TIRUPATI ENTERPRISES, MUMBAI V. ITO 12(3)2, MUMBAI

ITA 3791/MUM/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62300 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 11-04-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 10-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISH KANOJIA
• Keywords: Additional evidence
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E, MUMBAI BEFORE SHRI P.M.JAGTAP (A.M) & SHRI N.V.VASUDEVAN( J.M) ITA NO. 3791/MUM/11(A.Y.2007-08) TIRUPATI ENTERPRISES, 79, MITTAL CHAMBERS, NARIMAN POINT, MUMBAI 400 021. PAN:AAAFT 5121B (APPELLANT) VS. THE INCOME TAX OFFICER 13(3)(2) MUMBAI. (RESPONDENT) APPELLANT BY : SHRI VIJAY MEHTA RESPONDENT BY : SHRI MANISH KANOJIA DATE OF HEARING : 11/04/2012 DATE OF PRONOUNCEMENT : 18/04/2012 ORDER PER N.V.VASUDEVAN, J.M THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 15/3/2011 OF CIT(A)-23, MUMBAI RELATING TO THE ASSESSMENT YEA R 2007-08. THE GROUND OF APPEAL RAISED BY THE ASSESSEE READS AS UNDER: THE LEARNED CIT(APPEALS) ERRED IN CONFIRMING THE A DDITION ON ACCOUNT OF PURCHASES OF RS. 38,59,902/- DURING THE YEAR ON THE GROUND THAT THE GENUINENESS OF THE TRANSACTIONS HAS NOT BEEN PR OVED. 2. THE ASSESSEE IS A PARTNERSHIP FIRM. IT IS ENGAG ED IN THE BUSINESS OF TRADING IN TEXTILE CLOTH FABRIC. FOR A.Y 2007-08 A SSESSEE FILED A RETURN OF INCOME DECLARING INCOME OF RS.9,24,510/-. THE ASSE SSEE HAD SHOWN TOTAL PURCHASES OF CLOTH AT RS.43,64,449/- AND SALE OF TH E QUANTITY PURCHASED AT RS. 44,43,073/-. THE DETAILS OF PURCHASES AND SALE S ARE GIVEN AS ANNEXURE TO THIS ORDER. A LOOK AT THE ANNEXURE WILL SHOW TH AT EACH OF THE ITEMS OF ITA NO. 3791/MUM/11(A.Y.2007-08) 2 QUANTITY PURCHASED DURING THE PREVIOUS YEAR AND ITS CORRESPONDING SALE CAN BE CLEARLY IDENTIFIED. THE AO WANTED TO VERIFY THE PURCHASES MADE BY THE ASSESSEE FROM M/S. TOPWORTH TRADERS PVT. LTD.(TTPL) AND M/S.NATKHAT INVESTTRADE PVT. LTD.(NIPL). NOTICES UNDER SECTION 133(6)OF THE INCOME TAX ACT, 1961 (THE ACT) WERE ISSUED TO THE PARTIES CAL LING UPON THEM TO CONFIRM THE GENUINENESS OF THE TRANSACTIONS. THE INSPECTOR OF INCOME TAX WENT TO SERVE THE NOTICES TO BOTH THE AFORESAID PARTIES, WH O WERE BOTH HAVING ADDRESSES AT THE SAME PREMISES VIZ., FLAT NO.2B/207 , VRINDAVAN CHS LTD., POONAM NAGAR, MAHAKALI CAVES ROAD, ANDHERI (E), MUM BAI - 93. THE INSPECTOR REPORTED TO THE AO THAT THE FLAT IN QUEST ION WAS OWNED BY MR. PRADEEP GUPTA AND HE HAD INFORMED THE INSPECTOR THA T THERE WAS NO COMPANY BY NAME M/S. M/S. TOPWORTH TRADERS PVT. LTD .(TTPL) AND M/S.NATKHAT INVESTTRADE PVT. LTD.(NIPL) AT THE SAID ADDRESS. THEREAFTER THE INSPECTOR OF INCOME TAX WENT TO SERVE THE NOTICE UN DER SECTION 133(6) OF THE ACT TO TTPL AT ANOTHER ADDRESS VIZ., 304, NEW INDIA INDUSTRIAL ESTATE, MAHAKALI CAVES ROAD, ANDHERI (EAST) AND FOUND THAT THE SAID PREMISES WAS CLOSED AND THERE WAS NO NAME PLATE OF TTPL ON THE D OOR OF THE SAID PREMISES. ACCORDING TO THE INSPECTOR THE LOCAL ENQ UIRIES REVEALED THAT NO COMPANY NAMED TTPL OPERATED FROM THE SAID PREMISES. SIMILARLY THE INSPECTOR OF INCOME TAX ALSO WENT TO SERVICE NOTICE UNDER SECTION 133(6) OF THE ACT TO NIPL AT ANOTHER ADDRESS NAMELY PLOT NO.5 6, GSL HOUSE, ROAD NO.17, MIDC, ANDHERI (EAST). THE SAID PREMISES WA S OCCUPIED BY M/S. RANBAXY GROUP AND OTHERS AND ON LOCAL ENQUIRY THE I NSPECTOR WAS INFORMED THAT NO SUCH COMPANY EXISTED AT THE AFORESAID ADDRE SS. 3. THE ABOVE FACTS WERE CONFRONTED TO THE ASSESSEE BY THE AO AND THE ASSESSEE WAS CALLED UPON TO FILE SUPPORTING DOCUMEN TARY EVIDENCE TO PROVE THAT THESE PARTIES ARE GENUINE AND THAT THE PURCHAS ES MADE FROM THEM ARE ALSO GENUINE. IN REPLY ASSESSEE SUBMITTED ACCOUNT CONFIRMATION AND ACKNOWLEDGEMENT OF IT RETURNS FOR A.Y 2007-08 OF TH E AFORESAID PARTIES AND ITA NO. 3791/MUM/11(A.Y.2007-08) 3 SUBMITTED THAT THE PURCHASES ARE GENUINE. THE AO N OTICED THAT THE DESIGNATION OF THE PERSON SIGNING ON BEHALF OF TTPL AND NIPL WAS NOT FOUND. WHEN THE ASSESSEE WAS CONFRONTED ON THE ABOVE, A BO ARD RESOLUTION OF TTPL WAS FILED. THE BOARD RESOLUTION WAS IN RESPECT TO TTPL AND HAD AUTHORIZED ONE MR. MAHESH LAD TO APPEAR BEFORE THE INCOME TAX AND OTHER AUTHORITIES. HOWEVER, IT WAS SIGNED AS TRUE COPY BY AND ON BEHAL F OF NIPL. FROM ALL THE ABOVE CIRCUMSTANCES THE AO WAS AT THE VIEW THAT BOT H THE AFORESAID PARTIES DID NOT EXIST AND THAT THE TRANSACTIONS OF PURCHASE S WERE NOT GENUINE. THE A.O, THEREFORE, ADDED A SUM OF RS. 38,59,092/- (RS. 5,19,628/- PURCHASES FROM NIPL AND RS. 33,39,464/- PURCHASES FROM TTPL) AS UNPROVED PURCHASES. 4. BEFORE CIT(A) THE ASSESSEE FILED COPIES OF SALES BILL-CUM- CHALLAN, COPY OF PAN CARD, AUDITED ACCOUNTS AS ON 31/3/2007 OF TT PL & NIPL, BESIDES COPY OF MEMORANDUM OF ARTICLES OF ASSOCIATION, COPY OF ANNUAL RETURN, FORM NO.18 AND PAYMENT VOUCHER OF THE ASSESSEE FOR PAYME NT OF TRANSPORTATION CHARGES ETC. BEFORE CIT(A) THE ASSESSEE SUBMITTED THAT THE ORDER OF ASSESSMENT WAS PASSED ON 31/12/09 AND THE NOTICE UN DER SECTION 133(6) OF THE ACT WAS ISSUED ONLY ON 15/12/2009 AND BECAUSE O F THE SHORT DURATION OF TIME THE ASSESSEE COULD NOT MAKE PROPER COMPLIANCE BEFORE THE AO AND ACCORDINGLY REQUESTED THAT THE EVIDENCE FILED BEFOR E THE CIT(A) MAY BE ACCEPTED AS ADDITIONAL EVIDENCE. THE CIT(A) WAS SA TISFIED WITH THE EXPLANATION AND ADMITTED THE ADDITIONAL EVIDENCE FO R CONSIDERATION IN THE INTEREST OF JUSTICE. 5. THE ADDITIONAL EVIDENCE WAS DULY CONFRONTED TO THE AO. IN THE REMAND REPORT THE AO SUBMITTED THAT THE ASSESSEE HAD FURNI SHED ANOTHER ADDRESS OF NIPL AND TTPL AT POWAI, MUMBAI. WHEN THE INSPECTO R SOUGHT TO SERVE THE NOTICE AT THE POWAI ADDRESS OF NIPL HE FOUND THAT I T WAS A CHAWL AND ENQUIRY WITH NEIGHBOURING RESIDENCE, SHOPKEEPERS REVEALED THAT THEY HAD NOT HEARD ITA NO. 3791/MUM/11(A.Y.2007-08) 4 ABOUT EXISTENCE SUCH COMPANIES. THE OWNER OF THE CH AWL ALSO CONFIRMED THAT THESE COMPANIES HAD NEVER EXISTED IN THE BUILDING. AS FAR AS TTPL IS CONCERNED, THE INSPECTOR GAVE SIMILAR REPORT AS WAS GIVEN IN THE CASE OF NIPL. THE ASSESSING OFFICER THUS, REPORTED IN HIS CONCLUS ION THAT THE COMPANIES DO NOT EXIST AND WERE NOT FOUND TRACEABLE EITHER DU RING THE COURSE OF ASSESSMENT PROCEEDINGS IN DECEMBER 2009 NOR DURING THE COURSE OF REMAND PROCEEDINGS AT THE ADDRESSES FURNISHED. WITH REGAR D TO THE OTHER EVIDENCE FURNISHED BY THE ASSESSEE, THE AO SUBMITTED IN HIS REMAND REPORT THAT THE BILLS FURNISHED HAD BEEN GENERATED THROUGH COMPUTER S AND SIGNATURES WERE NON-VERIFIABLE. HE ALSO SUBMITTED THAT WHEN THE PAR TIES DO NOT EXIST AT THE GIVEN ADDRESS THE SANCTITY OF THESE BILLS ARE ALSO DOUBTFUL. 6. THE ASSESSEE IN REPLY TO THE REMAND REPORT POI NTED OUT THAT IN THE REMAND PROCEEDINGS BEFORE THE AO THAT IT WAS PREPA RED TO PRODUCE THE DIRECTORS OF THE TWO COMPANIES FOR EXAMINATION BU T THE AO DID NOT ACCEDE TO THE REQUEST OF THE ASSESSEE. THE ASSESSEE ALS O POINTED THAT THE TRANSACTION OF PURCHASE WAS IN THE YEAR 2006 AND TH E ENQUIRIES WERE MADE BY THE AO IN THE YEAR 2009 AND ENQUIRY BEFORE THE C IT(A) WAS IN THE YEAR 2011. THE ASSESSEE POINTED OUT THAT THE TWO COMPAN IES HAVE BECOME NON- OPERATIVE AND THE DIRECTORS OF THE TWO COMPANIES HA VE TAKEN UP JOB AND THERE WAS NO STAFF AVAILABLE. THE ASSESSEE FURTHER POINTED OUT THAT WHEN THE SALES HAVE BEEN ACCEPTED AS GENUINE PURCHASES CANNO T BE DISBELIEVED. 7. IN THE COURSE OF THE APPELLATE PROCEEDINGS THE A SSESSEE PRODUCED BEFORE THE CIT(A) ONE SHRI S.H. MORE, DIRECTOR OF B OTH THE COMPANIES, WHO CONFIRMED THE TRANSACTION OF SALE MADE TO THE ASSES SEE. HE FURTHER CONFIRMED THAT BOTH THE COMPANIES WERE NO LONGER A CTIVELY CARRYING OUT BUSINESS. ONE SHRI H.P. JHANGIR WAS AUTHORIZED TO OPERATE THE BANK ACCOUNT OF NIPL. HE ALSO APPEARED AND CONFIRMED TH E FACTS AS CLAIMED BY THE ASSESSEE, BEFORE THE AO ONE SHRI PURUSHOTTAM C. DHOOT, WAS ITA NO. 3791/MUM/11(A.Y.2007-08) 5 AUTHORIZED SIGNATORY OF THE BANK ACCOUNT OF TTPL. HE ALSO APPEARED BEFORE THE CIT(A) BUT COULD NOT REMEMBER THE DETAILS OF TH E TRANSACTION. IN THE LIGHT OF THE ABOVE CIT(A) WAS OF THE VIEW THAT THE ADDITI ON MADE BY THE AO HAS TO BE SUSTAINED FOR THE FOLLOWING REASONS: 2.6 THE GENUINENESS OF THE PURCHASES SHOWN FROM M /S TOPWORTH TRADES PVT LTD AND M/S NATKHAT INVESTRADE PVT LTD I S THE ISSUE IN QUESTION. THE APPELLANT HAS FILED DOCUMENTS AS ABOV E SAID TO SHOW THAT THE COMPANIES ARE ASSESSED TO TAX. HOWEVER AS PER THE REMAND REPORT OF THE ASSESSING OFFICER, LOCAL ENQUIRIES RE VEALED THE NON- EXISTENCE /NON-OPERATION OF THE COMPANIES AT THE GI VEN ADDRESSES. IN FACT FLAT NO. 602 IN GREEN COURT CO-OP HSG. SOCIETY , ANDHERI (E) WAS FOUND TO BE OCCUPIED FOR THE LAST FOUR YEARS BY SOM E OTHER PERSON ALTOGETHER. IT IS NOT THE CASE THAT THE PREMISES W ERE OCCUPIED /RENTED BY ANY OF THE DIRECTORS OF THE COMPANY. THE COMPANI ES WERE NOT FOUND TRACEABLE EITHER IN DECEMBER, 2009 AT THE TIM E OF ASSESSMENT PROCEEDINGS, OR IN FEBRUARY, 2011 DURING REMAND PRO CEEDINGS. DURING APPEAL PROCEEDINGS THE APPELLANT PRODUCED ONE SHRI. SHIVAJI. H. MORE, WHO WAS STATED TO BE THE DIRECTOR OF BOTH THE SAID COMPANIES. HOWEVER THE COPY OF RETURN FILED WITH THE ROC ON 30/09/2008 (COPIES FILED IN APPEAL PROCEEDINGS) SHOWS THE DIRECTORS/MANAGER/SEC RETARY OF TOPWORTH TRADES . LTD AS SHRI BUDDHARAM K SHARMA, S HRI PURUSHOTTAM C DHOOT, AND SHRI P SREEDHARAN, AND. DIRECTORS/MANAGER/SECRETARY OF NATKHAT INVESTRADE P . LTD AS SHRI RAMESH KUMAR KAMBIKKANAM, SHRI BUDDHARAM K.SHARMA, SHRI GOPAL DAS SHARDA AND SHRI P SREEDHARAN. THE NAME OF SHRI S.H.MORE DOES NOT FIGURE IN THE LIST. THUS THE CONFIRMATION BY SHRI MORE IS NOT ACCEPTABLE AS EVIDENCE IN SUPPORT OF THE TRANSACTIO N. SHRI P.C.DHOOT WHO IS NAMED AS A DIRECTOR DID APPEAR IN APPEAL PRO CEEDINGS, BUT COULD NOT REMEMBER EVEN THE NATURE GOODS SOLD TO TH E APPELLANT LET ALONE THE DETAILS OF THE TRANSACTIONS. ONLY COPIES OF INVOICE CUM CHALLANS HAVE BEEN FILED, WHICH IN THE ABSENCE OF L ORRY RECEIPTS, OCTROI DUTY OR EVIDENCE IN SUPPORT OF TRANSPORTATION OF TH E GOODS CANNOT BY THEMSELVES CORROBORATE THE TRANSACTIONS IN THE FACE OF EVIDENCES AND CIRCUMSTANCES POINTING TO THE CONTRARY, AS NON-AVAI LABILITY OF THE COMPANY/DIRECTORS AT THE ADDRESSES FURNISHED. THE F ACT THAT THE COMPANIES ARE ASSESSED TO TAX AND FILE RETURNS WITH THE ROC CAN AT BEST ONLY PROVE THE IDENTITY OF THE COMPANIES BUT D O NOT PROVE THE GENUINENESS OF THE TRANSACTION. IN FACT EVEN THE CO MPANIES WERE NOT FOUND AT THE ADDRESSES GIVEN. THE ADDRESS GIVEN AS ON 30/09/2008 IN THE RETURN FILED WITH ROC FOR TOPWORTH TRADES P. LT D IS 602, GREEN COURT CHS, MAROL, ANDHERI(E), MUMBAI, BUT IN FEBRUA RY, 2011, THE FLAT WAS FOUND OCCUPIED BY A PERSON BY THE NAME MR. ABHAS M. ITA NO. 3791/MUM/11(A.Y.2007-08) 6 METAWALA WHO HAS TAKEN THIS FLAT ON RENT FROM THE O WNER, MRS S M SHASTRI. THE FLAT WAS GIVEN ON RENT SINCE THE LAST 4 YEARS. IN THESE CIRCUMSTANCES THE GENUINENESS OF THE TRANSACTIONS H AS NOT BEEN PROVED, AND THUS THE ADDITION MADE BY THE ASSESSING OFFICER IS CONFIRMED. 8. AGGRIEVED BY THE ORDER OF THE CIT(A) THE ASSESSE E HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 9. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS AS WERE MADE BEFORE THE REVENUE AUTHORITIES. HE FURTHER BR OUGHT TO OUR NOTICE THAT THE G.P. RATIO OF THE ASSESSEE FOR THE EARLIER YEAR AND THE SUCCEEDING YEAR WERE AS FOLLOWS: ASSTT. YEAR G.P.RATIO 2006-07 0.69% 2007-08 1.56% 2008-09 1.34% HE BROUGHT TO OUR NOTICE VARIOUS DOCUMENTS FILED BE FORE THE CIT(A) AND SUBMITTED THAT THOSE DOCUMENTS CLEARLY ESTABLISHES THE GENUINENESS OF THE TRANSACTION. OUR ATTENTION WAS ALSO DRAWN TO THE FACT THAT SHRI S.H.MORE STILL CONTINUES TO BE A DIRECTOR IN BOTH THE COMPAN IES AND IN THIS REGARD FILED A COPY OF THE RECORDS OF REGISTRAR OF COMPANIES (RO C) AS APPEARING IN THE WEB SITE OF THE MINISTRY OF CORPORATE AFFAIRS, SHOW ING THAT S.H.MORE STILL CONTINUES TO BE A DIRECTOR IN BOTH THE COMPANIES. THE LD. COUNSEL FOR THE ASSESSEE ALTERNATIVELY SUBMITTED THAT THE ENTIRE PU RCHASES CANNOT BE ADDED AS INCOME ESPECIALLY WHEN THE SAME QUANTITY PURCHAS ED WERE SHOWN AS SALES AND SUCH SALES ARE NOT DISBELIEVED. IT WAS HIS SUBMISSION THAT AT BEST PERCENTAGE OF G.P ON THE PURCHASES IN QUESTION CAN ONLY BE MADE. IT WAS ALSO SUBMITTED THAT AS A PURCHASER, THE ASSESSEE CA NNOT BE EXPECTED TO DISCHARGE A HIGH STANDARD OF PROOF AS IS SOUGHT TO BE DEMANDED BY THE ITA NO. 3791/MUM/11(A.Y.2007-08) 7 REVENUE AUTHORITIES. THE LD. D.R RELIED ON THE ORD ER OF THE CIT(A) AND SUBMITTED THAT NO CONTEMPORANEOUS EVIDENCE WAS SUB MITTED BY THE ASSESSEE TO PROVE PURCHASES AND, THEREFORE, THE ADD ITION MADE HAD TO BE SUSTAINED. 10. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTI ES. IN OUR VIEW THE ADDITION MADE CANNOT BE SUSTAINED FOR THE FOLLOWING REASONS. THE ASSESSEE FILED BEFORE THE REVENUE AUTHORITIES COPIES OF SALE S BILL-CUM- CHALLAN, COPY OF PAN CARD, AUDITED ACCOUNTS AS ON 31/3/2007 OF TTPL & NIPL, BESIDES COPY OF MEMORANDUM OF ARTICLES OF ASSOCIATION, COPY OF A NNUAL RETURN, FORM NO.18 AND PAYMENT VOUCHER OF THE ASSESSEE FOR PAYMENT OF TRANSPORTATION CHARGES ETC. SHRI S.H. MORE WAS A DIRECTOR OF BOTH THE COM PANIES. THIS IS CLEAR FROM THE RECORD OF THE ROC PRODUCED BY THE ASSESSEE BEFO RE US. SHRI S.H.MORE WAS APPOINTED AS A DIRECTOR IN NIPL ON 7/3/2009 AND TTPL ON 20/3/2009. THE CIT(A) HAS REFERRED TO ANNUAL RETURN FILED WI TH THE ROC ON 20/9/2008 AND HAS CONCLUDED THAT SHRI S.H. MORE DID NOT FIGUR E IN THE LIST OF DIRECTORS AND, THEREFORE, THE EVIDENCE OF SHRI MORE CANNOT BE ACCEPTED. THE FURTHER REASON WAS THAT THERE WAS ABSENCE OF LORRY RECEIPT, OCTROI DUTY OR EVIDENCE IN SUPPORT OF TRANSPORTATION. THE SALE WAS LOCAL SALE AND THERE WAS NO REQUIREMENT OF PAYMENT OF OCTROI DUTY. MOREOVER, T HERE WERE VOUCHERS AVAILABLE IN SUPPORT OF EXPENSES FOR TRANSPORTATION OF GOODS. THE FACT THAT THE COMPANIES WERE REGISTERED WITH ROC AND WERE FIL ING ANNUAL RETURNS UNDER THE COMPANIES ACT, 1956 PROVES THEIR IDENTITY . THE NON-EXISTENCE OF ANY PERSON IN THE OFFICE OF THESE TWO COMPANIES WHE N THE INSPECTOR VISITED THE PREMISES CANNOT BE THE BASIS TO SUSTAIN THE IMP UGNED DISALLOWANCE. AS ALREADY STATED THE COMPANIES CEASED TO CARRY ON BUS INESS AT THE TIME WHEN THE ENQUIRY WAS MADE. IN THESE CIRCUMSTANCES WE AR E OF THE VIEW THAT NO ADVERSE INFERENCE COULD BE DRAWN AGAINST THE ASSESS EE. THE EVIDENCE OF S.H.MORE REMAINS UNCONTROVERTED. THE AO HAS NOT BR OUGHT ANY MATERIAL ON RECORD TO SHOW THAT HIS EVIDENCE CANNOT BE BELIEVED . THE CONFIRMATION OF ITA NO. 3791/MUM/11(A.Y.2007-08) 8 S.H.MORE AND THE OTHER DOCUMENTARY EVIDENCE PRODUCE D BY THE ASSESSEE PRIMA FACIE PROVE THE GENUINENESS OF THE PURCHASES. IN THIS REGARD WE ARE OF THE VIEW THAT THE TIME GAP BETWEEN THE PURCHASES AN D THE TIME WHEN ENQUIRIES WERE MADE BY THE REVENUE AUTHORITIES AND THE CLOSING DOWN OF BUSINESS OF TTPL AND NIPL DURING THE INTERVENING PE RIOD WERE FACTORS WHICH GO IN FAVOUR OF THE ASSESSEE AND SHOULD HAVE BEEN C ONSIDERED BY THE REVENUE AUTHORITIES. WE ARE ALSO OF THE VIEW THAT THE STANDARD OF PROOF THAT CAN BE INSISTED ON THE PART OF THE ASSESSEE IN SUCH CIRCUMSTANCES SHOULD BE TOO ONEROUS. IN THE ABSENCE OF ANY CONCRETE MATERI AL TO THE CONTRARY, THE CONCLUSIONS DRAWN BY THE CIT(A) IN OUR VIEW ARE PUR ELY BASED ON SURMISES. IN THIS REGARD WE ALSO ARE OF THE VIEW THAT WHEN TH E SALES WERE ACCEPTED THE CORRESPONDING PURCHASES CANNOT BE TREATED AS INCOME . FOR THE REASONS GIVEN ABOVE WE DIRECT THAT THE ADDITION SUSTAINED B Y THE CIT(A) SHOULD BE DELETED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 18 TH DAY OF APRIL 2012 SD/- SD/- (P.M.JAGTAP ) (N.V.VASUDEVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 18 TH APRIL 2012 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.RC BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM. ITA NO. 3791/MUM/11(A.Y.2007-08) 9 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 11/04/2012 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 12/04/2012 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER