ING THAT ITA NO. 1370/DEL/08 2 A) SH. ATUL KUMAR BANSAL, WHO CONTROLS M/S. KUMA R BANSAL TRADERS (P) LTD. ADMITTED ON OATH THAT THIS CONCERN WAS USED TO PROVIDE ACCOMMODATION ENTRIES. B) ON INDEPENDENT ENQUIRIES MADE BY THE A.O. M/S. KUMAR BANSAL TRADERS (P) LTD. WAS NOT FOUND AT THE GIVEN ADDRESS. C) EVEN THE ENQUIRIES FROM THE SALE S TAX DEPARTMENT ABOUT THE EXISTENCE OF M/S. KUMAR BANSAL TRADERS (P) LTD. HAD PROVED THE NON EXISTENCE OF THE SAID CONCERN. D) THE ASSESSEE FAILED TO PRODUCE THE PRINCIPA L OFFICER OF SAID CONCERN AND ALSO FAILED TO FURNISH ANY INFORMATION AS TO WHEREABOUTS OF SAID CONCERN. E) THE CASE LAWS MENTIONED BY AO I N THE ASSESSMENT ORDER ARE RELEVANT & APPLICABLE TO THIS CASE. F) THE LD. CIT(A) HAS HIMSELF STA TED IN HIS APPELLATE ORDER THAT IT IS LIKELY THAT THE BILLS IN RESPECT OF THESE PUR CHASE HAVE BEEN PURCHASED FROM THE GREY MARKET. G) THE LD. CIT(A) HAS HIMSELF STA TED IN HIS APPELLATE ORDER THAT THE EXISTENCE OF M/S. KUMAR BANSAL TRADERS (P) LTD. IS DOUBTFUL & APPEARED TO HAVE BEEN ISSUED THE ACCOMMODATION ENTRIES ONLY. 4. ON THE FACTS AND IN THE CIRCUMSTA NCES OF THE CASE, THE LEARNED CIT (APPEALS) HAS ERRED IN DELETING THE CONSEQUENTI AL ADDITION OF RS.1,24,643/- MADE AS PROFIT EARNED IN RESPECT OF A BOVE TRANSACTION OF RS. 26,20,800/-. 2. GROUND NO.1 IS GENERAL IN NATURE HENCE DOES NOT NEED INDEPENDENT ADJUDICATION. 3. GROUND NO. 2 AT THE OUTSET OF HEARING LD. AR FAIRLY CONCEDED THA T THE ISSUE RAISED IN THE GROUND IS FULLY COVERED BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF ITA NO. 1370/DEL/08 3 CIT VS. HINDUSTAN INSECTICIDES LTD. 250 ITR 338 (DE LHI) AGAINST THE ASSESSEE. THE ISSUE IS REGARDING FEE PAID FOR ENHANCEMENT OF SHARE CAPITAL CLAIMED U/S 35D OF THE ACT I.E. DEDUCTION ON AMORTISATION OF CERTAI N PRELIMINARY EXPENSES. THE HONBLE DELHI HIGH COURT IN THE ABOVE CITED CASE HA S BEEN PLEASED TO HOLD THAT SUCH EXPENDITURE IS CAPITAL EXPENDITURE AND DEDUCTI ON IS NOT ALLOWABLE U/S 35D(2)(C)(III) OF THE ACT. THE GROUND IS THUS ALLOW ED IN FAVOUR OF THE REVENUE. 4. GROUND NOS. 3 & 4 THE RELEVANT FACTS ARE THAT THE AO MADE ADDITION OF RS. 26,20,800/- U/S 69(C) OF THE ACT ON ACCOUNT OF BOGUS PURCHASES MADE FROM M/S. KUMAR BANSAL TRADES (P) LTD.( IN SHORT KBTPL) . HE MADE FURTHER ADDITION OF RS. 1,24,643/- ON ACCOUNT OF PROFIT EARNED IN RESPECT OF ABOVE TRANSA CTION OF RS. 26,20,800/-. ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIG ATION WING OF THE DEPARTMENT THAT IN HIS STATEMENT ONE SHRI ATUL KUMAR BANSAL, DIRECTOR OF M/S. VISHAL IRON WORKS (P) LTD. HAD ADMITTED THAT HE WAS ENGAGED IN THE BUSINESS OF PROVIDING BOGUS ACCOMMODATION ENTRIES THROUGH MANY CONCERNS C ONTROLLED BY HIM. ONE OF SUCH CONCERN WAS M/S. KUMAR BANSAL TRADERS (P) LTD. FROM WHOM THE ASSESSEE HAD MADE THE PURCHASES OF RS. 26,20,800/-. SHRI ATU L KUMAR BANSAL IN HIS STATEMENT ALSO ADMITTED THAT HE USED TO CHARGE THE COMMISSION @ 0.2% FOR PROVIDING THE ACCOMMODATION ENTRIES. HE ADMITTED TH AT THE PURCHASER PARTY USED TO ISSUE HIM CHEQUES OF THE SAME AMOUNT AS SHOWN BY HIM ON THE SALE BILLS AND AFTER ENCASHING THE SAME CHEQUES AND DEDUCTING HIS COMMISSION, HE USED TO REFUND THE CASH BACK TO THE PARTIES WHO HAD MADE TH E BOGUS PURCHASES FROM ITA NO. 1370/DEL/08 4 HIM. THE ASSESSE CONFRONTED THE SAID INFORMATION WI TH THIS OBJECTION THAT THEY HAD MADE THE PURCHASES BY ACCOUNT PAYEE CHEQUE IN T HE NORMAL COURSE OF BUSINESS, THEIR SALES ARE DULY ASSESSED BY EXCISE A ND TAXATION DEPARTMENT OF HARYANA, ETC. THE AO WAS NOT SATISFIED WITH THE EX PLANATION OF THE ASSESSEE AS AFTER MAKING INDEPENDENT ENQUIRES THE AO COULD NOT TRACE THE EXISTENCE OF M/S. KUMAR BANSAL TRADERS (P) LTD. THEY WERE NOT FOUND O N THE GIVEN ADDRESS NOR THE SALES TAX DEPARTMENT WAS ABLE TO FIND THEIR EXISTEN CE. EVEN THE PRINCIPAL OFFICER OF M/S. KUMAR BANSAL TRADERS (P) LTD. REQUIRED TOBE PRODUCED BEFORE THE AO BY THE ASSESSEE COMPANY WAS NOT PRODUCED. THE AO NOTE D FURTHER THAT THE LINKAGE OF THE PURCHASED ITEM I.E SANDAL WOOD WITH THE SAL E OF THE FINISHED PRODUCTS COULD NOT BE ASCERTAINED BECAUSE OF PURCHASED COMMO DITY AND FINISHED GOODS HAD SEPARATE IDENTITY AND WAS RESULT OF MANY PROCE SSES. THE AO ACCORDINGLY MADE ADDITION OF RS. 26,20,800/- U/S 69C OF THE ACT ON ACCOUNT OF BOGUS PURCHASES FROM M/S. KUMAR BANSAL TRADERS (P) LTD. B EING SATISFIED WITH THE SUBMISSION OF THE ASSESSEE AND THE EVIDENCE PRODUCE D IN SUPPORT, THE LD. CIT(A) HAS DELETED THE ADDITION OF RS. 26,20,800/- MADE U /S 69C OF THE ACT. THIS ACTION OF THE FIRST APPELLATE AUTHORITY HAS BEEN IMPUGNED BY THE REVENUE BEFORE THE TRIBUNAL. 5. IN SUPPORT OF THE GROUNDS THE LD. DR HA S BASICALLY PLACED RELIANCE ON THE ASSESSMENT ORDER. HE SUBMITTED THAT ONUS LIES H EAVILY ON THE CLAIMANT TO ESTABLISH GENUINENESS OF HIS CLAIM, TO WHICH ASSESS EE HAS THOROUGHLY FAILED TO. THE ASSESSEE COULD NOT PRODUCE THE PRINCIPAL OFFICE R OF M/S. KUMAR BANSAL ITA NO. 1370/DEL/08 5 TRADERS PT. LTD., THE SUPPLIER NOR HAS THE ASSESSE E ESTABLISHED THE EXISTENCE OF THE SUPPLIER . LD. DR ALSO PLACED RELIANCE ON THE D ECISIONS FOLLOWED BY THE AO. 6. LD. AR ON THE OTHER HAND TRIED TO JUSTIF Y THE FIRST APPELLATE ORDER. HE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND THE DECISIONS RELIED ON BEHALF OF THE ASSESSEE BEFORE THEM. HE SU BMITTED THAT THE ASSESSEE HAD FOLLOWED FOLLOWING STEPS AFTER MAKING THE PURCH ASES IN QUESTION :- A) PROCUREMENT OF GOODS THROUGH A COURIER/T RANSPORT AGENCY. B) PROCURING STATUTORY FORMS REQUIRED FOR C ARRYING THE GOODS TO THE DESTINATION DURING MOVEMENT. C) PAYMENTS MADE THROUGH BANKING CHANNELS. D) ENTRIES IN DAY TO DAY STOCK REGISTER MADE OF PURCHASES. E) TALLYING GOODS PHYSICALLY VERSUS AS PER BOOKS. F) SUBMISSION OF THE PURCHASES MADE TO THE AO OF EXISE & TRADE. 7. HE SUBMITTED THAT THE CLAIMED PURCHASES IN QUESTION WERE SUPPORTED BY THE FOLLOWING EVIDENCES :- I) PURCHASE BILL II) STOCK REGISTER III) TRADING ACCOUNT WITH QUANTITATIVE DETAILS IV) COPY OF BANK STATEMENT SHOWING PAYMENTS MADE TO KBTPL V) ST 38 FORMS ISSUED BY EXISE & TRADE TAX OFFICE. VI) ASSESSMENT ORDER OF EXISE & TRADE TAX OFFICE, RO HTAK ADMITTING PURCHASES AND SALES. VII) TOTAL QUANTITY OF PURCHASE / SALE DURING THE YEAR VIII) CARTAGE PAID ACCOUNT SHOWING THE PAYMENT FOR THESE PURCHASES. 8. THE LD. AR POINTED OUT THAT DURING INSPEC TION IT WAS NOTICED THAT THE AO HAD MADE OFFICE NOTE THAT DDIT (INVESTIGATION) UNIT II (1) HAD NOTICED BOGUS ITA NO. 1370/DEL/08 6 PURCHASES OF RS. 33.78 CRORES ; PURCHASES AMOUNTING TO RS. 2.21 CRORES MADE BY M/S. SURYA VINAYAK INDUSTRIES (P) LTD. AND THE BALA NCE PURCHASES OF RS. 31.57 CRORES WERE MADE BY M/S. RIM ZIM VALLEY PRODUCTS (P ) LTD. HE SUBMITTED THAT IN THE CASE OF M/S. SURYA VINAYAK INDUSTRIES P LTD. TH E DELHI BENCH OF THE TRIBUNAL IN ITA NO. 2780/D/2007 HAS DELETED THE ADDITION, A COPY THEREOF HAS BEEN MADE AVAILABLE AT PAGE NOS. 17 TO 22 OF THE PAPER BOOK ( CITATION). HE POINTED OUT FURTHER THAT THE REVENUE HAD PREFERRED APPEAL AGAIN ST THE SAID ORDER OF THE TRIBUNAL BEFORE THE HONBLE HIGH COURT OF DELHI BUT COULD NOT SUCCEED AS THE HONBLE HIGH COURT WAS PLEASED TO DISMISS THE APPEA L. A COPY OF THIS DECISION HAS BEEN MADE AVAILABLE ON RECORD. 9. LD. AR ALSO REFEREED PAGE NOS. 14 TO 41 OF THE PAPER BOOK SUBMITTED ON BEHALF OF THE ASSESSEE WITH THIS CERTIFICATE THA T THESE DOCUMENTS WERE PRODUCED BEFORE THE AUTHORITIES BELOW. THESE ARE TH E COPIES OF PURCHASE INVOICES, STOCK LEDGER AND TRADING ACCOUNT, ASSESSM ENT ORDER OF HARYANA TAXATION DEPARTMENT AND FORM NO. 38 ETC., AUDIT REP ORT FORM NO. 3CA, LEDGER OF CARTAGE INWARD, REMAND REPORT BY ITO AND REPLY OF ASSESSEE TO THE REMAND REPORT SUBMITTED BY THE AO BEFORE THE LD. CIT(A). T HE LD. AR POINTED OUT FURTHER THAT UNDER SIMILAR FACTS AND ON IDENTICAL I SSUE THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF M/S. GLOBAL BUSINESS INDIA (P) LTD. , A GROUP COMPANY HAS UPHELD THE DELETION OF SIMILAR ADDITION OF RS. 5.62 CRORES MADE BY THE LD. CIT(A). A COPY OF THIS ORDER DATED 24.8.2012 OF THE TRIBUNAL IN THE CASE OF DCIT ITA NO. 1370/DEL/08 7 VS. GLOBAL BUSINESS INDIA (P) LTD. (SUPRA) HAS BEEN MADE AVAILABLE ON THE RECORD. HE SUBMITTED THAT THE AO DID NOT PROVIDE THE COPY O F STATEMENT RECORDED BY THE INVESTIGATION WING OF THE DEPARTMENT USED ADVERSELY AGAINST THE ASSESSEE TO THE ASSESSEE NOR THE SALES TAX REPORT ETC. TO THE ASSES SEE ON WHICH THE AO PLACED RELIANCE. HE SUBMITTED FURTHER THAT THE AUTHORITIES BELOW HAVE ALSO FAILED TO APPRECIATE THAT OUT OF TOTAL PURCHASE OF SANDALWOO D OF 72,673.900 KGS ONLY GOODS OF 4000 KGS WAS PURCHASED FROM KBTPL. IN OTHE R WORDS OUT OF THE CLAIMED PURCHASES WORTH RS. 4,52,82.901/- THE AO HA S DOUBTED THE CLAIMED PURCHASES WORTH RS. 26,20,800/- PAID TO KBTPL. THE LD. AR PLACED RELIANCE ON THE FOLLOWING DECISIONS :- I. RAJESH KUMAR, ITA NO. 545/2007 (DELHI) 2. CIT VS. PRATAP SISNGH AMAR SINGH AND OTHERS 200 ITR 788 (RAJ.) 3. RAJESH P SONI VS. ACIT 100 TTJ 892 (AHMEDABAD) 4. CIT VS. KASHIRAM TEXTILE MILLS P. LTD. 284 IT R 61 (GUJ.) 5. MANOJ AGGARWAL VS. DCIT 113 ITD 377 (SB) 10. CONSIDERING THE ABOVE SUBMISSIONS WE F IND THAT THE AO HAD DOUBTED THE CLAIMED PURCHASES MADE FROM KBTPL MAINLY ON THE BASIS OF STATEMENTS OF SHRI ATUL KUMAR BANSAL, DIRECTOR OF M/S. VISHAL IR ON WORKS (P) LTD. RECORDED BY THE INVESTIGATION WING OF THE DEPARTMENT ON 30.1.20 04, WHEREIN HE HAD ADMITTED THAT KBTPL WAS ONE OF SUCH BOGUS CONCERNS WHEREIN O NLY BILLS WERE ISSUED AND NO GOODS WERE ACTUALLY TRANSFERRED AND FOR THIS HE USED TO CHARGE COMMISSION @ 0.20%. THE AO ALSO DOUBTED THE CLAIMED PURCHASES FR OM M/S. KBTPL AS THEY ITA NO. 1370/DEL/08 8 WERE NOT FOUND ON THE GIVEN ADDRESS NOR THEIR EXIST ENCE COULD BE ESTABLISHED BY THE ASSESSEE. THE LD. CIT(A) ON THE OTHER HAND WAS CONVINCED WITH THE DOCUMENTS FILED BY THE ASSESSEE IN SUPPORT OF THE C LAIMED PURCHASES AND THAT WHEN SALES HAVE BEEN ACCEPTED EXPENDITURE CORRESPON DING TO IT IS ALSO TO BE ACCEPTED. IT WAS ALSO SUBMITTED BY THE ASSESSEE THA T IT WAS NOT POSSIBLE FOR THEM TO ENSURE THE PRESENCE OF SUPPLIER ON THE GIVE N ADDRESS IN THE COMING YEARS ESPECIALLY AFTER THE COMPLETION OF THE TRANSA CTION. THE LD. CIT(A) HAS DEALT WITH THE ISSUE IN DETAIL AND HAS COME TO THE FOLLOW ING CONCLUSION AT PAGE NOS. 25 AND 26 OF THE FIRST APPELLATE ORDER : FROM THE TOTALITY OF ALL THE FACTS AND C IRCUMSTANCES, I HAVE COME TO THE CONCLUSION THAT AS FAR AS THE PURCHASES OF RAW-MATERIAL ARE CONCERNED, THEY ARE GENUINE BUT IT IS LIKELY TH AT THE BILLS IN RESPECT OF THOSE PURCHASES HAVE BEEN PURCHASED FROM THE MARKET. MY CONCLUSION IS DRAWN ON THE BASIS THAT THE PURCHA SES HAVE BEEN ENTERED INTO STOCK REGISTER. ALTHOUGH THE LINKAGE O F THESE PURCHASES WITH THE SALE IS NOT ASCERTAINABLE BECAUSE THE PURC HASES OF RAW- MATERIAL HAS UNDERGONE THE VARIOUS PROCESSES BEFORE ITS SALE AS A FINISHED PRODUCTS. THE RAW-MATERIAL AND FINISHED GO ODS HAVE DIFFERENT ENTITY AND CAN NOT HAVE DIRECT LINK. BUT ITS PURCHASE AND SALES HAVE BEEN ACCEPTED BY THE EXCISE AND TRADE TAX DEPARTMENT. THE OTHER EVIDENCES SUCH AS, THE FREIGH T RECEIPTS FOR BRINGING THE GOODS INSIDE THE FACTORY BY CITING THE VEHICLE NUMBER ETC., THEIR ENTRY IN THE STOCK REGISTER, PURCHASES AGAINST FOR NO. ST- 38 ISSUED BY EXCISE AND TRADE DEPARTMENT OF HARYANA S AND SUBSEQUENT ASSESSMENT BY EXCISE AND TRADE DEPARTMENT OF THE PURCHASES AND SALE OF THE ASSESSEE COMPANY ARE THE EVIDENCES WHICH CAN NOT BE IGNORED. THESE EVIDENCES HAVE CLEA RLY SHOWN THE AUTHENTICITY OF THE PURCHASES. IT HAS ALSO BEEN NOT ICED THAT ON THE SAME FACTS AND SAME CIRCUMSTANCES, IN THE ASSESSMEN T OF THE MAIN COMPANIES OF THE ASSESSEE WHERE HUGE PURCHASES WERE MADE, NO ADVERSE VIEW HAS BEEN TAKEN BY THE ASSESSING OFFICE R AND BY COMMISSIONER OF INCOME-TAX (APPEAL). IN THE PRESENT CASE THE PURCHASE AS COMPARED TO THE OTHER GROUP COMPANIES A RE NEGLIGIBLE. IT IS ALSO A FACT THAT THE EXISTENCE OF THE VENDOR PARTY WHICH HAS ITA NO. 1370/DEL/08 9 SOLD THE GOODS TO THE ASSESSEE COMPANY IS DOUBTFUL AND APPEARED TO HAVE BEEN ISSUED THE ACCOMMODATION ENTRIES ONLY BUT THIS FACT STANDS ALONE CAN NOT MAKE THE PURCHASE BOGUS. FURTH ERMORE, THE SALES HAVE BEEN ACCEPTED EXPENDITURE CORRESPONDING TO IT HAVE ALSO TO BE ACCEPTED. THE MOTIVE TO PROCURE THE PURCHASE BILL AGAINST THE PURCHASE MADE BY IT APPEARED TO BE THE PURCHASE FRO M THE GREY MARKET AS CONCLUDED IN OTHER GROUP COMPANIES BY THE ASSESSING OFFICER ITSELF SUCH AS RIMZIM VALLEY PRODUCTS PVT. LTD. AND M/S. SURYA VINAYAK INDUSTRIES LTD.. CONSIDERING THE TOTALITY OF ALL THE FACTS AND CIRCU MSTANCES I AM OF THE VIEW THAT THE PURCHASES MADE BY THE ASSES SEE COMPANY CANNOT BE HELD AS BOGUS. THEREFORE, APPELLANTS APP EAL ON THIS GROUND STANDS ALLOWED. 11. WE ALSO FIND THAT UNDER ALMOST SIMILAR FACTS AND IDENTICAL ISSUE THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. GLOBAL BUSINESS INDIA PVT. LTD. (SUPRA) VIDE ITS ORDER DATED 24.8.2012 HAS GIV EN THE FOLLOWING FINDING :- 7. WE HAVE HEARD RIVAL CONTENTIONS AND PE RUSED THE MATERIAL AVAILABLE ON RECORDS. AS THE FACTS EMERGE THE INFOR MATION OF INVESTIGATION WING OF THE DEPARTMENT IS HELD TO BE CLINCHING EVID ENCE BY THE ADL. CIT WHOSE DIRECTIONS WERE BINDING ON THE AO. IN OUR CON SIDERED VIEW : I. AN INFORMATION SUPPLIED BY AN AGENCY OF THE DEP ARTMENT CANNOT BE HELD AS CLINCHING EVIDENCE WITHOUT INDEPENDENT I NQUIRY AND CORROBORATION. AN INFORMATION MAY BE USEFUL FOR FUR THER INVESTIGATIONS OR CORROBORATION BUT ON ITS OWN, IT CANNOT BE HELD AS CLINCHING EVIDENCE. II. NO LIGHT HAS BEEN SHED BY AO AS TO WHAT HAPPEN ED IN THE ASSESSMENTS OF SHRI ATUL BANSAL AND HIS ACCOMMODATI ON ENTITIES. SIMILARLY STATEMENT OF DIRECTOR SHRI SANJAY JAIN ST ATING THE FACTS ABOUT VERIFICATION OF PURCHASES HAS NOT BEEN CONTRO VERTED. III. QUANTITIES OF PURCHASES AND SALES AND VALUE O F SALES HAS BEEN ACCEPTED BY AO, THUS TO THIS EXTENT NOTHING ADVERSE HAS BEEN FOUND IN THE BOOKS OF ACCOUNTS. ITA NO. 1370/DEL/08 10 IV. ALL THE PURCHASES ARE THROUGH ACCOUNT PAYEE CHE QUES, TRANSPORTATION VOUCHERS TO AGARTALLA FACTORY, LIKEW ISE ALL THE SALES ARE ACCEPTED BY AO, SUPPORTED BY INDIAN AIRLINES TR ANSPORTATION VOUCHERS. PURCHASES ARE SUPPORTED BY FORM ST-38 ISS UED BY EXCISE AND TRADE DEPARTMENT. NOTHING ADVERSE HAS BEEN FOUN D IN THIS BEHALF. V. AO HAS RELIED ON THE ITAT JUDGMENT IN THE CASE OF VIJAY PROTEINS CASE (SUPRA) WHICH IN OUR VIEW IS DISTINGU ISHABLE AS IN THAT CASE THERE WERE NO TRANSPORT VOUCHERS AND SOME TRAN SPORTERS DENIED HAVING TRANSPORTED SUCH GOODS. THESE ADVERSE FACTS ARE CONSPICUOUSLY MISSING IN THIS CASE. IN OUR VIEW HON BLE GUJARAT HIGH COURT JUDGMENT IN THE CASE OF ADINATH INDUSTRI ES AND P & H HIGH COURT IN THE CASE OF LEADER VALVES (SUPRA) HEL PS ASSESEES CASE. VI. AO HAS ONLY CREATED A SUSPICION THAT PURCHASE RATES MAY HAVE BEEN INFLATED AS IT WAS POSSIBLE FOR ASSESSEE. IN O UR CONSIDERED VIEW IT AMOUNTS TO A SURMISE. IN ORDER TO BRING HOM E HIS POINT, SOME INSTANCE OF SUCH INFLATION SHOULD HAVE BEEN PO INTED BY AO. SUSPICIONS HOWEVER STRONG CANNOT PARTAKE THE CHARAC TER OF PROOF. VII. EVEN IF PART REJECTION OF ASSESSES BOOKS IS UPH ELD THE CONSEQUENT ESTIMATE SHOULD BE JUST AND REASONABLE. IN THE ABSENCE OF ANY ALLEGATION ABOUT INSUFFICIENCY OF TRADING RE SULTS SUCH ADDITION HAS BEEN RIGHTLY DELETED BY CIT(A), WE UPHOLD HIS O RDER ON THIS ISSUE. THIS GROUND OF THE REVENUE IS DISMISSED. 12. RESPECTFULLY FOLLOWING THE ABOVE CITED DECISION OF THE TRIBUNAL IN THE CASE OF DCIT VS. GLOBAL BUSINESS INDIA PVT. LTD. (S UPRA) ON AN IDENTICAL ISSUE UNDER ALMOST SIMILAR FACTS, WE DO NOT FIND INFIRMIT Y IN THE FIRST APPELLATE ORDER OF THE PRESENT CASE IN THIS REGARD AND DECIDE THE ISSU E IN FAVOUR OF THE ASSESSEE REGARDING THE GENUINENESS OF THE CLAIMED TRANSACTIO NS I.E PURCHASES MADE FROM KBTPL. THE FIRST APPELLATE ORDER IN THIS REGARD IS THUS UPHELD. GROUNDS ARE ACCORDINGLY REJECTED. ITA NO. 1370/DEL/08 11 13. IN THE RESULT APPEAL IS PARTLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT O N 6.2.2013. SD/- SD/- (J.S. REDDY) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 6.2.2013 VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR, ITAT