INDUSTRIAL EXPORTS, MUMBAI V. ACIT 15(2), MUMBAI

ITA 4135/MUM/2011

• Counselvise Citation: 413519914 RSA 2011
• Duration Of Justice: 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 26-09-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 19-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Corroborative evidences; Set aside
• Section: 133(6); 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'I' BENCH, MUMBAI BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 4135/MUM/2011 (ASSESSMENT YEAR: 2007-08) M/S. INDUSTRIAL EXPORTS A C I T - 15(2) FLAT NO. 22, 2ND FLOOR 113, MATRU MANDIR, TARDEO RO AD SAYED VILLA, 12, REYNOLD ROAD VS. MUMBAI 400007 AGRIPADA, MUMBAI 400008 PAN - AAAFI 6935 Q APPELLANT RESPONDENT APPELLANT BY: SHRI FARROKH V. IRANI RESPONDENT BY: SHRI SUNIL KUMAR SINGH DATE OF HEARING: 26.09.2011 DATE OF PRONOUNCEMENT: 31.10.2011 O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A)- XXVIII, MUMBAI DATED 25.03.2011. 2. VIDE ORDER DATED 02.09.2011 STAY HAD BEEN GRANTED T O ASSESSEE AND WHEN THE CASE WAS TAKEN UP FOR HEARING ASSESSEE HAD FILED CONCISE GROUND OF APPEAL IN THE COURSE OF PROCEEDINGS. THE ISSUE IN T HE PRESENT APPEAL IS WITH REFERENCE TO THE ACTION OF THE A.O. IN DISALLOWING PURCHASES OF ` 48,76,188/- WHICH WAS CONFIRMED BY THE CIT(A). 3. BRIEFLY STATED, ASSESSEE IS A MERCHANT EXPORTER IN STAINLESS STEEL KITCHENWARE AND STATED TO BE PURCHASING GOODS AS PE R SPECIFIC EXPORT ORDERS AND EXPORTS THE GOODS. IN THE COURSE OF AN ENQUIRY BY THE DEPARTMENT STATEMENT OF ONE SHRI PRAVEEN T. AGARWAL, DIRECTOR OF M/S. SHRADHA SABURI MERCHANT LTD. (SSML) WAS RECORDED WHEREIN THE SAID DIRECTOR STATED THAT HE HAS NOT DONE ANY BUSINESS BUT ONLY PROVIDED BOGUS B ILLS IN THEIR BUSINESS. AS ASSESSEE HAS PURCHASED GOODS WORTH ` 48,76,188/- FROM THE SAID SSML IN THE IMPUGNED YEAR THE A.O. CALLED UPON THE ASSESSEE TO PROVE THE ITA NO. 4135/MUM/2011 M/S. INDUSTRIAL EXPORTS 2 GENUINENESS OF THE PURCHASES. EVEN THOUGH ASSESSEE FURNISHED RELEVANT ACCOUNT DETAILS, VOUCHERS AND BILLS OF PAYMENT THE A.O. ISSUED NOTICE UNDER SECTION 133(6) CALLING FOR DETAILS FOR WHICH THERE WAS NO COMPLIANCE. HOWEVER, THE REPLY WAS RECEIVED INCLUDING THE COMPU TERISED ACCOUNTS OF THE ASSESSEE FROM SSML. THE A.O. FELT THAT THERE WERE N O SUPPORTING EVIDENCES LIKE BILLS RAISED, MODE OF TRANSACTION OF GOODS AND , THEREFORE, ASSESSEE WAS ASKED TO PRODUCE THE CONCERNED PERSONS FROM M/S SSM L TO SUBSTANTIATE THE CLAIM THAT THE PURCHASES MADE FROM THAT PARTY ARE G ENUINE. AS THERE IS FAILURE ON THE PART OF ASSESSEE TO DO SO, THE A.O. DISALLOWED THE PURCHASES TO THE EXTENT OF ` 48,76,188/-. 4. BEFORE THE LEARNED CIT(A) ASSESSEE OBJECTED AND FUR NISHED COMPLETE DETAILS, WHICH WAS SENT ON REMAND TO THE A.O.. AND THE A.O. FURNISHED A REPORT DATED 21.03.2011 IN WHICH THE A.O. REITERATE D THE SUBMISSIONS AND STATED THAT ASSESSEE HAS NOT DISCHARGED ITS ONUS, M ORE SO PARTICULARS OF BANK STATEMENTS, CHEQUE NUMBERS AND ORIGINAL COPY O F DELIVERY CHALLAN, ETC. WERE NOT PROVIDED. THE A.O., IN THE ABSENCE OF THE ABOVE, HOWEVER, STATED THAT AS MUCH AS 14 HEARINGS WERE GIVEN AND ASSESSEE HAS NOT PRODUCED THE CONCERNED PERSON FOR SUPPORTING THE CLAIM OF THE PU RCHASES. IN THE ABSENCE OF CONFIRMATION FROM ASSESSEE THE A.O. REPORTED THA T THE PURCHASES CANNOT BE ACCEPTED AS GENUINE. THE CIT(A) WAS OF THE VIEW THAT THE STATEMENT GIVEN BY THE DIRECTOR OF THE SUPPLIER COMPANY HAS NOT BEE N NEGATED BY THE ASSESSEE, THEREFORE ASSESSEES CLAIM THAT PURCHASES ARE GENUINE CANNOT BE ACCEPTED AND HE AGREED WITH THE REASONS GIVEN BY TH E A.O. IN THE ORDER AND IN THE REMAND REPORT TO UPHOLD THE DISALLOWANCE OF PURCHASES AS BOGUS. ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED COUNSEL REFERRED TO THE PAPER BOOK FURN ISHED IN THIS REGARD TO SUBMIT THAT ASSESSEE HAS EXPORT SALES TO THE TUNE OF ` 31.77 CRORES AND PURCHASES ARE TO THE TUNE OF ` 29.06 CRORES DURING THE YEAR AND THE TOTAL COST OF GOODS SOLD CLAIMED IN THE P & L ACCOUNT WAS TO THE TUNE OF ` 36.10 CRORES. IT WAS SUBMITTED THAT THERE WERE PURCHASES FROM THE SAID M/S SSML DURING THE YEAR AND THESE PURCHASES WERE DIRECTLY W ITH REFERENCE TO THE EXPORT AND ALL THE TRANSACTIONS WERE TALLIED BEFORE THE A.O. HE REFERRED TO PAGE 36 OF THE PAPER BOOK TO SUBMIT THAT EXPORT OF 854 CARTONS TO JORDAN ITA NO. 4135/MUM/2011 M/S. INDUSTRIAL EXPORTS 3 IMPORT & MARKETING CO. WAS SUPPORTED BY BILL OF LAD ING AND EXPORT OF 11.09.2006 WAS SOURCED FROM M/S. SSML AND THE SUPPO RTING PURCHASES WERE EVIDENCED BY THE BILLS PLACED IN PAGE NO. 33 & 34. HE THEN REFERRED TO THE DETAILS OF ITEMS PURCHASED AND SOLD AND THE CLO SING STOCK FURNISHED TO THE A.O. AS PART OF ANNEXURE C TO THE AUDIT REPOR T TO SUBMIT THAT THE PURCHASES AND SALES ARE DULY ACCOUNTED FOR AND TALL Y OF GOODS WAS MADE BEFORE THE A.O. HE FURTHER SUBMITTED THAT ALL THE P URCHASE BILLS FROM M/S. SSML WERE PAID BY WAY OF CHEQUES AND ALL THE GOODS WERE IN TURN EXPORTED AND THE EXPORT PROCEEDS WERE RECEIVED, DETAILS OF W HICH WERE ALSO FURNISHED BEFORE THE A.O. IN SUPPORT OF THE CONTENTIONS. THEN HE REFERRED TO THE CORRESPONDENCE WITH THE DDIT IN THE COURSE OF ENQUI RY IN THE CASE OF M/S. SSML TO SUBMIT THAT THE DDIT INVESTIGATION OBTAINED ALL THE PURCHASE BILLS AND SALES BILLS AND PAYMENT DETAILS EVEN BEFORE HE ADDRESSED LETTER TO THE A.O. IN THE COURSE OF ENQUIRY WITH M/S SSML AND WAS SATISFIED THAT ASSESSEES PURCHASES CANNOT BE DOUBTED. IT WAS HIS SUBMISSION THAT ASSESSEE HAS DISCHARGED ITS ONUS COMPLETELY BEFORE THE A.O. AND TALLIED THE GOODS PURCHASED WITH THAT OF EXPORTS AND FURTHER TH E DDIT ENQUIRED ABOUT THE TRANSACTIONS WITH THE ASSESSEE IN WHICH NOTHING ADVERSE HAS BEEN FOUND. HE ALSO REFERRED TO THE STATEMENT GIVEN BY S HRI PRAVEEN T. AGARWAL TO SUBMIT THAT ASSESSEE WAS NOT FIGURING IN THE SAID S TATEMENT AND THE ENQUIRES ARE WITH REFERENCE TO M/S. RECHNER AUTOMAT ION SYSTEM P. LTD., PRAKESH METAL AND M/S. RELIANCE CABLES AND CONDUCTO RS P. LTD. HE REFERRED TO THE STATEMENT PLACED IN PAGE 89 TO 91 TO SUBMIT THAT THE TRANSACTIONS WITH THE ABOVE COMPANIES WERE ONLY TERMED AS NOT GE NUINE BUT NOT WITH ASSESSEE FIRM. IT WAS HIS SUBMISSION THAT EVEN ON T HE BASIS OF THE STATEMENT IT CANNOT BE STATED THAT ASSESSEES PURCHASES ARE B OGUS AND THE DIRECTORS STATEMENT REFER TO TRANSACTIONS WITH THIRD PARTIES AND NOT WITH THE ASSESSEE FIRM. 6. THE LEARNED COUNSEL FURTHER SUBMITTED THAT ASSESSEE HAS ESTABLISHED THE PURCHASES FROM M/S. SSML BY POSITIVE EVIDENCES AND THE PURCHASES FROM THE SAID PARTY CANNOT BE DISALLOWED ON PRESUMP TIONS AND SURMISES AND RELIED ON THE DECISION IN THE CASE OF BALAJI TE XTILE INDUSTRIES P. LTD 49 ITD 177 TO SUBMIT THAT THE SALES CANNOT BE EFFECTED IF THERE ARE NO ITA NO. 4135/MUM/2011 M/S. INDUSTRIAL EXPORTS 4 PURCHASES AND A REASONABLE AND CONVINCING INFERENCE COULD BE DRAWN THAT ASSESSEE PURCHASED THOSE GOODS AND SOLD THEM THEREF ORE, ASSESSEE WAS ENTITLED TO GET THE ENTIRE DEDUCTION. HE FURTHER RE LIED ON THE DECISION OF THE ITAT IN THE CASE OF J.R. SOLVENT INDUSTRIES P. LTD. VS. ACIT 68 ITD 65 (CHD) (TM) ON THE PROPOSITION THAT IF THE EXPORT STOOD AC CEPTED THE QUANTITY OF PURCHASE, ETC. WOULD ALSO STAND ACCEPTED. OTHERWISE IF THE ENTIRE PURCHASES ARE TREATED AS BOGUS AND EXCLUDED FROM THE PROCESS, YIELDS RESULTING THEREFROM WOULD BE ABNORMAL, THEREFORE THE ADDITION S CANNOT BE MADE WHEN THE SAME GOODS WERE EXPORTED AND SALE PROCEEDS WERE RECEIVED. 7. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED COUNSEL FURTHER SUBMITTED THAT AS STATED IN THE DECISION IN THE CASE OF BANSA L STEEL ROLLING MILLS VS. ITO 92 TAXMAN 314 ASSESSEE IF NOT PURCHASED FROM M/S. S SML COULD HAVE PURCHASED FROM SOME OTHER SOURCE AS THE SAME GOODS WERE EXPORTED. ONCE THE EXPORTS ARE PROVED THE CORRESPONDING AVAILABILI TY OF GOODS CANNOT BE DENIED. HE ALSO RELIED ON CERTAIN LEGAL PRINCIPLES THAT A.O. COULD HAVE SUMMONED THE RELEVANT PARTIES BY HIMSELF INSTEAD OF ASKING THE ASSESSEE TO PRODUCE THEM BEFORE HIM AND RELIED ON THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF NATHU RAM PREMCHAND VS. C IT 49 ITR 561 AND ALSO ANOTHER DECISION IN THE CASE OF MUNNALAL MURLI DHAR VS. CIT 79 ITR 540. HE ALSO FURTHER SUBMITTED THAT SINCE THE STATEMENT DOES NOT RELATE TO THE ASSESSEE AND HAS NOTHING INCRIMINATING WAS FOUND TH E PURCHASES CANNOT BE DISALLOWED BY THE A.O. AND RELIED ON THE PRINCIPLES ESTABLISHED BY THE HON'BLE SUPREME COURT IN THE CASE OF ITO VS. LAKHMA NI MEWAL DAS 103 ITR 437 TO SUBMIT THAT THERE IS NO LINK WITH THE STATEM ENT AND ASSESSEES TRANSACTION AND THERE IS NO INDICATION THAT THE STA TEMENT PERTAINS TO THE PURCHASE MADE BY THE ASSESSEE AND THERE IS NO NEXUS PRESENT AND THE STATEMENT ALONE CANNOT BE RELIED UPON TO DISALLOW T HE PURCHASE MADE BY THE ASSESSEE FROM THE SAID SOURCE. 8. ON ENQUIRY BY THE BENCH THE LEARNED COUNSEL SUBMITT ED THAT ASSESSEE HAD THE PRACTICE OF GIVING ADVANCE FOR PURCHASES AN D EXPORT ORDERS ARE RECEIVED FIRST AND THEN ONLY PURCHASE ORDERS ARE PL ACED AND THAT IT WAS A PRACTICE THAT INLAND TRANSPORTATION COST WAS BORNE BY THE SELLERS AS THE GOODS ARE SUPPLIED TO THE WAREHOUSE AND THE TRANSPO RTATION EXPENSE ITA NO. 4135/MUM/2011 M/S. INDUSTRIAL EXPORTS 5 CLAIMED IN THE P & L ACCOUNT PERTAINS TO THE EXPORT OF GOODS TRANSPORTED FROM WAREHOUSE TO THE POINT OF EXPORT. 9. THE LEARNED D.R. IN REPLY HOWEVER, SUBMITTED THAT S HRI PRAVEEN T. AGARWAL HAS CATEGORICALLY STATED THAT THE SAID COMP ANY WAS INVOLVED IN PROVIDING BOGUS BILLS AND SO THE PURCHASES ARE DOUB TED. IT WAS SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS AS WELL AS D URING THE REMAND PROCEEDINGS ASSESSEE DID NOT PROVE THE SUPPLY OF GO ODS CATEGORICALLY AND UNLESS THE PURCHASES PROVED TO HAVE BEEN THE GOODS EXPORTED THE CREDIT CANNOT BE GIVEN. HE FURTHER SUBMITTED THAT WHEN SUM MONS WERE ISSUED NONE APPEARED AND, THEREFORE, THE PURCHASES STAND D ISPROVED. THERE WAS GOODS EXPORTED BUT IT WAS FOR THE ASSESSEE TO PROVE THAT THE GOODS EXPORTED WERE THE SAME AS THAT OF THE PURCHASES FROM M/S. SS ML AND, THEREFORE, UNLESS THAT ONUS IS DISCHARGED THE PURCHASES CANNOT BE ACCEPTED AS GENUINE. HE RELIED ON THE ORDERS OF THE A.O. AND CI T(A) ON THIS REGARD. 10. WE HAVE EXAMINED THE ISSUE AND CONSIDERED THE RIVAL ARGUMENTS. AS SEEN FROM THE PAPER BOOK PLACED ON RECORD ASSESSEE HAS FURNISHED NECESSARY DETAILS OF PURCHASES FROM M/S. SSML AND A LSO SUBMITTED THAT THE GOODS EXPORTED BY ASSESSEE ARE THE ONES PURCHASED F ROM M/S. SSML. HE ALSO PLACED ON RECORD THE PURCHASE OF GOODS AS PER THE STOCK REGISTER IN ANNEXURE C TO FORM 3CD ITEM-WISE. AS SEEN FROM TH E DETAILS FURNISHED BY THE ASSESSEE BEFORE THE A.O., PRIMA FACIE IT CANNOT BE STATED THAT THE PURCHASES ARE BOGUS. HOWEVER, ONE ASPECT WHICH WAS NOT EXAMINED BY THE A.O. OR BY THE CIT(A) WAS WHETHER THE SAME GOODS WE RE EXPORTED OR NOT. BEFORE ACCEPTING ANY GOODS AS GENUINE PURCHASE, IT IS NECESSARY TO EXAMINE WHETHER THE ALLEGED PURCHASES ARE MADE IN THE COURS E OF BUSINESS ROUTINELY. BEFORE US IT WAS SUBMITTED THAT ASSESSEE IS IN THE HABIT OF PROVIDING ADVANCES TOWARDS PURCHASE. WE HAVE NOTICED FROM THE ACCOUNT COPY OF M/S. SSML THAT ASSESSEE HAS PROVIDED ADVANCES IN ROUND S UM AMOUNTS MUCH BEFORE THE GOODS WERE ACCOUNTED AS PURCHASES AND NE CESSARY CREDITS WERE GIVEN TO THE ACCOUNT. IT WAS SUBMITTED BY THE LEARN ED COUNSEL DURING THE COURSE OF ARGUMENT THAT ASSESSEE WAS IN THE HABIT O F ADVANCING AMOUNTS TOWARDS PURCHASES. THIS ASPECT WAS NOT EXAMINED BY THE A.O. WHETHER ITA NO. 4135/MUM/2011 M/S. INDUSTRIAL EXPORTS 6 ASSESSEE HAD FURNISHED ADVANCES TO OTHER PARTIES IN THE SAME MANNER AS A BUSINESS PRACTICE. 11. ANOTHER ASPECT WHICH WAS STATED BEFORE US WAS THAT THE GOODS WERE PURCHASED AS AND WHEN THE EXPORT ORDERS WERE RECEIV ED. IN THE COURSE OF ARGUMENT IT WAS SPECIFICALLY ASKED ABOUT THE DATE O F EXPORT ORDER AND THE PLACEMENT OF PURCHASE ORDER WITH M/S. SSML. EVEN TH OUGH IT WAS PROMISED THAT THE DETAILS WILL BE FURNISHED, NO DETAILS WERE FURNISHED SUBSEQUENT TO THE DATE OF HEARING. HENCE THIS ASPECT COULD NOT BE EXAMINED BY US. 12. THE THIRD ASPECT, THE A.O. VERY SPECIFICALLY STATED IN THE ORDER AND THE REMAND REPORT WAS ABOUT THE EVIDENCE WITH REFERENCE TO TRANSPORTATION OF GOODS. IT WAS SUBMITTED THAT ASSESSEE PLACED ORDERS WITH VARIOUS SUPPLIERS AND IT IS THEIR RESPONSIBILITY TO SUPPLY TO ASSESSE ES WAREHOUSE THEREFORE ASSESSEE DOES NOT INCUR ANY COST OF TRANSPORTATION. AS SEEN FROM THE COST OF GOODS SOLD IN SCHEDULE D THERE WERE INLAND TRANSP ORTATION COST OF ` 14,62,483/- AND CLEARING AND FORWARDING CHARGES OF ` 12,06,613/-. AS SUBMITTED THIS EXPENDITURE PERTAINS TO TRANSPIRATIO N OF GOODS FROM THE WAREHOUSE TO THE CUSTOM POINT FOR EXPORT. THIS ASPE CT COULD NOT BE EXAMINED BY US NOR THE PRACTICE OF DELIVERY OF GOOD S AT THE WAREHOUSE BY THE VARIOUS SUPPLIERS. UNLESS THE EXPENDITURE CLAIMS AR E EXAMINED IN DETAIL THIS ASPECT CANNOT BE VERIFIED AND CONFIRMED WHETHER THE GOODS ARE DELIVERED TO THE WAREHOUSE BY THE SAID SUPPLIERS OF GOODS. 13. THE LAST ASPECT WHICH THE CIT(A) ALSO CONSIDERED IN THE APPELLATE ORDER AND OPINED INDIRECTLY WAS ABOUT THE CONTENTION OF T HE ASSESSEE THAT GOODS PURCHASED WERE EXPORTED AND STOCKS TALLY. THE CIT(A ) IN PARA 3.5 DID OBSERVE THAT THE PACKING LIST ENCLOSED MENTIONED AB OUT THE NUMBER CARTONS AND NOWHERE IT WAS SUBSTANTIATED THAT THESE WERE TH E SAME GOODS WHICH WERE CLAIMED TO HAVE BEEN PURCHASED. WE HAVE ALSO E XAMINED THE PURCHASE BILLS FROM M/S. SSML AND BILLS OF LADING OF GOODS E XPORTED WHICH INDICATE THE ITEMS IN CARTONS/DOZENS. ANNEXURE C TO 3CD REPO RT GIVES THE OPENING STOCK, INWARDS AND OUTWARDS AND CLOSING STOCK OF VA RIOUS ITEMS IN DOZENS AND NOT IN CARTONS. THE BILLS PLACED ON RECORD, SOM E SHOWS IN DOZENS WHEREAS THE GOODS EXPORTED WERE SHOWN IN CARTONS. T HEREFORE, AS OPINED BY ITA NO. 4135/MUM/2011 M/S. INDUSTRIAL EXPORTS 7 THE CIT(A) THE EXACT CORRELATION CANNOT BE VERIFIED BY US. NOT ONLY THAT THERE ARE CLOSING STOCK ITEMS ALSO OF SOME OF THE ITEMS S TATED TO HAVE BEEN EXPORTED. FOR EXAMPLE, WE HAVE EXAMINED THE BILL PL ACED AT PAGE 38, WHICH SHOWS PURCHASE OF DEEP LADLE OF 640 DOZENS AS ON 19 .08.2006 AND AS SEEN FROM THE STOCK REGISTER THERE CLOSING STOCK OF DEE P LADLE, DEEP LADLE-A AND DEEP LADLE-B. HOWEVER, IT IS NOT CLEAR WHETHER THE PURCHASE OF DEEP LADLE PERTAINS TO WHICH OF THE ITEMS SHOWN IN THE THREE D IFFERENT ITEMS OF DEEP LADLE. THE BILL DATED 17.08.2006 AT PAGE 40 PERTAIN S TO AMERICAN DEEP LADLE OF 600 DOZENS WHICH WAS PURCHASED AND EXPORTED WITH OUT ANY CLOSING STOCK. THIS ASPECT IS VERIFIABLE. HOWEVER, NEITHER THE A.O . NOR THE CIT(A) EXAMINED WITH REFERENCE TO THE ITEMS PURCHASED, THE ITEMS EX PORTED IN ITS CORRECT PERSPECTIVE SO AS TO VERIFY WHETHER THE STATEMENT M ADE BY ASSESSEE THAT THE GOODS PURCHASES FROM THE ABOVE PARTY WERE EXPORTED. 14. THE BILL DATED 04.08.2006 AT PAGE 50 PERTAINS TO S. S. MVG 10 CM AND THE PURCHASE QUANTITY WAS 3040 DOZENS. THIS ALSO SA ID TO HAVE BEEN EXPORTED AND MENTIONED IN THE INVOICE DATED 28.08.2 006 TO M/S. NILE INTERNAL CO. OF EGYPT BUT AS SEEN FROM THE STOCK MV M 10 CM CONTAINED OPENING STOCK OF 1794 DOZENS, PURCHASE OF 48240 DOZ ENS, EXPORT OF 56280 DOZENS AND CLOSING STOCK OF 905 DOZENS. IT REQUIRES A CORRECT CORRELATION AND EXAMINATION BEFORE THE A.O. THERE IS NO DOUBT THAT ASSESSEE HAS FURNISHED RELEVANT DETAILS IN THE PAPER BOOK INCLUDING THE PA YMENT OF AMOUNTS TO THE SAID M/S SSML. 15. IT IS ALSO ON RECORD THAT IN THE STATEMENT GIVEN BY SHRI PRAVEEN T. AGARWAL ASSESSEES NAME WAS NOT FIGURING AS THE ENQ UIRY WAS WITH REFERENCE TO THIRD PARTIES. NOWHERE IN THE STATEMENT IT WAS C ATEGORICALLY STATED BY THE SAID PERSON THAT THE TRANSACTIONS WITH THE ASSESSEE FIRM WERE BOGUS. JUST BECAUSE THE SAID PARTY HAS NOT APPEARED IN PERSON I T CANNOT BE STATED THAT THE PURCHASES FROM THE SAID PARTY ARE BOGUS UNLESS IT IS ESTABLISHED THAT THE ASSESSEE ALSO TOOK ADVANTAGE OF THE SUPPOSED ACTIVI TY OF PROVIDING BOGUS BILLS BY THE SAID COMPANY. THEREFORE, WE ARE OF THE OPINION THAT WITHOUT RELYING ON THE STATEMENT GIVEN BY THE DIRECTOR OF T HE SUPPLIER COMPANY WHICH DOES NOT ESTABLISH ANYTHING AGAINST ASSESSEE, IT IS THE DUTY OF THE A.O. TO EXAMINE WHETHER THE PURCHASES ARE GENUINE OR NOT . SINCE ASSESSEE ITA NO. 4135/MUM/2011 M/S. INDUSTRIAL EXPORTS 8 CONTENTS THAT (I) IT PLACES ORDERS AFTER THE EXPORT ORDERS WERE RECEIVED, (II) THE GOODS WERE TRANSPORTED TO THE WAREHOUSE BY THE SUPP LIERS, (III) THAT ALL THE PURCHASES WERE EXPORTED AND SOLD THEREFORE, PURCHAS ES CANNOT BE TREATED AS BOGUS HAS TO BE EXAMINED IN DETAIL BY THE A.O. WE ARE OF THE OPINION THAT THE MATTER REQUIRES RE-EXAMINATION BY THE A.O. WE A LSO MAKE IT CLEAR THAT IN CASE THE SAID PURCHASES ARE NOT ESTABLISHED TO BE G ENUINE BY THE ASSESSEE THEN UNLESS THE SAID GOODS ARE AVAILABLE IN THE CLO SING STOCK IT CANNOT BE DENIED THAT THE ENTIRE PURCHASE ARE TO BE DISBELIEV ED WHEN THE EXPORT SALES ARE ACCEPTED. THEN ASPECT OF ESTIMATION OF INCOME W OULD COME INTO PLAY ONLY WHEN THE PURCHASES ARE FOUND TO BE BOGUS. SINCE THE SE ASPECTS REQUIRE EXAMINATION OF FACTS BY THE A.O. WE SET ASIDE THE O RDERS OF THE A.O. AS WELL AS THE CIT(A) ON THE ISSUE AND RESTORE THE MATTER T O THE FILE OF THE A.O. TO EXAMINE THE EVIDENCE PLACED DISPASSIONATELY AFTER G IVING DUE OPPORTUNITY TO THE ASSESSEE TO ESTABLISH THE CONTENTIONS RAISED BE FORE US. WITH THESE DIRECTIONS, THE ORDERS ARE SET ASIDE AND THE ISSUE IS RESTORED TO THE FILE OF THE A.O. TO DO IT AFRESH ACCORDING TO LAW AND FACTS. 16. IN THE RESULT, APPEAL IS TREATED AS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER 2011. SD/- SD/- (D.K. AGARWAL) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 31 ST OCTOBER 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XXVIII, MUMBAI 4. THE CIT XIV, MUMBAI CITY 5. THE DR, I BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.