Dy. Commissioner of Income Tax (Central)-1, Indore, Indore V. M/s Prakash Oil Ltd. , Village Kheda, Pithampur

ITA 488/Ind/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6807 (ITAT-INDORE)
• Duration Of Justice: 3 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 22-03-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 06-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Business income
• Section: 143(3); 142(1); 133A; 143(2); 13

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI MANISH BORAD,ACCOUNTANT MEMBER AND MIS MADHUMITA ROY, JUDICIAL MEMBER ITA NO.488/IND/2017 ASSESSM ENT YEAR:2012-13 DCIT(CENTRAL) - 1 INDORE / VS. M/S PRAKASH OIL LTD. VILLAGE KHEDA, PITHAMPUR, DISTT:DHAR (APPELLANT) (R ESPONDENT ) P.A. NO. AABCP8087G APPELLANT BY SHRI HARSHIT BARI, SR. DR REVENUE BY SHRI AJAY TULSIYAN, CA DATE OF HEARING: 07.04.2021 DATE OF PRONOUNCEMENT: 25.05.2021 / O R D E R PER MANISH BORAD, A.M: THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE OF REVENUE PERTAINING TO ASSESSMENT YEAR 2012-13 IS DI RECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I II (IN SHORT LD.CIT], INDORE DATED 28.04.2017 WHICH IS ARISING OUT OF THE ORDER U/S 143(3) OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) DATED 26.03.2015, FRAMED BY DCIT-1(1), INDORE. PRAKASH OIL LIMITED 2 2. BRIEF ACTS OF THE CASE ARE CULLED OUT FROM THE R ECORDS ARE THAT THE ASSESSEE (RESPONDENT) IS A LIMITED COMPANY AND ENGA GED IN THE BUSINESS OF MANUFACTURING, REFINING AND TRADING OF OILS, DE-OILED CAKES & ALLIED PRODUCTS. DURING THE YEAR UNDER CONS IDERATION SURVEY ACTION WAS CARRIED OUT U/S 133A OF THE ACT O N 10.08.2011 DURING WHICH THE COMPANY ADMITTED ADDITIONAL INCOME OF RS. 3,39,57,000/- (ON ACCOUNT OF EXCESS CASH OF RS. 9,5 7,000/- AND ON ACCOUNT OF EXCESS STOCK OF RS. 3,30,00,000/-). THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-13 WAS FILED U/S 139(1 ) ON 30.09.2012 DECLARING TOTAL INCOME OF RS. 8,70,81,61 5/- (INCLUDING INCOME OF RS. 3,39,57,000/- DECLARED DURING THE COU RSE OF SURVEY PROCEEDINGS HELD ON 10.08.2011). 3. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS FO LLOWED BY SERVING OF STATUTORY NOTICE U/S 143(2) OF THE ACT A ND 142(1) OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE COMPANY FILED DETAILED WRITTEN SUBMISSIONS AND FILING DOCUM ENTS AND EVIDENCE AS REQUIRED BY THE LEARNED AO. BOOKS OF AC COUNTS ALONG WITH BILLS AND VOUCHERS WERE PRODUCED AND WERE VERI FIED ON TEST CHECK BASIS. 4. LD. AO MADE DEEPER ENQUIRY TO EXAMINE THE GENUIN ENESS OF PURCHASE OF RS. 2,42,90,382/- FROM M/S UNIQUE ENTER PRISES. VARIOUS INFORMATION WERE CALLED FOR IN THIS REGARD. STATEMENT OF MANAGING DIRECTOR MR. ANANDRAM HOTCHAND CHOTWANI WA S RECORDED. INCOME TAX INSPECTOR POSTED IN RANGE-1 IN DORE, WAS ALSO PRAKASH OIL LIMITED 3 DIRECTED TO FILE A REPORT AFTER VISITING THE BUSINE SS PREMISES OF M/S UNIQUE ENTERPRISES. FINALLY, LD. AO CAME TO A CONCL USION THAT THE ALLEGED PURCHASES OF RS.2,42,90,382/- MADE FROM M/S . UNIQUE ENTERPRISES ARE BOGUS AS THE ASSESSEE FAILED TO PR OVE THE GENUINENESS. HOWEVER, ADDITION WAS MADE TOWARDS SUP PRESSED SALES AT RS. 2,42,90,382/-. INCOME ASSESSED AT RS.1 1,13,71,997/-. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE T HE LD. CIT(A) AND SUCCEEDED. 6. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL RAISING FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE BY THE A O OF RS.2,42,90,382/- ON ACCOUNT OF BOGUS PURCHASES FROM M/S UNIQUE ENTERPRISES, INDORE WITHOUT APPRECIATING THE FACTS AND EVIDENCES BROUGHT INTO LIGHT BY THE AO DURING ASSES SMENT PROCEEDINGS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL BY HOLDING THAT THE AO OF SHRI PANKAJ PANWAR HAS NOT DOUBTED ON TRANSACTIO N WITH THE ASSESSEE, WHEREAS THE AO OF SHRI PANKAJ PANWAR WAS NOT AWARE OF ANY TRANSACTION WITH THE ASSESSEE BECAUSE SHRI PANKAJ PANWAR HAS NEITHER PRODUCED BOOKS OF ACCOUNT NOR VOUCHER FOR PURCHASE, SALE AND EXPENSES TO HIS AO. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED IN ALLOWING THE APPEAL BY IGNORING THE INSPECTORS REPORT OF AO OF SHRI PANKAJ PANWAR, PRO P. OF UNIQUE ENTERPRISES AS WELL AS REPORT OF INSPECTOR OF RANGE -1, INDORE IN WHICH BOTH THE INSPECTORS WERE REPORTED THAT ON THE GIVEN ADDRESS NO BUSINESS PREMISES OF THE SAID CONCERN WA S FOUND. PRAKASH OIL LIMITED 4 7. LD. DEPARTMENTAL REPRESENTATIVE(DR) ARGUED AT LE NGTH REFERRING TO THE FINDING OF LD. AO AND FURTHER SUBMITTING THA T DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON VARIOUS OCCASIO NS IT WAS OBSERVED BY THE ASSESSING OFFICER THAT THERE WAS NO ACTUAL TRANSACTIONS OF PURCHASE AND IT ALL APPEARED TO BE A BOGUS PURCHASE ENTERED IN THE BOOKS OF ACCOUNTS TO REDUCE THE PROF IT. MANAGING DIRECTOR OF THE COMPANY WAS NOT AWARE ABOUT THE TRA NSACTIONS WITH M/S UNIQUE ENTERPRISES. THE ALLEGED TRANSACTIONS LO OKS FISHY AS AGAINST THE PURCHASE OF RS. 2,42,90,382/- ONLY PAYM ENT OF RS. 49,238/- WAS MADE. IN THE INSPECTOR REPORT DATED 23 .03.2015 IT WAS STATED THAT THE PROPRIETOR OF M/S. UNIQUE ENTERPRIS ES WAS ACTUALLY DOING PART TIME ACCOUNTING WORK AND THERE WAS NO SU CH OFFICE OR GODOWN AT THE ADDRESS MENTIONED IN THE BILLS OF M/S . UNIQUE ENTERPRISES. LD. DR, ACCORDINGLY, RELIED THE FINDIN G OF LD. AO. 8. PER CONTRA, LD. COUNSEL FOR THE ASSESSEE REFERRE D TO THE WRITTEN SUBMISSIONS RUNNING FROM PAGES 1 TO 20 PLACED ON RE CORD. APART FROM RELYING ON THE FINDING OF LD. CIT(A) AND THE S UBMISSIONS MADE BEFORE HIM DURING THE APPELLATE PROCEEDINGS REFEREN CE WAS ALSO MADE TO THE POINT WISE REPLY TO THE COMMENTS OF THE ASSESSING OFFICER MENTIONED IN PARA 7.10 OF THE WRITTEN SUBMI SSIONS WHICH ARE REPRODUCED AS UNDER: SS.NO AOS OBSERVATIONS ASSESSEES COMMENTS 1. THE MD DID NOT KNEW THE DETAILS OF - THE RESPONDENT, HAVING A TURNOVER IN THE RANGE OF ABOVE 450 CRORES, PRAKASH OIL LIMITED 5 THE NAME OF THE OWNER OF UNIQUE ENTERPRISES HIS MOBILE NUMBER AND ADDRESS. TRANSACTED WITH LARGE NUMBER OF SUPPLIERS AND CUSTOMERS. THE MD OF THE COMPANY CANNOT BE EXPECTED TO MAINTAIN AND REMEMBER THE DETAILS OF MOBILE NUMBER, NAME OF THE OWNER OR PARTNER AND ADDRESS ETC OF A PARTY WITH WHOM MINISCULE TRANSACTION OF 2.43 CRORES (APPROX 0.50% OF TOTAL TURNOVER) WERE UNDERTAKEN, THAT TOO THREE YEARS AGO. THESE DETAILS WERE AVAILABLE IN THE PURCHASE BILLS FILED WITH THE AO. IT IS IMPORTANT TO POINT OUT THAT THE RESPONDENT HAD NO TRANSACTIONS WITH THE SAID CONCERN DURING LAST 3 YEARS. 2. THE DETAILS OF THE TRANSPORTER M/S OM SAI ROADLINES THROUGH WHICH MATERIAL PURCHASED / SOLD FROM / TO M/S UNIQUE ENTERPRISES WERE TRANSPORTED, - AGAIN SUCH DETAILS COULD NOT BE EXPECTED TO BE KEPT IN MEMORY BY THE MD OF A COMPANY WITH HUGE TURNOVER. HOWEVER, THESE COMPLETE DETAILS WERE AVAILABLE IN THE DOCUMENTS FILED BY THE ASSESSEE BEFORE THE AO. - IT IS SUBMITTED THAT THERE IS SELF CONTRADICTION IN THE STAND OF THE LEARNED AO AS ON ONE HAND HE WAS HAVING THE COMPLETE DETAILS OF THE TRANSPORTER M/S OM SAI ROAD LINES AS MENTIONED IN PARA 5.6 OF THE ASSESSMENT ORDER AND ON THE OTHER HAND IT HAS BEEN ALLEGED THAT THE DETAILS OF TRANSPORTATION WERE NOT PROVIDED. 3. THE MD WHO APPEARED WITH THE ACCOUNT HEAD FAILED TO GIVE ANY DETAILS IT IS SUBMITTED THAT THE LEARNED AO DID NOT ALLOWED ACCESS TO THE ACCOUNT HEAD OF THE BOOKS OF ACCOUNTS AND DOCUMENTS AND INSISTED PRAKASH OIL LIMITED 6 ABOUT THE SAID CONCERN. TO GIVE THE REPLIES ON THE BASIS OF MEMORY, WHICH WAS NOT POSSIBLE. 4 THE MD FAILED TO PRODUCE THE PARTNER / OWNER OF M/S UNIQUE ENTERPRISES. IT IS SUBMITTED THAT THE RESPONDENT CATEGORICALLY STATED VIDE POINT NO. 7 OF WRITTEN SUBMISSION DATED 09.03.2015 (COPY ENCLOSED AT PAGE NO. 55 OF PAPER BOOK) THAT IT HAD NO TRANSACTIONS WITH THE SAID CONCERN WHEN THE ASSESSMENT PROCEEDINGS WERE BEING CONDUCTED AND THEREFORE IT WAS NOT POSSIBLE TO ENSURE THE PRODUCTION OF THE PROPRIETOR OF THE SAID ENTITY. IT WAS ALSO REQUESTED THAT THE PERSONAL PRESENCE MAY BE SECURED BY USING VARIOUS POWERS VESTED UPON THE LEARNED AO UNDER THE INCOME TAX ACT. HOWEVER, WITHOUT MAKING ANY EFFORT ON HIS PART, THE LEARNED AO SIMPLY ALLEGED TIME AND AGAIN THAT THE RESPONDENT FAILED TO PRODUCE THE PROPRIETOR OF M/S UNIQUE ENTERPRISES. IT IS FURTHER SUBMITTED THAT AS EVIDENT FROM THE ASSESSMENT ORDER OF SHRI PANKAJ PAWAR, HE PRESENTED HIMSELF BEFORE HIS AO AND HIS STATEMENT WAS ALSO RECORDED. 5. IT IS ALSO ALLEGED THAT NO TRUCK NUMBER, NAME OF THE DRIVER OR OTHER TRANSPORTATION DETAILS WERE FURNISHED AND DETAILS REGARDING MOVEMENT OF GOODS WAS ALSO NOT FURNISHED. ON PERUSAL OF THE DOCUMENTS FILED, IT SHALL BE OBSERVED THAT DETAILS OF TRANSPORT VEHICLE HAVE BEEN MENTIONED IN THE MATERIAL BILL PASS NOTE. THE SAME IS ALSO MENTIONED IN THE WEIGHTIEST SLIP AND THE INWARD GATE PASS. THESE DOCUMENTS ARE PLACED ON PAGE 62 ONWARDS OF THE PAPER BOOK. HENCE THE CONTENTION OF PRAKASH OIL LIMITED 7 THE LEARNED AO THAT NO TRANSPORTATION DETAILS WERE FURNISHED ARE NOT CORRECT. 6. IT HAS BEEN STATED IN THE ASSESSMENT ORDER THAT THE WEIGHING SLIPS PRODUCED WERE MANUAL AND THE RESPONDENT COMPANY USED ELECTRONIC WEIGHING MACHINE. THE RESPONDENT WISHES TO PLACE ON RECORD THAT THIS OBSERVATION IS FACTUALLY INCORRECT AND ONLY A FIGMENT OF AOS IMAGINATION AS THE RESPONDENT DO NOT HAVE ANY ELECTRONIC WEIGHING MACHINE AND ALL SUCH SLIPS ARE GENERATED ONLY MANUALLY. HOWEVER, THIS ISSUE WAS NEVER CONFRONTED DURING THE ASSESSMENT PROCEEDINGS. 7. IT IS STATED IN THE ASSESSMENT ORDER THAT THE RESPONDENT WAS GIVEN FULL OPPORTUNITY TO SUBSTANTIATE ITS CLAIM OF PURCHASES HOWEVER THE RESPONDENT DID NOT FURNISH ANY DETAILS. IT IS SUBMITTED THAT THIS ALLEGATION IS FACTUALLY NOT CORRECT AS COMPLETE DETAILS AS REQUIRED BY THE LEARNED AO WERE FILED BY WAY OF WRITTEN SUBMISSION ALONG WITH SUPPORTING DOCUMENTS AND ARE ENCLOSED IN THE PAPER BOOK. IN THIS CONNECTION AT THE COST OF REPETITION, IT IS SUBMITTED THAT THE RESPONDENT COMPANY HAD DULY SUBMITTED COPY OF LEDGER ACCOUNT OF THE SAID PARTY, COPIES OF BILLS OF PURCHASE AND SALE OF THE ABOVE ITEMS ALONGWITH COPIES OF RAW MATERIAL BILL PASS NOTE, INWARD GATE PASS OF MATERIAL RECEIVED IN COMPANY, WEIGHTMENT SLIP OF MATERIAL PURCHASED FROM M/S UNIQUE ENTERPRISES AND COPIES OF OUTWARD GATE PASS OF MATERIAL DISPATCHED FROM COMPANY, WEIGHTMENT SLIP AND CHALLAN/ BUILTY SLIP OF TRANSPORTERS FOR MATERIAL DISPATCHED TO M/S UNIQUE ENTERPRISES WERE FILED DURING THE PRAKASH OIL LIMITED 8 COURSE OF ASSESSMENT PROCEEDINGS. THAT DETAILS AS REGARDS TRUCK NUMBER, CHALLAN NUMBER, TRANSPORTERS NAME, ADDRESS AND OTHER DETAILS WERE ALSO VERIFIED FROM ORIGINAL DOCUMENTS PRODUCED FOR EXAMINATION AND VERIFICATION AT THE TIME OF ASSESSMENT PROCEEDINGS. ALL THE SAID DOCUMENTS ARE ENCLOSED AT PAGE NO. 57 TO 348 OF THE PAPER BOOK. 9. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED T HAT THE SCRUTINY ASSESSMENT OF MR. PANKAJ PANWAR PROPRIETOR OF M/S. UNIQUE ENTERPRISES, WAS ALSO COMPLETED BY ITO 1(4), INDORE , AND THE SALES MADE TO THE ASSESSEE FIRM WERE ACCEPTED. HE ALSO ST ATED THAT THERE WAS FACTUAL ERROR IN THE FINDING OF ASSESSING OFFIC ER THAT THE ASSESSING OFFICER OF MR. PANKAJ PANWAR WAS NOT AWAR E OF THE TRANSACTIONS WITH THE ASSESSEE(RESPONDENT). HE STAT ED THAT THE ASSESSING OFFICER OF ASSESSEE(RESPONDENT) CALLED FO R THE ACCOUNT STATEMENT WITH M/S UNIQUE ENTERPRISES FROM THE ASSE SSING OFFICER OF MR. PANKAJ PANWAR ONLY. HE FURTHER BROUGHT TO OU R NOTICE THAT APART FROM THE PURCHASE MADE FROM M/S. UNIQUE ENTER PRISES THE ASSESSEE(RESPONDENT) MADE SALES ALSO TO M/S UNIQUE ENTERPRISE WHICH HAVE BEEN ACCEPTED. THEREFORE, THIS ACTION OF THE ASSESSING OFFICER IS NOT JUSTIFIED TO JUST QUESTION THE PURCH ASES AND NOT THE SALES AND THIS ITSELF PROVES THAT M/S.UNIQUE ENTERP RISES IS A GENUINE DEALER. FURTHER, LD. COUNSEL FOR THE ASSESS EE ALSO MADE SUBMISSION REGARDING IMPORTANT OBSERVATIONS EMERGIN G OUT OF THE ASSESSMENT PRAKASH OIL LIMITED 9 ORDER OF SHRI PANKAJ PANWAR PROPRIETOR M/S UNIQUE E NTERPRISES, INDORE AND THE SAME READS AS FOLLOWS: 1. ORDER FOR AY 2012-13 DATED 23.03.2015 IS PASSED U/S 1 43(3) BY ITO 1(4), INDORE AND THE ASSESSMENT ORDER IN THE C ASE OF THE RESPONDENT WAS PASSED ON 26.03.2015. 2. THE PROCEEDINGS WERE ATTENDED BY THE AUTHORIZED REPRESENTATIVE OF SHRI PANKAJ PAWAR FROM TIME TO TIM E - (OPENING PARA OF THE ASSESSMENT ORDER). 3. THE NATURE OF BUSINESS OF SHRI PANKAJ PAWAR IS STATE D TO BE THAT OF TRADING AND EXPORT OF COTTON, SOYA DOC AND O IL. THE RESPONDENT ASSESSEE HAS ALSO TRANSACTED WITH SHRI PA NKAJ PAWAR IN SOYA DOC AND OIL. 4. THE AO OF SHRI PANKAJ PAWAR ISSUED SUMMONS U,/S 131 T O HIM IN RESPONSE TO WHICH HE PRESENTED HIMSELF AND HIS STA TEMENT WAS RECORDED BY HIS AO. THIS FACT NEGATES THE INSPECTOR' S REPORT IN THE CASE OF THE RESPONDENT ASSESSEE AND ALSO THE CONTENT ION OF THE AO THAT SHRI PANKAJ PAWAR WAS NOT AVAILABLE. 5. IT IS STATED IN ANSWER TO QUESTION NO. 3 ON PAGE 2 OF HIS ASSESSMENT ORDER THAT HE WAS DOING THE BUSINESS OF T RADING IN SOYBEAN, DOC, OIL, COTTON AND IN REPLY TO QUESTION NO . 4 HE STATED THAT THIS BUSINESS WAS DONE BY HIM ONLY DURING THE FY 2011-12 I.E. AY 2012-13. 6. THOUGH HIS BOOKS OF ACCOUNTS R RE REJECTED HOWEVER, HIS SALES WERE ACCEPTED ON WHICH A NET PROFIT RATE OF 19LO WAS APPLIED. THE FACT REMAINS THAT THE SALES MADE BY SHRI PANKAJ PAWA R WERE ACCEPTED BY HIS AO DURING THE COURSE OF HIS REGULAR A SSESSMENT PROCEEDINGS. IN THIS PECULIAR CIRCUMSTANCE, THE PUR CHASES MADE BY THE RESPONDENT ASSESSEE FROM SHRI PANKAJ PAWAR OU GHT NOT TO HAVE BEEN DOUBTED. 7. THE ASSESSMENT ORDER U/S 143(3) OF SHRI PANKAJ PAWAR WAS PASSED ON 23.03.2015 WHEREAS THE ASSESSMENT ORDER BF THE RESPONDENT ASSESSEE WAS PASSED ON 26.03.2015 I.E. A FTER THE PASSING OF THE ORDER OF SHRI PANKAJ PAWAR. ANOTHER I MPORTANT FACT IS THAT THE ASSESSMENT ORDER WAS PASSED BY AN AO OF THE SAME RANGE, OF WHICH ANOTHER AO PASSED THE ASSESSMENT ORD ER OF THE RESPONDENT ASSESSEE. IT IS EQUALLY IMPORTANT TO NOT E THAT THE OFFICES OF BOTH THE AOS ARE LOCATED OPPOSITE TO EACH OTHER ON THE SAME FLOOR IN THE SAME BUILDING. 8. ANOTHER IMPORTANT FACT IS THAT THE AO OF THE RESPON DENT ASSESSEE HAS DOUBTED THE PURCHASE TRANSACTIONS WITH SHRI PANKAJ PAWAR ONLY ON THE BASIS OF SOME ALLEGED REPORT OF IT O L(4) (AO OF PRAKASH OIL LIMITED 10 SHRI PANKAJ PAWAR) THAT THE ACTUAL BUSINESS TRANSACT IONS OF SHRI PANKAJ PAWAR APPEARED SUSPICIOUS (PARA 5 OF THE ASSE SSMENT ORDER OF THE RESPONDENT ASSESSEE), BUT THE FACT REMA INS THAT HIS ASSESSMENT WAS COMPLETED ACCEPTING THE SALES TURNOVE R DECLARED BY HIM. IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT ONCE THE ASSESSMENT OF THE SUPPLIER PARTY SHRI PANKAJ PAWAR FOR THE SAME AS SESSMENT YEAR WAS COMPLETED U/S 143(3), DURING WHICH PROCEEDIN GS HE PERSONALLY APPEARED BEFORE HIS AO AND HIS STATEMENT W AS ALSO RECORDED AND ALSO IN VIEW OF THE FACT THAT THE SALES MADE BY SHRI PANKAJ PAWAR HAVE BEEN DULY ACCEPTED IN HIS OWN REGUL AR ASSESSMENT PROCEEDINGS, THE VERY BASIS OF DOUBTING T HE PURCHASE TRANSACTION OF THE RESPONDENT ASSESSEE WITH SHRI PAN KAJ PAWAR DOES NOT SURVIVE AND HAVE NO LEGS TO STAND. 10. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE PAPER BOOK FILED ON 06.11.2018 RUNNING FROM PAGES 1 TO 370 AND WRITTEN SUBMISSIONS FILED BEFORE AND DURING THE COURSE HEARING. THOUGH THE REVENUE HAS RAISED THREE GROUNDS OF APPEAL BUT THE SOLE ISSUE I S WITH REGARD TO THE PURCHASE OF RS.2,42,90,382/- MADE FROM M/S. UNI QUE ENTERPRISES, INDORE WHICH WERE HELD TO BE BOGUS BY THE ASSESSING OFFICER BUT THE ADDITION WAS DELETED BY THE LD. CIT (A). 11. THOROUGH GROUND NO.1 ADDITIONS DELETED BY THE L D. CIT(A) HAS BEEN CHALLENGED. IN GROUND NO.2 THE FINDING OF LD. CIT(A) HAS BEEN CHALLENGED THROUGH WHICH IT WAS HELD THAT THE ASSES SING OFFICER OF SHRI PANKAJ PANWAR HAS NOT DOUBTED THE TRANSACTIONS WITH THE ASSESSEE AND THROUGH GROUND NO.3 OF REVENUES APPEA L HAS CHALLENGED THE FINDING OF LD. CIT(A) OF IGNORING TH E INSPECTORS REPORT OF AO OF SHRI PANKAJ PANWAR. OVERALL, THE GE NUINENESS OF THE PRAKASH OIL LIMITED 11 PURCHASE OF RS.2,42,90,382/- MADE FROM M/S UNIQUE E NTERPRISES IS IN CHALLENGED BEFORE US. 12. WE FIND THAT DURING THE COURSE OF APPELLATE PRO CEEDINGS BEFORE THE LD. CIT(A) THE ASSESSEE MADE DETAILED SUBMISSIO NS ABOUT THE PURCHASE AND SALE TRANSACTIONS WITH M/S UNIQUE ENTE RPRISES, STATING THE GENUINE IGNORANCE OF THE MANAGING DIREC TOR ABOUT THE TRANSACTIONS WITH M/S UNIQUE ENTERPRISES WHICH WERE JUST 0.50% OF THE TOTAL TURNOVER OF THE ASSESSEE. COMPLETE DETAIL S OF DOCUMENTS OF PURCHASE OF RAW MATERIAL, INWARD GATE PASS, WEIGHTM ENT SLIP FILED. SUBMISSIONS WERE ALSO MADE WITH REGARD TO THE OBSER VATIONS OF THE ASSESSING OFFICER WHO ON ONE HAND DOUBTED THE PURCH ASE TRANSACTIONS MADE WITH M/S UNIQUE ENTERPRISES HOLDI NG IT TO BE BOGUS PURCHASE BUT TO THE CONTRARY NOT DOUBTING THE SALES MADE TO IT AND WHILE COMPUTING THE INCOME HAD MADE THE ADDI TION FOR SUPPRESSED SALES. 13. WE FURTHER OBSERVE THAT LD. CIT(A) AFTER GOING THROUGH THE SUBMISSIONS MADE BY THE ASSESSEE AS WELL AS DOCUMEN TARY EVIDENCES FILED IN SUPPORT OF GENUINENESS OF PURCHA SE AND THE PROOF OF MOVEMENT OF GOODS HELD THE PURCHASE WITH M/S. UN IQUE ENTERPRISES AS GENUINE AND DELETED THE ADDITIONS FO R BOGUS PURCHASE OBSERVING AS FOLLOWS: I HAVE GONE THROUGH THE ASSESSMENT ORDER AND THE DE TAILED SUBMISSIONS MADE BY THE APPELLANT. THE APPELLANT HAS SUBMITTED THAT THE ASSESSING OFFICER COMPLETELY IGNORED THE DOCUMENTS SUBMITTED (REFERENCE PARA 3.2 ABOVE) DURING THE ASSESSMENT PROCEEDINGS. THE TRANS ACTIONS OF THE APPELLANT WITH M/S. UNIQUE ENTERPRISES ARE AS UNDER : S.NO. PARTICULARS AMOUNT(IN RS.) 1. PURCHASES OF DOC MADE FROM M/S. 2,43,39,620/- PRAKASH OIL LIMITED 12 UNIQUE ENTERPRISES 2. LESS: SALES OF REFINED OIL TO M/S. UNIQUE ENTERPRISES 2,42,90,382/- NET PAYMENT MADE 49,238/- 4.1 THE APPELLANT HAS SUBMITTED THAT IT IS IMPORTANT TO NOTE THAT IT HAD NO TRANSACTIONS WITH THE SAID CONCERN DURING THE LAST 3 YEARS. FURTHER THE APPELLANT IS HAVING A TURNOVER OF ABOVE RS.450 CRORES AND HAS TRANSACTIONS WITH LARGE NUMBER OF SUPPLIERS AND CUSTOMERS. THE MD OF THE COMPANY NOT REMEMBERING THE DETAILS OF TRANSACTIONS OF RS.2.43 CRORES WITH A PARTY WHICH CONSTITUTES AB OUT 0.5% OF THE TURNOVER UNDERTAKEN THREE YEARS AGO, CANNOT BE VIEWE D ADVERSELY. 4.2 IT IS ALSO STATED THAT THE APPELLANT COULD NOT P RODUCE THE PARTNERS OWNER OF M/S UNIQUE ENTERPRISES AS IT HAD NO TRANSA CTIONS WITH THE SAID CONCERN WHEN THE ASSESSMENT PROCEEDINGS WERE BE ING CONDUCTED AND THEREFORE IT WAS NOT POSSIBLE TO ENSURE THE ATTENDANCE OF THE PROPRIETOR OF THE SAID ENTITY. 4.3 THE ASSESSING OFFICER OF M/S UNIQUE ENTERPRISES HAD ALSO ISSUE SUMMONS TO THE APPELLANT COMPANY AND THE REPLY WAS F ILED ON 09.03.2018 IN THE SAID REPLY ALSO IT WAS CLEARLY ST ATED THAT APPELLANT HAD PURCHASE SOYABEAN DOC YELLOW, RAPESEED DOC AND UN TOASTED SOYA DOC AS RAW MATERIAL FROM M/S UNIQUE ENTERPRISES AND SOLD SOYA REFINED OIL DURING THE PERIOD UNDER CONSIDERATION. THE ASSESSMENT ORDER OF RSHIR PANKAJ PAWAR PROP. M/S UN IQUE ENTERPRISES HAS BEEN PASSED BY ITO 1(4), INDORE ON 2 3.03.2015 U/S 143(3). IN THE SAID ORDER ONLY ADDITION MADE IS ON A CCOUNT OF 1% ON THE TOTAL SALES TURNOVER OF RS.11,83,50,318/-. NO A DVERSE INFERENCE HAS BEEN DRAWN ON THE TRANSACTIONS OF M/S UNIQUE ENT ERPRISES WITH THE APPELLANT COMPANY. IN VIEW OF THIS ASSESSMENT O RDER NO COGNIZANCE CAN BE TAKEN OF THE INSPECTORS REPORT ST ATING THAT M/S UNIQUE ENTERPRISES IS NOT CARRYING OUT BUSINESS ACT IVITIES AT ITS GIVEN ADDRESS 4.4 THE ASSESSING OFFICER HAS COMPLETELY DISREGARDED THE SALES OF REFINED ON MADE TO M/S UNIQUE ENTERPRISES. THE ADDIT ION HAS BEEN MADE ON ACCOUNT OF BOGUS PURCHASES OF RS.2,42,90,38 2/- WHICH IS THE AMOUNT OF SALES MADE TO M/S UNIQUE ENTERPRISES. THE PURCHASES DOC MADE FROM M/S. UNIQUE ENTERPRISES ARE RS.2,43,3 9,620/-. 4.5 IN VIEW OF THE DISCUSSIONS OF THE PRECEDING PAR AGRAPHS I AM OF THE OPINION THAT THE ASSESSING OFFICER WAS NOT JUST IFIED IN MAKING THE ADDITION ON ACCOUNT OF BOGUS PURCHASES FROM M/S UNI QUE ENTERPRISES AND ESPECIALLY IN VIEW OF THE FACT THAT THE ASSESSI NG OFFICER OF M/S. UNIQUE ENTERPRISES HAS NOT DOUBTED THE TRANSACTION W ITH THE PRAKASH OIL LIMITED 13 APPELLANT COMPANY. THE ADDITION OF RS.2,42,90,382/- IS THEREFORE, DELETED. GROUND NO.1 IS ALLOWED. 14. FROM PERUSAL OF THE FINDING OF LD. CIT(A) WE OB SERVE THAT THESE FINDINGS ARE PURELY BASED ON THE FACTS OF THE CASE AND DOCUMENTARY EVIDENCES PLACED BEFORE HIM AND SURROUNDING CIRCUMS TANCES. WE FIND THAT DURING THE YEAR UNDER APPEAL THE ASSESSEE HAS ENTERED INTO BOTH PURCHASE AND SALE TRANSACTIONS WITH M/S U NIQUE ENTERPRISES OF WHICH ONLY PURCHASES ARE DISPUTED BU T SURPRISINGLY SALES WERE ACCEPTED BY THE ASSESSING OFFICER. THE R ELEVANT DOCUMENTS IN SUPPORT OF TRANSACTIONS WITH M/S UNIQU E ENTERPRISES WERE FILED. (I) COPY OF LEDGER ACCOUNT OF THE SAID PARTY. (II) COPIES OF BILLS OF PURCHASE AND SALE OF THE ABOVE I TEMS. (III) COPIES OF MATERIAL BILL PASS NOTE, (IV) INWARD GATE PASS OF MATERIAL RECEIVED IN COMPANY, (V) WEIGHTMENT SLIP OF MATERIAL PURCHASED FROM M/S UNIQ UE ENTERPRISES. (VI) COPIES OF OUTWARD GATE PASS OF MATERIAL DISPATCHED FROM COMPANY, (VII) WEIGHTMENT SLIP AND CHALLAN/BUILTY SLIP OF TRANSPOR TERS FOR MATERIAL DISPATCHED TO M/S UNIQUE ENTERPRISES. 15. FURTHER, THE OBSERVATION OF THE ASSESSING OFFIC ER THAT MANAGING DIRECTOR OF THE COMPANY MR. ANANDRAM HOTCHAND CHOTW ANI WAS NOT AWARE OF THE TRANSACTIONS WITH M/S UNIQUE ENTER PRISES, DO NOT FIND MUCH MERIT AS TOTAL QUANTUM OF PURCHASE DURING THE YEAR IS JUST 0.5% OF THE TOTAL TURNOVER AND IT IS QUITE POS SIBLE THAT THE DETAILS OF EACH AND EVERY VENDER MAY NOT BE KNOWN T O THE OWNER WHO CARRIES OUT THE BUSINESS THROUGH HIS STAFF AND IN THE CASE OF HUGE TURNOVER SEPARATE STAFF ARE DESIGNATED FOR DIF FERENT WORKS. FURTHER IT IS ALSO NOT IN DISPUTE THAT THE ASSESSME NT FOR THE VERY PRAKASH OIL LIMITED 14 SAME YEAR WAS COMPLETED U/S 143(3) OF THE ACT IN TH E CASE OF SUPPLIERS M/S. UNIQUE ENTERPRISES PROPRIETOR PANKAJ PANWAR AND THE SALES MADE TO THE ASSESSEE CONCERN WAS ACCEPTED AND THE PROFIT ESTIMATE OF 1%. THE ASSESSING OFFICER OF PANKAJ PAN WAR HAS SUPPLIED THE COPY OF ACCOUNT OF M/S. UNIQUE ENTERPRISES TO T HE ASSESSING OFFICER OF THE ASSESSEE (RESPONDENT). MOST IMPORTAN TLY, BOTH SALES AND PURCHASES MADE DURING THE YEAR TO AND FROM M/S UNIQUE ENTERPRISES HAVE BEEN ACCEPTED. 16. FURTHER, WE FIND THAT THE ASSESSEES SALES AND CLOSING STOCK WERE ACCEPTED. BOOKS OF ACCOUNTS ARE NOT REJECTED. DURING THE COURSE OF SURVEY CONDUCTED U/S 133A OF THE ACT ON 1 0.08.2011, EXCESS STOCK WAS FOUND AND RS.3.30 CRORE WAS SURREN DERED TOWARDS EXCESS STOCK AND OFFERED TO TAX. THE ALLEGED PURCHA SE MADE FROM M/S UNIQUE ENTERPRISES WAS JUST FEW DAYS BEFORE THE DATE OF SURVEY AND HAD THESE PURCHASES WERE NOT ACTUAL AND BOGUS T HEN HOW COME THERE WAS AN EXCESS STOCK ON THE DATE OF SURVEY. TH IS FACT REMAINS UNDISPUTED AND UNANSWERED BY THE ASSESSING OFFICER AND EVEN BY THE LD. DR. 17. WE, THEREFORE, IN THE FACTS AND CIRCUMSTANCES O F THE CASE, ARE OF THE CONSIDERED VIEW THE LD. CIT(A) HAS RIGHTLY HELD THE PURCHASE FROM M/S. UNIQUE ENTERPRISES AT RS.2,42,90,382/- AS GENUINE AS THEY ARE FULLY SUPPORTED BY DOCUMENTARY EVIDENCES A ND THE FACT THAT EXCESS STOCK FOUND DURING THE COURSE OF SURVEY JUST FEW DAYS AFTER THE LAST PURCHASE WITH M/S. UNIQUE ENTERPRISE S WAS ACCEPTED BY THE SURVEY TEAM AND SURRENDER OF RS.3.30 CR. MAD E BY ASSESSEE PRAKASH OIL LIMITED 15 TOWARDS THE EXCESS STOCK SO FOUND AND OFFERED TO TA X. THE FACT THAT THE SALES TO M/S UNIQUE ENTERPRISES STANDS ACCEPTED AND ALSO SALES MADE BY M/S. UNIQUE ENTERPRISES TO ASSESSEE HAS BEE N ACCEPTED BY THE ASSESSING OFFICER OF M/S. UNIQUE ENTERPRISES AR E SUFFICIENT ENOUGH TO PROVE THAT REVENUE AUTHORITIES HAVE ACCEP TED THAT M/S UNIQUE ENTERPRISES IS NOT A BOGUS CONCERN. THEREFOR E, THE ADDITION FOR BOGUS PURCHASE MADE BY THE ASSESSING OFFICER SE EMS TO BE MADE PURELY ON SURMISES AND CONJECTURE AND THUS RIGHTLY HELD BY LD. CIT(A) THAT THERE IS NO IOTA OF EVIDENCE TO JUSTIFY IN BRINGING THE TRANSACTIONS HELD BY THE RESPONDENT IN THE REALM OF DOUBT. THUS, NO INTERFERENCE IS CALLED FOR IN THE FINDING OF LD. CI T(A). GROUND NO.1 OF REVENUES APPEAL IS DISMISSED. 18. AS REGARD GROUND NO.2 WE FIND NO MERIT IN THIS GROUND OF REVENUE THAT LD. AO OF MR. PANKAJ PANWAR WAS NOT AW ARE OF ANY TRANSACTIONS WITH THE ASSESSEE. THE FACT THAT THE A SSESSEE OFFICER OF THE ASSESSEE COMPANY HAS CALLED FOR THE ACCOUNT STA TEMENT OF M/S. UNIQUE ENTERPRISES FROM THE CONCERNED ASSESSING OFF ICER IS SUFFICIENT ENOUGH TO PROVE THAT THE LD. AO OF PANKA J PANWAR WAS AWARE OF THE TRANSACTIONS AND FURTHER HE HAS MADE A N ADDITION FOR ESTIMATED NET PROFIT ON THE TOTAL SALES INCLUDING T HE SALE MADE TO THE ASSESSEE COMPANY. THUS, GROUND NO.2 OF THE REVENUE S APPEAL IS DISMISSED. 19. AS REGARD GROUND NO.3 RAISED BY THE REVENUE THA T THE LD. CIT(A) IGNORED THE INSPECTOR REPORT THAT ON GIVEN ADDRESS, NO BUSINESS PREMISES OF THE SAID CONCERN WAS FOUND. WE FIND THA T LD. AO PRAKASH OIL LIMITED 16 REFERRED TO THE INSPECTOR REPORT DATED 23.03.3015 A ND ON 23.06.2015 THE ASSESSMENT HAS BEEN COMPLETED. IT IS NOT DISCERNABLE FROM THE RECORDS THAT WHETHER THE ALLEG ED INSPECTOR REPORT WAS CONFRONTED WITH THE RESPONDENT AT ANY TI ME, DURING THE PROCEEDINGS WHICH THUS, DEFIES THE PRINCIPLE OF NAT URAL JUSTICE. THE REPORT OF INSPECTOR IS DATED 23.03.2015 AND THE ALL EGED TRANSACTIONS ARE DURING F.Y.2011-12 BUT EVEN THEN IN THE INSPECT OR REPORT THERE IS MENTION THAT A PERSON NAMED PANKAJ PANWAR IS CAR RYING OUT SOME BUSINESS AT THIS ADDRESS. WE ARE OF THE VIEW T HAT THIS REPORT OF INCOME TAX INSPECTOR IS NOT EXHAUSTIVE AND IN NO W AY CONCLUSIVE AS DOES NOT CARRY ENOUGH STRENGTH TO BE USED AGAINS T THE ASSESSEE LOOKING TO THE SURROUNDING CIRCUMSTANCES AND EVIDEN CES SHOWING UNIQUE ENTERPRISES AS A GENUINE CONCERN WHICH REMAI NS UN- REBUTTED BY THE REVENUE AUTHORITIES. THUS, THE REVE NUE FAILS TO SUCCEED IN GROUND NO.3 ALSO. 20. IN THE RESULT, ALL THE THREE GROUNDS RAISED BY THE REVENUE ARE DISMISSED AND ITANO.488/IND/2017 IS DECIDED AGAINST THE REVENUE. ORDER WAS PRONOUNCED AS PER RULE 34 OF I.T.A.T. RUL ES 1963 ON 25.05.2021. SD/- (MADHUMITA ROY) SD/- (MANISH BORAD) JUDICIAL MEMBER A CCOUNTANT MEMBER INDORE; DATED : 25/05/2021 PATEL/PS PRAKASH OIL LIMITED 17 COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER ASSISTANT REGISTRAR, INDORE