ACIT - 1(1)(1), MUMBAI V. CANNON INDUSTRIES PVT. LTD., MUMBAI

ITA 6413/MUM/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1733 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 31-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: CIRCUMSTANCES OF CASE
• Keywords: Bogus purchase; Unexplained cash credit; Rejection of books of accounts; Business income; Opportunity of cross examination; Peak credit; Corroborative evidences
• Section: 142(1); 133A; 143(1); 201; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI RAJESH KUMAR , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 6413 /MUM/201 6 ( / ASSESSMENT YEAR: 20 11 - 12 ) ACIT - 1(1)(1) 579, AAYAKAR BHAWAN, M.K. ROAD, MUMBAI - 400020 . / VS. M/S. CANNON INDUSTRIES PVT. LTD. 109, CHURCHGATE CHAMBER, 5, NEW MARINE LINE, MUMBAI - 400020 . ./ ./ PAN/GIR NO. : AAACC2189D ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 06/ 0 3/2 01 9 / DATE OF PRONOUNCEMENT : 24 /05/ 201 9 / O R D E R PER AMARJIT SINGH, J M: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 01 . 07 .2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 02 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 20 1 1 - 1 2 . 2 . THE REVEN UE HAS RAISED THE FOLLOWING GROUNDS: - ' 1. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS.2,98,00,000/ - (MADE @ 3.88% OF SALES OF RS,76,66,80,006/ - AND RESTRICTING IT TO 0.17% - ON THE GROUNDS THAT NO DEFECTS WERE POINTED OUT IN THE BOOKS OF ACCOUNTS.? REVENUE BY : SHRI AWUNGSHI GIMSON (DR) ASSESSEE BY: SHRI V. K. TULSIYAN (AR) ITA NO. 6413/M/2016 A.Y.20 11 - 12 2 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION OF RS.2,98,00,000/ - WITHOUT APPRECIATING THE FACTS THAT AO HAS REJECTED THE BOOKS OF ACCOUNTS OF ASSESSEE AS NO PROPER BOOKS OF ACCOUNTS WERE MAINTAINED ,PURCHASE AND SALE BILLS OF DELHI UNIT WERE NOT PRODUCED, DETAILS OF HUGE CREDITS & DEBITS IN TWO BANK ACCOUNTS WERE FOUND TO BE NOT REFLECTED IN THE BOOKS OF ACCOUNTS OF ASSE SSEE COMPANY, AND ASSESSEE FAILED TO EXPLAIN THE TRANSACTIONS IN THE BOOKS OF ACCOUNTS?. 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS WAS RIGHT IN HOLDING THAT NP ADDITION MADE (A 0.17% IN EARLIER YEARS IN THE CASE O F THE ASSESSEE SHOULD BE MADE IN THIS YEAR IGNORING THE FACTS THAT NO SUCH FINDINGS WERE MADE IN THOSE YEARS AND EACH YEAR BEING SEPARATE UNIT THE AO WAS RIGHT IN MAKING ADDITION BASED ON NP OF COMPARABLE BUSINESS ENTITIES? 4. 'WHETHER ON THE FACTS AND CIR CUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) WAS RIGHT IN DELETING THE ADDITION OF PEAK CASH CREDIT OF RS.1,92,70,421/ ON THE GROUNDS THAT THE SAME WAS INCLUDED IN CASH SALES OF THE ASSESSEE COMPANY INCLUDED IN THE TOTAL SALES? 5. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN ACCEPTING THAT CASH CREDIT OF RS.1,92,70,421/ WAS INCLUDED IN CASH SALES OF THE ASSESSEE COMPANY, AND INCLUDED IN THE TOTAL SALES IN ABSENCE OF ANY SUPPORTING EVIDENCE PRODUCED BY THE A SSESSEE AND ALSO IGNORING THE FACTS THAT THE AO HAS GIVEN A FINDING IN HIS ORDER THAT THE CREDITS IN THE TWO BANK ACCOUNTS HAVE NOT BEEN REFLECTED IN THE BOOKS OF THE ASSESSEE? 6. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE 14. CIT(A ) WAS RIGHT IN DELETING THE ADDITION OF BOGUS CREDITORS OF RS. 141,11,87,980/ - IGNORING THE FACT THAT THE AO HAD GIVEN FINDING THAT ASSESSEE COMPANY FAILED TO FURNISH DETAILS OF THE CREDITORS AS ALSO THE CONFIRMATIONS THEREOF? 7. WHETHER ON THE FACTS AND C IRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN RELYING ON THE ITAT DECISION IN THE ASSESSEE'S OWN CASE FOR AY 2006 - 07 & 07 - 08 WHEN THE ISSUE BEFORE ITAT WAS OF BOGUS PURCHASES AND THE SAME WAS DECIDED IN FAVOUR OF ASSESSEE, AS THE QUANTIT ATIVE DETAILS OF SAID PURCHASES WERE MATCHED BY THE ASSESSEE, WITH THOSE OF SALES, AND NO SUCH ISSUES ARE INVOLVED PRESENTLY? .' 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 27 .09.201 1 DECLARING TOTAL IN COME TO THE TUN E OF RS.4,04,203 / - . ITA NO. 6413/M/2016 A.Y.20 11 - 12 3 THE RETURN WAS PROCESSED U/S 143(1) OF THE I.T. ACT, 1961. THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICES U/S 143(2) AND 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSI NESS OF TRADING & MANUFACTURING OF GARMENTS. IT HAS TWO BRANCHES, ONE AT LUDHIANA AND THE OTHER ONE AT NEW DELHI. IT CLAIMS TO HAVE A REGISTERED OFFICE AT 109, CHURCHGATE CHAMBERS, 5, NEW MARINE LINES, MUMBAI. THE DETAILS OF SALE AND PURCHASE OF THE ASSESS EE WERE CALLED BUT THE ASSESSEE FAILED TO PRODUCE THE SALE AND PURCHASE BILLS IN CONNECTION WITH THE DELHI UNITS, THEREFORE, THE BOOKS OF ACCOUNT OF THE ASSESSEE WAS REJECTED AND THE PROFIT RATIO ESTIMATED ON SALE IN SUM OF RS. 76.68 CRORES @ OF 3.88% WHICH WAS ASSESSED ON THE BASIS OF PROFIT RATE OF ZODIAC CLOTHING CO. LTD. THE INCOME OF THE ASSESSEE WAS ASSESSED @ OF 2.98 CRORES. ON PERUSAL OF THE BANK - STATEMENT OF THE ASSESSEE HUGE TRANSACTION WAS NOTICED AND PEAK CASH CREDIT WAS NOTICED TO THE TUNE OF RS .1,92,70,421/ - . SINCE THE BOOKS OF ACCOUNT WAS REJECTED , THEREFORE, THE PEAK CREDIT WAS ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSEE HAS ALSO SHOWN THE SALE OF PROPERTY TO M/S.MODAK DYEING & PRINTING CO. PVT. LTD. WHICH IS A GROUP CONCERN. THE ASSESSE E HAS COMPUTED CAPITAL GAIN. THE ASSESSEE FAILED TO ESTABLISH THE OWNERSHIP OF THE PROPERTY SO CAPITAL GAIN WAS REASSESSED TOTAL IN SUM OF RS.74,50,205/ - AND ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSEE HAS SHOWN THE CREDITORS AN AMOUNT OF RS.144,33,8 3,258/ - . THE ASSESSEE FAILED TO CONFIRMED THE TRANSACTION IN SUM OF RS.1,41,11,87,980/ - , THEREFORE, THE SAID AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSEE RAISED THE INVESTMENT IN MODAK DYEING & PRINTING CO. PVT. LTD. THE TOTAL IN SUM OF RS. 7,68,50,000/ - . THE ASSESSEE FAILED TO EXPLAIN THE TRANSACTION , THEREFORE, THE SAME WAS ADDED TO THE INCOME OF THE ASSESSEE AND THE TOTAL ITA NO. 6413/M/2016 A.Y.20 11 - 12 4 INCOME OF THE ASSESSEE TO THE TUNE OF RS. 1,60,30,57,377/ - . FEELING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE C IT(A) WHO ALLOWED THE CLAIM OF THE ASSESSEE, THEREFORE, THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE US. I SSUE NOS. 1 TO 3 : - 4. ALL THE ISSUES ARE INTER - CONNECTED, THEREFORE, ARE BEING TAKEN UP TOGETHER FOR ADJUDICATION. UNDER THESE ISSUES THE REVENUE H AS RAISED THE OBJECTION IN CONNECTION WITH THE DELETION OF THE ADDITION OF RS. 2,98,00,000/ - (MADE @ 3.88% OF SALES OF RS.76,66,80,006/ - ) WHICH WAS RESTRICTED TO THE EXTENT OF 0.17%. BEFORE GOING FURTHER, WE DEEM IT NECESSARY TO ADVERT THE FINDING OF THE CIT (A) ON RECORD.: - GROUND NO. 2 RELATES INCOME FROM BUSINESS OF RS.2,98,00,000/ - THE AO HAS ADDED SUM OF RS.2,98,00,000/ - AS INCOME FROM TRADING & MANUFACTURING AS DISCUSSED IN PARA 7 & 8 OF THE ASSESSMENT ORDER. THE AO STATED: THE ASSESSEE HAS RETURNED UNR EALISTICALLY LOW PROFIT COMPARED TO OTHER COMPANIES IN THE SAME TRADE. HENCE, THE AO HAD ADOPTED THE ESTIMATED NET PROFIT. ACCORDINGLY, THE AU ARRIVED AT NET PROFIT OF RS.2,98,00,000/ - I.E. 3.88% OF THE TOTAL SALES OF RS.76,68,00,000/ - . THE AR OF THE APPEL LANT ARGUES THAT THE ADDITION OF THE NP RATE @3.88% IS NOT TENABLE AND HAS SUBMITTED THE FOLLOWING SUBMISSION WHICH IS AS UNDER: I) THAT THE FACTS ABOUT THE MAKING ADDITION OF THE N.P. DIFFERENCES, AS PER SERIAL NO.1 ABOVE II) THAT THE LD AO HAD NOT POINTE D OUT ANY DEFECTS IN THE BOOKS OF ACCOUNT AND THE ACCOUNTS WERE ALSO NOT REJECTED BY THE LD AO, THEREFORE, NO ADDITION COULD HAVE BEEN MADE BY THE AO ONLY ON ACCOUNT LOW PROFIT RATE THE LOW J NP RATE: IN ABSENCE OF ANY COGENT REASONS ON THE BASIS OF DEFECT S IN BOOKS OF ACCOUNT. III) THE FALL IN NP RATE IS NOT CRITERIA OF REJECTING THE BOOKS OF ACCOUNTS. THE FALL IN NP RATE COULD FOR VARIOUS REASONS SUCH AS INCREASE IN PURCHASE ITA NO. 6413/M/2016 A.Y.20 11 - 12 5 PRICE, DECREASE IN THE MARKET PRICE OF FINISHED GOODS, INCREASE IN THE SELLING & OTHER EXPENSES DURING THE YEAR. IV) THE COMPARATIVE GROSS PROFIT AND NET PROFIT, NP RATES BASED ON TURNOVER OF THE ASSESSEE FOR THREE ASSESSMENT YEARS AS UNDER: ASSESSMENT YEAR SALES GROSS PROFIT G.P. RATE NET PROFIT N.P RATE 2009 - 10 2,300,800,364 11,640 ,991 0.51% 223,728 0.01% 2010 - 11 654,314,393 15,672,347 2.40% 232,768 0.04% 2011 - 12 766,680,006 2,63,19,608 3.43% 1,90,981 0.03% IN THE AY 2010 - 11 THE AO HAS COMPLETED ASSESSMENT BY ADOPTING AVERAGE N.P. OF 0.17%. ACCORDINGLY, AN AMOUNT OF RS.8,79,568/ - ADDED THE RETURNED INCOME OF THE ASSESSEE. THEREFORE, THE LD AO APPLIED N.P. RATE @3.88% IS NOT TENABLE. THE EXPLANATION GIVEN BY THE APPELLANT FOUND TO BE PLAUSIBLE EXPLANATION. SIMILARLY, FOR A.Y. 2010 - 11 IN ASSESSEE'S OWN CASE, THE AO HAD ADOPTED NP AT 0.17% OF TOTAL TURNOVER. HENCE, THE AO IS DIRECTED TO ADOPT NP AT 0.17% AS ADOPTED IN A.Y. 2010 - 11. THE SAID NP WORKS OUT TO RS.13,03,356/ - (0.17% OF 76,66,80,006/ - ACCORDINGLY, GROUND NO. 2 IS PARTLY ALLOWED. 5. ON APPRAISAL OF THE ABOVE MENTIONED ORDER , WE NOTICED THAT THE AO NOWHERE POINTED OUT ANY DEFECTS IN THE BOOKS OF ACCOUNT MAINTAINED BY ASSESSEE. BEFORE REJECTION , THE CIT(A) HAS CONSIDERED NET PROFIT AND THE LOSS OF THREE ASSESSMENT YEAR I.E. A.Y. 2009 - 10, 2010 - 11 & 2011 - 12. ADOPTING THE EXPLANA TION GIVEN BY ASSESSEE AND CONSIDERATION THE NET RATE OF THE 0.98% FROM THE LOSS YEAR, T HE CIT(A) HAS CONFIRMED THE ADDITION TO THE EXTENT OF 0.17% OF THE SALE OF RS.76,66,80,006/ - . THE FACTS ARE DISTINGUISHABLE AT THIS STAGE ALSO. THE CIT(A) HAS DECIDED T HE PROFIT RATIO ON THE BASIS OF T HE BOOKS OF ACCOUNT AND ALSO CONSIDER ING THE NET PROFIT OF THE THREE PRECEDING YEAR. WE NOWHERE FOUND ANY ILLEGALITY AND INFIRMITY OF ORDER PASSED BY THE CIT(A), THEREFORE, WE AFFIRM THE FINDING OF THE CIT(A) ITA NO. 6413/M/2016 A.Y.20 11 - 12 6 ON THIS ISSUE AND DECIDE THESE ISSUES IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NOS. 4 & 5: - 6. ISSUE NO. 4 & 5 IS IN CONNECTION WITH THE DELETION OF THE ADDITION OF PEAK CASH CREDIT IN SUM OF RS.1,92,70,421/ - . BEFORE GOING FURTHER, WE DEEM IT NECESSARY TO AD VERT THE FINDING OF THE CIT(A) ON RECORD.: - 8 GROUND NO.3 RELATED TO UNEXPLAINED CASH CREDITS OF RS.1,92,70,421/ - THE AO HAS ADDED RS.1,92,70,421/ - ON ACCOUNT OF PEAK CASH CREDIT IN THE BANK ACCOUNTS OF THE ASSESSEE. THE AR OF THE APPELLANT ARGUES THAT TH E 'THE ASSESSEE HAS CALCULATED PECK CASH CREDIT ON THE BASIS OF CASH RECEIVED/GENERATED BY CASH SALES AND DEPOSITED IN BANK OF BARODA AND KARNATAKA BANK THEREFORE CASH RECEIVED/GENERATED BY CASH SALES AND DEPOSITS/TRANSFERS INTO BANK ACCOUNTS CANNOT BE CON SIDERED FOR CALCULATION OF PEAK CASH CREDIT AND ADDITION LIABLE TO DELETED.' I HAVE GONE THROUGH THE ASSESSMENT ORDER AS WELL AS P & L A/C. OF THE APPELLANT COMPANY AS ON 31.03.2011 WHEREIN THE TOTAL SALES ADMITTED BY THE APPELLANT COMPANY IS AS RS. 76,66, 80,0064/ - AS PER SCHEDULE 1'. THE AR OF THE APPELLANT COMPANY HAS GIVEN THE BREAK - UP OF SALES WHICH IS AS UNDER : CREDIT SALES RS.74,19,89,376/ - CASH SALES RS. 2.46.90.630/ - TOTAL RS.76,66,80,006/ - THE AR OF THE APPELLANT ARGUES THAT ABOUT 1,9 2,70,421/ - PERTAINS TO CASH SALES WHICH IS DULY ACCOUNTED IN THE SALES TURNOVER. THEREFORE, IT CANNOT BE ADDED SEPARATELY. FURTHER, THE AR ARGUES THAT THE CASH SALES OF RS.1,92,70,421/ - WHICH WAS TREATED AS PEAK CASH CREDIT BY THE AO IS A FORM PART OF CASH SALES OF RS.2,46,90,630/ - OUT OF THE TOTAL SALES OF RS.76,66,80,006/ - AS NARRATED ABOVE. CONSIDERING THE ABOVE, EXPLANATION GIVEN BY THE AR OF THE APPELLANT AND ALSO ON EXAMINATION OF THE P & L A/C. AS PER SCHEDULE 'L', I AM OF THE OPINION THAT THE ABOVE ADDITION MADE OF RS.1,92,70,421/ - IS NOT JUSTIFIABLE ONE AND THEREFORE I DIRECT THE AO TO DELETE. ACCORDINGLY, GROUND NO.3 IS ALLOWED. ITA NO. 6413/M/2016 A.Y.20 11 - 12 7 7. ON APPRAISAL OF THE ABOVE SAID FINDING, WE NOTICED THAT THE CIT(A) HAS CONSIDERED THE TOTAL OF SALE IN SUM OF RS. 76,6 6,80,0064/ - AS PER SCHEDULE L. THE CREDIT SALE WAS IN SUM OF RS.74,19,89,376/ - AND CASH SALE WAS IN SUM OF RS.2,46,90,630/ - TOTAL IN SUM OF RS.76,66,80,006/ - . THE CONTENTION OF THE ASSESSEE IS THAT AN AMOUNT OF RS.1,92,70,421/ - PERTAINED TO THE CASH WHIC H WAS DULY ACCOUNTED IN SALE TURNOVER WHICH CANNOT BE ADDED SEPARATELY . C ASH SALE IN SUM OF RS.1,92,70,421/ - WAS CONSIDERED TO THE PART OF CASH SALE IN SUM OF RS.76,66,80,006/ - AS NARRATED ABOVE. ALL THE FACTS ARE MENTIONED IN P & L ACCOUNT OF THE ASSESSEE . SINCE THIS AMOUNT HAS ALREADY SHOWN IN THE TOTAL SALE, THEREFORE, THE CIT(A) HAS RIGHTLY DELETED THE SAID ADDITION. THIS ISSUE IS ALSO FACTUAL WHICH HAS BEEN CONSIDERED BY THE CIT(A) ON THE BASIS OF THE BOOKS OF ACCOUNT OF THE ASSESSEE. WHEN THE TOTAL SA LE OF THE ASSESSEE IS ALSO TAKEN INTO CONSIDERATION THAN ANY OTHER TRANSACTION IS NOT LIABLE TO BE CONSIDERED SPECIFICALLY IN THE SAID CIRCUMSTANCES WHEN THE EXPLANATION GIVEN BY THE ASSESSEE IS NOT FOUND UN - JUSTIFIABLE. FACTS AND CIRCUMSTANCES ARE NOT DI STINGUISHABLE AT THIS STAGE ALSO, THEREFORE, TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WITH AT THIS APPELLATE STAGE. ISSUE NOS. 6 &7 - 8. ISSUE NO. 6 & 7 IS IN CONNECTION WITH THE DELETION OF THE ADDITION BOGUS CREDITORS IN SUM OF RS.141,11,87,980/ - . BEFORE GOING FURTHER, WE DEEM IT NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD.: - ITA NO. 6413/M/2016 A.Y.20 11 - 12 8 10. GROUND NO. 5 RELATE S TO ADDITION OF RS.141,11,87,980/ ON ACCOUNT OF BOGUS CREDITORS. THE AO HAS ADDED SUM OF RS.141,11,87,980/ - ON ACCOUNT OF BOGUS CREDITORS AS THE ASSESSEE WAS ASKED TO FURNISH THE CONFIRMATION LETTER FROM ALL THE CREDITORS WITH CREDIT BALANCE OF RS.10 LAK H AND ABOVE. HOWEVER, THE ASSESSEE HAD FAILED THE PROVE THE GENUINENESS OF THE CREDITORS. VIDE LETTER DT. 29.06.2016, THE ASSESSEE HAS STATED AS UNDER: 'THAT THE SIMILAR ISSUE HAD BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY HONBLE ITAT BENCH MUMBAI FOR A.Y. 2006 - 07 AND 2007 - 08 FOR ASSESSMENT YEAR 2006 - 07 GROUND NO. 2 & 3 ARE REGARDING ADDITION ON ACCOUNT OF BOGUS PURCHASES. 3.6 WE HAVE NOTE THAT THE ASSESSEE HAS PLACED ON RECORD THE DETAILS AND SHOWN FROM THE PURCHASES BILLS THAT PURCHASES ARE MATCHED WIT H THE EXPORT SALE IN THE CASE OF TRADING OF GOODS FOR PURPOSE OF EXPORT AND THEREFORE, THERE IS NO: SCOPE OF ANY DOUBT ABOUT THE PURCHASES WHICH ARE DIRECTLY MATCHING TO THE SALE (EXPORT) EVEN OTHERWISE, WHEN THE SALES AND ALL OTHER QUANTITATIVE DETAILS AN D FIGURE REGARDING STOCK ARE ACCEPTED BY THE ASSESSING OFFICER THEN IN ABSENCE OF ANY DIRECT EVIDENCE SHOWING THE NON - GENUINENESS OF PURCHASES IN QUESTION. THE ADDITION IS NOT SUSTAINABLE ON BASIS OF ASSUMPTION AND CONJECTURE RELYING ON THE ]BUR STATEMENTS RECORDED U/S 133A AND THAT TOO WITHOUT AFFORDING AN OPPORTUNITY OF CROSS EXAMINATION TO THE ASSESSEE. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT ADDITION IN QUESTION ON ACCOUNT OF BOGUS PURCHASES IS NOT SUSTAINABLE AND ACCORDINGLY THE SAME IS DELETED. FOR ASSESSMENT YEAR - 2007 - 08 GROUND NO. 6 ARE REGARDING ADDITION ON ACCOUNT OF BOGUS PURCHASES. 12.5 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND RELEVANT MATERIAL ON RECORD. 7' A0 MADE ADDITION BY SUSPECTING THE PURCHASES O N THE GROUND THAT THE ASSESSEE H SHOWN THE PURCHASES FROM THESE PARTIES WITHOUT MAKING ANY PAYMENT DURING THE YEAR. THE CIT(A) HAS CONFIRMED THE ADDITION MADE BY THE AO BY FOLLOWING THE RECORD FOR A.Y 2006 - 07. THOUGH THE IMPUGNED ORDER OF CIT(A) IS SUSTAIN ABLE BECAUSE WE HAVE ALREADY GIVEN THE FINDING ON ISSUE OF BOGUS PURCHASES FOR A. Y. 2006 - 07, WHEREBY TJ ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES HAS BEEN DELETED, HOWEVER, IN THE FACTS THE CASE EXCEPT ONE PARTY WHICH IS COMMON FOR BOTH THE A. YRS. NAME LY SPS ENTERPRISE AND OTHER PARTIES ARE ITA NO. 6413/M/2016 A.Y.20 11 - 12 9 NOT SUBJECT MATTER FOR THE A. Y. 2006 - 07 WE FIND THAT TREATED THE PURCHASES FROM THESE PARTIES AS BOGUS WITHOUT DISPUTING THE QUANTITATIVE DETAILS AND PURCHASES, STOCK AND SALES IS NOT JUSTIFIED. ACCORDINGLY, IN VIEW OF A.Y. 2006 - 07, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE.' GROUND NO. 7 IS REGARDING DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASES OF THE EARLIER YEARS. 'WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND RELEVANT MATERIAL ON RECORD. SINCE T, ISSUE FOR A.Y. 2006 - 07 HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE, THEREFORE, T, DISALLOWANCE MADE BY AUTHORITIES BELOW RELYING UPON THE ORDERS FOR A. Y. 2006 - 07 IS N SUSTAINABLE AND ACCORDINGLY DELETED.' THE ABOVE EXPLANATION GIVEN BY THE APPELLANT IS FOUND TO BE ACCEP TABLE. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE ITAT VIDE ITA NO. 5410/MUM/2011 FOR THE AS. 2006 - 07 AND ITA NO.5411/MUM/2011 FOR A.Y.2007 - 08 DATED 17.10.2014, I AM OF THE CONSIDERATE OPINION THAT THE ABOVE ADDITION ON ACCOUNT OF BOGUS CREDITORS IS TO BE DELETED. ACCORDINGLY, GROUND NO. 5 IS ALLOWED. 9 . ON APPRAISAL OF THE ABOVE SAID FINDING, WE NOTICED THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY ON THE BASIS OF DECISION OF HONBLE ITAT IN THE ASSESSEES OWN CASE IN ITA. NO.5410/M/2011 FOR THE A.Y.2006 - 07 AND ITA. NO.5411/M/2011 FOR THE A.Y. 2007 - 08 DATED 17.10.2014, THEREFORE, IN THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) HAS DECIDED THE MATTER OF CONTROVERSY JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERE WIT H AT THIS APPELLATE STAGE, THEREFORE, WE AFFIRM THE FINDING OF THE CIT(A) ON THIS ISSUE AND DECIDE THESE ISSUES IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ITA NO. 6413/M/2016 A.Y.20 11 - 12 10 10 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS HEREBY ORDERED TO BE D ISMISSED . ORDER PR ONOUNCED IN THE OPEN COURT ON 24 /05/2019 SD/ - SD/ - ( RAJESH KUMAR ) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICI AL MEMBER MUMBAI; DATED : 24/ 05/2019 V IJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI