ITO, WD-19(2)(2), MUMBAI V. KARSAN NANDU, MUMBAI

ITA 2651/MUM/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1696 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 11-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R KIRTANE
• Assessee Lawyers: KEYURI DESAI
• Keywords: Bogus purchase; Unexplained expenditure; Principle of natural justice; Accommodation entries
• Section: 69C; 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO. 2651/MUM/2016 : (A.Y : 2011-12) ITO, WARD-19(2)(2), MUMBAI (APPELLANT) VS. SHRI KARSAN NANDU B-52, PANALAL TERRACE, LAMINGTON ROAD, MUMBAI 400 007 (RESPONDENT) PAN : AABPS6203J CO NO. 197/MUM/2016 (ARISING OUT OF ITA NO.2651/MUM/2016) : (A.Y : 2011-12) SHRI KARSAN NANDU B-52, PANALAL TERRACE, LAMINGTON ROAD, MUMBAI 400 007 (CROSS OBJECTOR) PAN : AABPS6203J VS. ITO, WARD-19(2)(2), MUMBAI (APPELLANT IN APPEAL) ASSESSEE BY : MS. KEYURI DESAI REVENUE BY : SHRI S.R. KIRTANE DATE OF HEARING : 29/11/2016 DATE OF PRONOUNCEMENT : 30/11/2016 O R D E R THE CAPTIONED APPEAL BY THE REVENUE AND CROSS-OBJEC TION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF CIT(A)-3 0, MUMBAI DATED 8.1.2016, PERTAINING TO THE ASSESSMENT YEAR 2011-12 , WHICH IN TURN HAS ARISEN FROM THE ORDER DATED 25.3.2014 PASSED BY THE ASSESSING OFFICER, MUMBAI UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2 SHRI KARSAN NANDU ITA NO. 2651/MUM/2016 & CO 197/MUM/2016 2. THE CAPTIONED APPEAL AND CROSS OBJECTION ARISES FROM THE ADDITION MADE BY ASSESSING OFFICER OF RS.37,45,965/ - AS UNEXPLAINED EXPENDITURE U/S 69C OF THE ACT. 3. IN ORDER TO APPRECIATE THE CONTROVERSY IN THE CA PTIONED APPEAL AND CROSS-OBJECTION, THE FOLLOWING DISCUSSION IS RE LEVANT. THE ASSESSEE IS AN INDIVIDUAL WHO IS ENGAGED IN THE BUSINESS OF WHOLESALE TRADING IN READYMADE GARMENTS IN A PROPRIETORSHIP CONCERN. FO R THE ASSESSMENT YEAR 2011-12, ASSESSEE FILED A RETURN OF INCOME DEC LARING A TOTAL INCOME OF RS.11,81,130/-, WHICH WAS SUBJECT TO A SCRUTINY ASSESSMENT. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERVE D THAT AN INFORMATION WAS RECEIVED BY HIM FROM DGIT(INV.), MU MBAI THAT THE ASSESSEE HAS TAKEN ACCOMMODATION ENTRIES FROM CERTA IN PURCHASE PARTIES. IN THIS CONTEXT, THE ASSESSING OFFICER HA S REFERRED TO 7 SUCH PARTIES TABULATED IN PARA 6 OF THE ASSESSMENT ORDER FROM WHOM THE TOTAL PURCHASES EFFECTED AMOUNTED TO RS.37,45,965/- . THE ASSESSING OFFICER HAS ALSO OBSERVED THAT ENQUIRIES WERE MADE BY HIM BY ISSUING NOTICES U/S 133(6) OF THE ACT TO SUCH PARTIES WHICH REVEALED THAT SUCH PARTIES WERE NOT AVAILABLE AT THE GIVEN ADDRESSES S INCE THE NOTICES WERE RETURNED BY THE POSTAL AUTHORITIES WITH THE REMARKS NOT KNOWN, LEFT, UNCLAIMED, ETC. IN THIS BACKGROUND, THE ASSESSEE WAS SHOW CAUSED AS TO WHY THE PURCHASES AMOUNTING TO RS.37,45,965/- DE BITED TO THE PROFIT & LOSS ACCOUNT SHOULD NOT BE TREATED AS BOGUS BY IN VOKING SEC. 69C OF THE ACT. IN RESPONSE, ASSESSEE FURNISHED A DETAILE D EXPLANATION CONTESTING THE STAND OF THE ASSESSING OFFICER AND S UCH EXPLANATION HAS BEEN REPRODUCED BY THE ASSESSING OFFICER IN PARA 7 OF HIS ORDER. IN 3 SHRI KARSAN NANDU ITA NO. 2651/MUM/2016 & CO 197/MUM/2016 PARTICULAR, ASSESSEE ALSO ASSERTED THAT THERE WAS N O JUSTIFICATION FOR INVOKING SEC. 69C OF THE ACT IN THE PRESENT CASE AS ASSESSEE HAD EXPLAINED THE SOURCE OF EXPENDITURE AND, THEREFORE, SEC. 69C OF THE ACT WAS INAPPLICABLE. THE ASSESSING OFFICER WAS NOT SA TISFIED WITH THE SUBMISSIONS PUT FORTH BY THE ASSESSEE. THE ASSESSI NG OFFICER NOTED THAT THE NOTICES ISSUED U/S 133(6) OF THE ACT TO THE PAR TIES WERE RETURNED UNSERVED; THAT THE INVESTIGATIONS CONDUCTED BY THE DEPARTMENT LEAD TO DOUBT REGARDING THE GENUINENESS OF PURCHASES; THAT ASSESSEE WOULD HAVE MADE GENUINE PURCHASES FROM UNDISCLOSED SOURCE S IN CASH AND TO REGULARISE THE ACCOUNT BOOKS HAD OBTAINED ACCOMMODA TION ENTRIES FROM THE SAID 7 PARTIES; AND, THAT PAYMENTS MADE TO THE SUPPLIERS BY ACCOUNT PAYEE CHEQUES WAS NOT SACROSANCT TO ESTABLI SH GENUINENESS OF THE EXPENDITURE. FOR ALL THE ABOVE REASONS, THE AS SESSING OFFICER TREATED THE EXPENDITURE ON PURCHASES OF RS. 37,45,9 65/- AS UNEXPLAINED EXPENDITURE U/S 69C OF THE ACT AND ADDED THE SAME T O THE RETURNED INCOME. 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) ASSAILING THE ORDER OF ASSESSING OFFICER ON FACTS A ND IN LAW. THE ASSESSEE EXPLAINED BEFORE THE CIT(A) THAT COMPLETE DETAILS REGARDING THE PURCHASES MADE FROM 7 PARTIES, NAMELY, INVOICES OF PURCHASES MADE, PAYMENTS MADE TO THE PARTIES BY ACCOUNT PAYEE CHEQUES, BANK STATEMENT EVIDENCING THE PAYMENTS, COPY OF ACCOUNT OF EACH PARTY, DISPOSAL OF ITEMS PURCHASED FROM THE SAID PARTIES A ND THE SUBSEQUENT SALES MADE TO VARIOUS PARTIES, ETC. WERE FURNISHED BEFORE THE ASSESSING OFFICER. THE ASSESSEE ALSO POINTED OUT THAT THE ASS ESSING OFFICER HAD MERELY PROCEEDED ON THE INFORMATION RECEIVED FROM T HE SALES TAX 4 SHRI KARSAN NANDU ITA NO. 2651/MUM/2016 & CO 197/MUM/2016 DEPARTMENT OF THE STATE OF MAHARASHTRA WHEREAS THE MATERIAL FURNISHED BY THE ASSESSEE HAS BEEN MERELY DISBEL IEVED. THE ASSESSEE ALSO ASSERTED BEFORE THE CIT(A) THAT THE ASSESSING OFFICER DID NOT PROVIDE ANY OPPORTUNITY TO THE ASSESSEE TO CROSS-EX AMINE THE PARTIES REGARDING THE SALES MADE TO ASSESSEE. FOR ALL THE ABOVE REASONS, THE ADDITION MADE BY ASSESSING OFFICER WAS SOUGHT TO BE ASSAILED. THE CIT(A) NOTED THAT IN THE PRESENT CASE THE ASSESSING OFFICER MADE INDEPENDENT INVESTIGATIONS, APART FROM THOSE CONDUC TED BY THE MAHARASHTRA SALES TAX DEPARTMENT, WHICH SHOWED THAT THE 7 PARTIES IN QUESTION AND THE TRANSACTIONS ENTERED WITH THEM WER E NOT GENUINE. THE CIT(A) ALSO REJECTED THE PLEA OF ASSESSEE THAT THE IMPUGNED ADDITION COULD NOT BE MADE IN THE ABSENCE OF ACCOUN T BOOKS NOT HAVING BEEN REJECTED BY THE ASSESSING OFFICER U/S 145(3) O F THE ACT. EVEN WITH REGARD TO DENIAL OF OPPORTUNITY TO CROSS-EXAMINE TH E PARTIES, CIT(A) FOUND NO FAULT WITH THE ACTION OF ASSESSING OFFICER ON THE GROUND THAT INSISTENCE ON CROSS-EXAMINING THE WITNESS IS NOT A GENERAL PROPOSITION OF LAW AND, THEREFORE, THE ASSESSING OFFICER WAS CO MPETENT TO RELY ON THE EVIDENCE AGAINST THE ASSESSEE EVEN IF OPPORTUNI TY TO CROSS-EXAMINE THE WITNESS WAS NOT ALLOWED. HOWEVER, THE CIT(A) T OOK NOTE OF THE ARGUMENT OF ASSESSEE THAT WHEN THE SALES HAD NOT BE EN DISTURBED BY THE ASSESSING OFFICER, THEN THE PURCHASES COULD NOT BE TREATED AS BOGUS BECAUSE WITHOUT PURCHASES, THERE IS POSSIBILITY O F EFFECTING THE SALES. THE CIT(A) FOUND SOME FORCE IN THE SAID PLEA AND HE PROCEEDED TO SCALE DOWN THE ADDITION TO THE EXTENT OF PROFIT ELEMENT E MBEDDED IN SUCH BOGUS PURCHASES. ACCORDINGLY, CIT(A) APPLIED THE P ROFIT RATE OF 12.5% ON THE BOGUS PURCHASES IN ORDER TO RETAIN THE ADDIT ION AND THE BALANCE OF THE ADDITION WAS DIRECTED TO BE DELETED. WITH T HE PARTIAL RELIEF 5 SHRI KARSAN NANDU ITA NO. 2651/MUM/2016 & CO 197/MUM/2016 ALLOWED BY CIT(A), ASSESSEE IS NOT SATISFIED AND IS IN APPEAL BEFORE THE TRIBUNAL CONTENDING THAT THE ENTIRE ADDITION WAS LI ABLE TO BE DELETED. ON THE OTHER HAND, REVENUE HAS PREFERRED AN APPEAL CHALLENGING THE DECISION OF CIT(A) IN SUSTAINING THE ADDITION TO TH E EXTENT OF PROFIT ELEMENT IN THE BOGUS PURCHASES AS AGAINST THE ACTIO N OF ASSESSING OFFICER IN DISALLOWING THE ENTIRE AMOUNT OF PURCHAS ES. SINCE THE CROSS- GROUNDS ARISE FROM A COMMON ADDITION, THEY HAVE BEE N TAKEN UP TOGETHER. 5. BEFORE ME, THE FIRST AND THE FOREMOST PLEA OF TH E ASSESSEE IS THAT THE INSTANT CASE DOES NOT FALL WITHIN THE SCOPE OF SEC. 69C OF THE ACT INASMUCH AS THE ASSESSEE HAD DULY EXPLAINED THE SOU RCE OF EFFECTING PAYMENTS FOR THE PURCHASES IN QUESTION. WITHOUT PR EJUDICE TO THE SAID PLEA, IT IS CONTENDED BY THE ASSESSEE THAT THE NECE SSARY DETAILS TO JUSTIFY THE PURCHASES OF RS.37,45,965/- FROM THE 7 PARTIES HAVE BEEN FURNISHED BY THE ASSESSEE AND THUS THE ONUS CAST ON THE ASSES SEE STOOD DISCHARGED. IT HAS ALSO BEEN VEHEMENTLY ARGUED THA T THE ASSESSEE HAD SPECIFICALLY ASKED FOR CROSS-EXAMINATION OF THE WIT NESSES, WHICH HAS BEEN COMPLETELY DENIED AND, THEREFORE, THERE IS A V IOLATION OF PRINCIPLES OF NATURAL JUSTICE AND ON THIS ASPECT ITSELF, THE A SSESSMENT DESERVES TO BE SET-ASIDE. IN SUPPORT, RELIANCE HAS BEEN PLACED ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF ANDAMAN TIMBER INDUSTRIES, (2015) 127 DTR (SC) 241 . 6. ON THE OTHER HAND, THE LD. DR APPEARING FOR THE REVENUE HAS PRIMARILY SUPPORTED THE STAND OF ASSESSING OFFICER BY PLACING RELIANCE ON THE SAME. THE REASONING TAKEN BY THE ASSESSING OFF ICER HAS ALREADY 6 SHRI KARSAN NANDU ITA NO. 2651/MUM/2016 & CO 197/MUM/2016 BEEN ADVERTED TO BY ME IN THE EARLIER PARAS AND, TH EREFORE, IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 7. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSION S. IN THE INSTANT CASE, THE ASSESSING OFFICER HAS NOTED THAT CERTAIN INFORMATION HAS BEEN RECEIVED FROM THE DGIT (INV.), MUMBAI THAT ASSESSEE HAS TAKEN ACCOMMODATION ENTRIES FROM 7 PARTIES ENUMERATED IN PARA 6 OF THE ASSESSMENT ORDER. IT IS ALSO THE CASE OF REVENUE T HAT THE ASSESSING OFFICER HAS MADE INDEPENDENT ENQUIRIES ALSO BY ISSU ING NOTICES U/S 133(6) OF THE ACT TO THE 7 PARTIES WHICH REVEAL THA T THE NOTICES WERE RETURNED UNSERVED BY THE POSTAL AUTHORITIES WITH RE MARKS NOT KNOWN, LEFT, UNCLAIMED, ETC. THE AFORESAID TWO ASPECT S HAVE FORMED THE BASIS FOR THE ASSESSING OFFICER TO TREAT THE PURCHASES OF RS.37,45,965/- FROM THE SAID 7 PARTIES AS BOGUS TRANSACTIONS. 8. ON THE CONTRARY, ASSESSEE ASSERTED BEFORE THE AS SESSING OFFICER THAT HE HAS EFFECTED PURCHASE OF GOODS FROM THE SAI D PARTIES AND FURTHER RESOLD IT TO VARIOUS PARTIES AND THAT WITHO UT EFFECTING SUCH PURCHASES, SALES WERE NOT POSSIBLE. THE ASSESSEE F URNISHED COPIES OF PURCHASE BILLS, EVIDENCE OF HAVING MADE PAYMENTS BY ACCOUNT PAYEE CHEQUES, COPIES OF BANK STATEMENTS, ETC. ASSESSEE ALSO POINTED OUT THAT THE BILLS RAISED BY THE PARTIES SHOWED THAT TH EY HAVE COLLECTED THE APPLICABLE SALES TAX/VAT ON SUCH PURCHASES. MOST I MPORTANTLY, ASSESSEE POINTED OUT TO THE ASSESSING OFFICER THAT IF ANY OF THE DEPOSITIONS MADE BY THE SAID 7 PARTIES IS TO BE USE D AGAINST HIM, COPIES OF THE SAME BE FURNISHED, SO THAT THE ASSESSEE CAN AVAIL THE OPPORTUNITY OF CROSS-EXAMINING EACH OF THEM. ALL THESE SUBMISS IONS BY THE ASSESSEE 7 SHRI KARSAN NANDU ITA NO. 2651/MUM/2016 & CO 197/MUM/2016 HAVE BEEN SET TO NAUGHT BY THE ASSESSING OFFICER BY MERELY REFERRING TO THE ASPECT OF INFORMATION HAVING BEEN RECEIVED FROM DGIT (INV.), MUMBAI AND THE NON-SERVICE OF NOTICES ISSUED U/S 13 3(6) OF THE ACT TO THE PARTIES. I HAVE CAREFULLY PERUSED THE ASSESSME NT ORDER AND FIND THAT OTHER THAN THE GENERALISED OBSERVATION ABOUT INFORM ATION HAVING BEEN RECEIVED FROM DGIT (INV.), MUMBAI, THERE IS NO REFE RENCE TO ANY SPECIFIC MATERIAL OR DETAILS IN THIS REGARD. IT IS NOT EMER GING FROM THE ASSESSMENT ORDER AS TO WHETHER THE INFORMATION FROM THE DGIT (INV.), MUMBAI, BEING REFERRED TO BY THE ASSESSING OFFICER, IS IN THE FORM OF ANY DEPOSITIONS BY THE SUPPLIERS, ETC. IN THIS CONTEXT , THE PLEA OF ASSESSEE TO SEEK THE ADVERSE MATERIAL, WHICH THE ASSESSING OFFI CER HAS RELIED UPON, BECOMES IMPORTANT. THE ENTIRE FACTUAL MATRIX BRING S OUT THAT LEAVE ALONE CONFRONTING THE ASSESSEE WITH THE SPECIFIC MA TERIAL, THE ASSESSMENT ORDER ITSELF DOES NOT RECORD ANY SPECIFI CS ABOUT THE MATERIAL ON WHICH THE RELIANCE HAS BEEN PLACED BY T HE ASSESSING OFFICER. THEREFORE, ON FACTS, SUCH AN ADDITION IS SUSCEPTIBL E TO DELETION. 8.1 IN THIS CASE, ANOTHER ASPECT IS THE NON-SERV ICE OF NOTICES ISSUED UNDER SECTION 133(6) OF THE ACT. NOTABLY, AFTER TH E ASSESSING OFFICER FOUND THAT THE NOTICES ISSUED UNDER SECTION 133(6) OF THE ACT HAVE BEEN RETURNED UNSERVED, NO ATTEMPT WAS MADE TO SHIF T THE ONUS ON THE ASSESSEE TO PRODUCE SUCH PARTIES. THEREFORE, IT IS NOT A CASE WHERE THE ASSESSEE HAS FAILED TO PRODUCE HIS WITNESS, BUT IT IS A CASE WHERE THE ATTEMPT OF THE ASSESSING OFFICER TO PROCURE ATTENDA NCE OF A WITNESS HAS NOT FRUCTIFIED. IN FACT, NON-SERVICE OF NOTICES IS SUED U/S 133(6) OF THE ACT BY ITSELF CANNOT BE A CONCLUSIVE PROOF THAT TR ANSACTIONS WITH THE PARTIES ARE BOGUS BECAUSE THERE WAS ENOUGH MATERIAL BEFORE THE 8 SHRI KARSAN NANDU ITA NO. 2651/MUM/2016 & CO 197/MUM/2016 ASSESSING OFFICER TO SHOW THAT PAYMENTS HAVE BEEN M ADE TO THE SAID PARTIES THROUGH BANKING CHANNELS. IT REQUIRED FURT HER COLLECTION OF EVIDENCE BY THE ASSESSING OFFICER TO PROVE THE BOGU S NATURE OF SUCH TRANSACTIONS. IN FACT, THE HON'BLE BOMBAY HIGH COU RT IN THE CASE OF NIKUNJ EXIM ENTERPRISES (P.) LTD., 372 ITR 619 (BOM ) HAS OBSERVED THAT MERELY BECAUSE SUPPLIERS DID NOT APPEAR BEFORE THE ASSESSING OFFICER, IT COULD NOT BE CONCLUDED THAT THE PURCHASES WERE NON- GENUINE WHEN ASSESSEE HAD DISCHARGED HIS ONUS BY SHOWING COPIES OF BANK STATEMENT EVIDENCING PAYMENTS THROUGH ACCOUNT PAYEE CHEQUES T O SUPPLIERS, STOCK RECONCILIATION STATEMENT, ETC. IN THE PRESEN T CASE TOO, THE ASSESSEE HAS POINTED TO THE ASSESSING OFFICER IN IT S COMMUNICATION DATED 3.3.2014, COPY OF WHICH IS PLACED AT PG. 32 O F THE PAPER BOOK, THAT IT WAS MAINTAINING DAY-TO-DAY STOCK RECORD WHE REIN ALL PURCHASES ARE ENTERED AS INWARD AND SALES ARE RECORDED AS OUTWARD. ASSESSEE HAD ENCLOSED COPIES OF ACCOUNT OF THE SAID PARTIES APPEARING IN HIS ACCOUNT BOOKS, COPIES OF PURCHASE INVOICES, COPIES OF BANK STATEMENT FOR PAYMENT TO THE PARTIES, ETC. AT THE TIME OF HE ARING, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE HAS ALSO REFERRED T O THE PAPER BOOK, WHEREIN THE RELEVANT DOCUMENTS HAVE ALSO BEEN PLACE D. UNDER THESE CIRCUMSTANCES, HAVING REGARD TO THE MATERIAL ON REC ORD, IT IS NOT POSSIBLE TO UPHOLD THE CHARGE OF ASSESSING OFFICER THAT THE PURCHASES FROM THE 7 PARTIES IN QUESTION ARE BOGUS. 9. BE THAT AS IT MAY, INVOKING OF SEC. 69C OF THE A CT IN THE PRESENT CASE IS ALSO SUSPECT. SEC. 69C OF THE ACT PRESCRIB ES THAT WHERE IN ANY FINANCIAL YEAR AN ASSESSEE HAS INCURRED ANY EXPENDI TURE AND HE OFFERS NO EXPLANATION ABOUT THE SOURCE OF SUCH EXPENDITURE OR PART THEREOF, OR 9 SHRI KARSAN NANDU ITA NO. 2651/MUM/2016 & CO 197/MUM/2016 THE EXPLANATION OFFERED BY HIM IS NOT FOUND TO BE S ATISFACTORY BY THE ASSESSING OFFICER, THEN THE AMOUNT COVERED BY SUCH EXPENDITURE OR PART THEREOF MAY BE DEEMED TO BE THE INCOME OF THE ASSES SEE FOR SUCH FINANCIAL YEAR. IN THE CONTEXT OF THE APPLICATION OF SEC. 69C OF THE ACT WHAT IS OF IMPORTANCE IS THAT EITHER THERE IS NO EX PLANATION ABOUT THE SOURCE OF SUCH EXPENDITURE OR THAT THE EXPLANATION OFFERED IS NOT FOUND SATISFACTORY. THE UNDERLYING EMPHASIS IS ON THE EXPLANATION IN RELATION TO THE SOURCE OF SUCH EXPENDITURE . IN THE PRESENT CASE, THE ASSESSING OFFICER HAS INVOKED SEC. 69C OF THE ACT T O TREAT THE EXPENDITURE ON PURCHASES OF RS. 37,45,965/- AS UNEX PLAINED. SO HOWEVER, THE ASSESSEE HAS DEMONSTRATED THAT THE PAY MENTS FOR SUCH PURCHASES HAVE BEEN MADE THROUGH ACCOUNT PAYEE CHEQ UES FOR WHICH THERE IS NO REPUDIATION BY THE ASSESSING OFFICER TH EREBY IMPLYING THAT THE SOURCE OF EXPENDITURE STANDS EXPLAINED. IN FAC T, THE CASE OF ASSESSING OFFICER IS THAT THE PURCHASE TRANSACTIONS ARE ONLY ACCOMMODATION ENTRIES AND NOT REALLY PURCHASES, THEREBY IMPLYING THAT AS PER THE ASSESSING OFFICER ASSESSEE HAS NOT INCUR RED SUCH EXPENDITURE. TO HOLD THE TRANSACTIONS AS MERE ACCOMMODATION ENT RIES AND NOT REAL PURCHASES IS QUITE DIFFERENT FROM SAYING THAT THE S OURCES OF EXPENDITURE FOR THE PURCHASES FROM THE 7 PARTIES IN QUESTION HA VE NOT BEEN EXPLAINED IN THE CONTEXT OF SEC. 69C OF THE ACT. T HEREFORE, IN MY VIEW, INVOKING OF SEC. 69C OF THE ACT IN THE PRESENT CASE TO TREAT THE PURCHASES OF RS.37,45,965/- STATED TO HAVE BEEN MAD E FROM THE 7 PARTIES IN QUESTION IS ON A WRONG FOOTING. THUS, O N THIS ASPECT ALSO, ASSESSEE DESERVES TO SUCCEED. 10 SHRI KARSAN NANDU ITA NO. 2651/MUM/2016 & CO 197/MUM/2016 10. IN THE RESULT, IN MY VIEW, ORDER OF CIT(A) DESE RVES TO BE SET-ASIDE AND ASSESSING OFFICER IS DIRECTED TO DELETE THE ADD ITION OF RS.37,45,965/-. 11. RESULTANTLY, WHEREAS THE CROSS-OBJECTION OF ASS ESSEE IS ALLOWED, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH NOVEMBER, 2016. SD/- (G.S. PANNU) ACCOUNTANT MEMBER MUMBAI, DATE : 30TH NOVEMBER, 2016 * SSL * COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, SMC BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI