Rajoo Cotex Ltd, RAJKOT-GUJARAT V. The Assistant Commissioner Of Income Tax, Junagadh Circle I, JUNAGADH

ITA 67/RJT/2011

• Counselvise Citation: [2012] 120 COUNSELVISE.COM (IT) 0183 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-09-2012
• Assessment Year: 1997-1998
• Appeal Filed On: 03-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: M N MANVAR
• Keywords: Bogus purchase; Depreciation; Search and seizure; Loose papers
• Section: 69; 132

Judgement Text

ITA NO.67/RJT/2011. . 1 , IN THE INCOME TAX APPELLATE TRIBULAL; RAJKOT BENCH, RAJKOT. . .. . . .. . , , , , . .. . . .. . , , , , $ $ $ $ BEFORE SHRI T. K. SHARMA, JM AND SHRI D. K. SRIVAST AVA, AM ITA NO.67/RJT/2011. / ASSESSMENT YEAR 1997-98 RAJOO COTEX LTD., C/O M.N.MANVAR &CO., CHARTERED ACCOUNTANT 504-STAR PLAZA, PHUCHHAB CHOWK RAJKOT, PAN: AAPCRO128E ( * / APPELLANT) VS. ASSISTANT. COMMISSIONER OF INCOME TAX, JUNAGADH CIRCLE-1, +,* / RESPONDENT -. / ASSESSEE BY SHRI M.N.MANVAR . / REVENUE BY SHRI AVINASHKUMAR . / DATE OF HEARING 24.9.2012 . / DATE OF PRONOUNCEMENT 28.9.2012 / / / / ORDER . .. . . . . . , , , , / T. K. SHARMA, J. M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 26.11.2010 OF C IT(A)-RAJKOT FOR THE ASSESSMENT YEAR 1997-98. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS A CO MPANY ENGAGED IN THE MANUFACTURING AND TRADING OF COTTON AND C OTTONSEED FROM UN- GINNED COTTON AND ALSO CARRIED OUT TRADING BUSINESS IN COTTON. FOR THE ASSESSMENT YEAR UNDER APPEAL, IT FILED RETURN OF I NCOME ON 28.11.1997 DECLARING TOTAL LOSS OF RS.38,35,319/-. THE COPY OF PROFIT AND LOSS ITA NO.67/RJT/2011. . 2 ACCOUNT, BALANCE SHEET, CAPITAL ACCOUNT AND AUDIT REPORT AS REQUIRED U/S 44AB OF THE ACT WERE ALSO FILED ALONG WITH THIS RETURN OF INCOME. A SEARCH ACTION U/S 132 OF THE INCOME TAX ACT, 1961 W AS CARRIED OUT AT THE BUSINESS PREMISES IN THE CASE OF SHRI NIKUNJ K SHAH AND JITENDRA K SHAH OF AHMEDABAD ON 24.9.1997. IT WAS FOUND TH AT THESE PERSONS WERE ISSUING BOGUS BILLS TO VARIOUS PARTIES WHICH INTER ALIA INCLUDES M/S CHOKSHI TRADING CO. FROM WHICH THE ASSESSEE SHO WN PURCHASES OF ELECTRICAL ITEMS WORTH RS.15,74,780/-. 3. ON THE BASIS OF ABOVE, DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE TO FURNISH I TS EXPLANATION/OBJECTION AS TO WHY THE PURCHASES OF RS .15,74,780/- MADE FROM M/S CHOKSHI TRADING COMPANY SHOULD NOT BE AD DED CONSIDERING THE BOGUS TRANSACTIONS. THE ASSESSEE VIDE ITS LETT ER DATED 11.2.2004 REQUESTED TO GIVE XEROX COPIES OF DOCUMENTS/PAPERS ON WHICH THE AO INTENDS TO RELY. ALL THE DOCUMENTS WHICH WERE RECE IVED FROM THE CONCERNED AO, AHMEDABAD WHO IS HOLDING JURISDICTIO N OVER SHRI N K SHAH AND SHRI J.K.SHAH HAVE BEEN SUPPLIED TO THE A SSESSEE. TO THE ABOVE SAID REQUEST THE ASSESSEE VIDE LETTERS DATED 15.1.2004, 26.2.2004 AND 8.3.2008 FURNISHED DETAILED EXPLANATI ON WHICH IS ENUMERATED BELOW : (I) IT IS STATED THAT THE COMPANY HAS PURCHASED EL ECTRICAL CABLES FROM TIME TO TIME DURING F.Y. 1996- 97 FOR T HE PURPOSE OF SETTING UP THE FACTORY AT VILLAGE SANOSARA TA.MANAV ADAR, WHICH STARTED ITS COMMERCIAL PRODUCTION FROM 01-02-1997. (II) THE CABLES PURCHASED BY THE COMPANY ARE ACCOUN TED IN BOOKS OF THE COMPANY AND THE PAYMENTS ARE BY DEMAND DRAFTS DRAWN FROM STATE BANK OF SAURASHTRA. THE DETAILS OF INVOICES AND PAYMENTS THEREOF ALONG WITH COPIES OF INVOICES AND BANK STATEMENTS ATTACHED AS PER ANNEXURE- A ITA NO.67/RJT/2011. . 3 (III) THE COMPANY HAS AVAILED TERM LOAN FROM GIIC LTD., THE STATE BANK OF SAURASHTRA AND AS PER THE PROJECT COM PLETION CERTIFICATE ISSUED BY GIIC LTD., THE UNIT HAS CREAT ED ASSETS FOR THE PROJECT FINANCED BY THEM, WHICH INCLUDES PLANTS AND MACHINERY OF RS.392.40 LACS. THE FIGURE OF PLANTS A ND MACHINERY INCLUDES ELECTRIFICATION COST OF RS.47,57 ,023/-. IN THE SAID ELECTRIFICATION COST, THE PURCHASE OF ELECTRIC AL CABLES OF RS.15,74,700/- FROM M/S. CHOKSHI TRADING CO. IS NC LUDED. THE COMPANY HAS SUBMITTED TO GIIC LTD., CA CERTIFICATE FOR CREATION OF ASSETS PAYMENT THEREOF, WHICH IS PHYSICALLY VERI FIED BY THE CHARTERED ACCOUNTANTS AND THEREAFTER, CARRYING OUT VERIFICATION AND INSPECTION OF ALL ASSETS BY PERSONAL VISIT BY O FFICIALS OF GIIC LTD. PROJECT COMPLETION CERTIFICATE CERTIFYING THE CREATION OF ASSETS IS ISSUED TO THE COMPANY. THE PROJECT COMPLETION CERTIFICATE ISSUED BY GIIC LTD. ESTABLISHED THAT THE ASSETS ARE CREATED AND PAYMENT ARE GENUINE AND' HENCE THERE IS NO BOGUS PURCHASE FROM M/S CHOKSHI TRADING CO. IV) FURTHER IN RESPONSE TO LETTER DATED 11-02-20 04 REQUESTING TO SUPPLY THE XEROX COPIES, THE STATEMENT OF SHRI N IKUNJ K. SHAH AND SHRI JITENDRA K. SHAH TAKEN UNDER OATH BY I.T.D EPARTMENT, ZEROX COPIES OF BANK SLIP OF STATE BANK OF SAURASTR A FOR DRAWING DEMAND DRAFT FROM THE BANK FOR PAYMENT TO M/S CHOK SHI TRADING CO., WE HAVE GONE THROUGH THE STATEMENT ISS UED BY THE ABOVE NAMED PERSONS BUT NOT FOUND CONFESSION OF BOG US SALES TO THE ASSESSEE COMPANY BY ANYONE OF THEM. THEREFOR E, THERE IS NO EVIDENCE IN SUPPORT OF THE CLAIM OF BOGUS PURCHA SES MADE. 4. AFTER CONSIDERING THE SAID EXPLANATION, THE AO IN THE ASSESSMENT ORDER MADE ADDITION OF RS.15,74,700/- IN RESPECT OF BOGUS ELECTRICAL ITEMS PURCHASES ALSO ON THE VALU E OF ELECTRIFICATION AMOUNTING TO RS.15,74,780/- MADE FROM M/S CHOKSHI TRADING CO.. 5. ON APPEAL, IN THE IMPUGNED ORDER THE LD. CIT(A) CONFIRMED THE DISALLOWANCE OF ADDITION OF RS.15,74,700/- AND DEP RECIATION THEREON ON RS.1,98,847/- FOR THE DETAILS REASONS GIVEN IN PARAGRAPHS 4.3 TO 5 OF HIS FINDINGS WHICH READS AS UNDER : 4.3 I HAVE CAREFULLY CONSIDERED THE FINDINGS GIVEN BY THE AO AND THE SUBMISSION OF THE AR OF THE APPELLANT. IT WAS REVEALED DURING THE COURSE OF SEARCH ACTION UNDER SECTION 132 OF THE ACT AT THE BUSINESS PREMISES OF SHRI NIKUNJ SHAHS AND S HRI JITENDRA SHAH AT AHMEDABAD THAT THESE PERSONS WERE ISSUING BOGUS ITA NO.67/RJT/2011. . 4 BILLS, CREATED BOGUS ENTITIES, AND ADMITTED IN THEI R STATEMENTS ON OATH THE ENTIRE MODUS OPPERANDI IN THIS REGARD A S WELL AS OTHER FACTS RELATED TO THE BUSINESS OF BOGUS BILLIN G. THE AO HAS ALSO MENTIONED IN PARA 4 OF HIS RE-ASSESSMENT ORDER THAT THE AO WARD 3(3), AHMEDABAD INTIMATED THAT M/S CHOKSI TRADING CO. IS FOUND TO BE A BOGUS FIRM FLOATED BY SHRI N .K.SHAH AND SHRI J.K. SHAH, WHO WERE ISSUING BOGUS BILLS AND N O GENUINE TRANSACTIONS WERE TAKEN PLACE. THUS, ON THE BASIS OF THE ABOVE FACTS, IT CAN BE CONCLUDED THAT THE TRANSACTION OF THE APPELLANT WITH M/S CHOKSI TRADING CO WAS NOT A GENUINE TRAN SACTION. THEREFORE, I AM IN AGREEMENT WITH THE FINDING GIVEN BY THE AO IN PARA-7 OF HIS RE-ASSESSMENT ORDER, MADE AFTER AN ALYZING THE SUBMISSIONS OF THE APPELLANT I AM AFRAID THAT THE JUDICIAL DECISION RELIED UPON BY THE AR OF THE APPELLANT MAY NOT HELP THE APPELLANT. THE ADDITION OF RS.15,74,700/- IS HERE BY CONFIRMED. THIS GROUND OF APPEALS IS DISMISSED. 5. IN THE THIRD GROUND OF APPEAL THE APPELLANT HAS CHALLENGED THE AOS ACTION OF MAKING DISALLOWANCE OF RS.1,98,847/- BEING DEPRECIATION ON ALLEGED BOGUS P URCHASES OF ELECTRICAL ITEMS FROM M/S CHOKSHI TRADING CO. AHMED ABAD. THE AO HAS DISCUSSED THIS ISSUE ON PAGE -3 IN PARA 8 OF THE REASSESSMENT ORDER. DURING THE COURSE OF RE-ASSES SMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSES HAS CLAIMED DEPRECIATION OF RS.4,19,031/- ON THE ELECTRIFICATI ON VALUE OF RS.33,52,250/-. AS DISCUSSED IN THE PRECEDING PARAG RAPHS, THE ASSESSEE PURCHASED ELECTRICAL ITEMS WORTH RS.15,74 ,780/- FROM M/S CHOKSHI TRADING CO. WHICH WAS HELD TO BE A BO GUS AND NON-GENUINE TRANSACTION, AND THEREFORE, THE AO VIEW ED THAT THE DEPRECIATION ALLOWED ON TOTAL VALUE OF ELECTRIFICAT ION HAS TO BE WITHDRAWN ON PROPORTIONATE VALUE OF THE PURCHASE OF RS.15,74,780/- FROM M/S CHOKSHI TRADING CO. ACCOR DINGLY, THE AO DISALLOWED EXCESS DEPRECIATION OF RS.1,98,847/- 5.1 IN THE WRITTEN SUBMISSION, THE AR OF THE APPEL LANT REITERATED THE CONTENTIONS PUT FORTH IN RESPECT OF ADDITION OF RS.15,74,700/-, AS DISCUSSED IN THE PRECEDING PARA GRAPHS. 5.2 I HAVE CAREFULLY CONSIDERED THE FINDING GIVEN B Y THE AO AND THE SUBMISSION OF THE AR OF THE APPELLANT. AS I HAVE HELD IN PARAGRAPH 4.3 ABOVE THAT THE TRANSACTION OF THE APP ELLANT WITH M/S CHOKSI TRADIGN CO. WAS NOT A GENUINE TRANSACTI ON, I AM IN AGREEMENT WITH THE FINDING GIVEN BY THE AO IN PARA -8 OF HIS REASSESSMENT ORDER, AND THUS, THE DISALLOWANCE OF RS.1,98,847/- IS HEREBY CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. 6. AGGRIEVED WITH THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL ON THE FOLLOWING GROUN DS: ITA NO.67/RJT/2011. . 5 1. THE CIT(A) HAS ERRED IN LAW AS WELL AS IN FACTS IN MAKING ADDITION OF RS.15,74,700/- AS ALLEGED BOGUS PURCHA SE OF ELECTRICAL ITEMS FROM M/S CHOKSHI TRADING CO. AHME DABAD. 2. THE CIT(A) HAS ERRED IN LAW AS WELL AS IN FACTS IN MAKING DISALLOWANCE OF RS.1,98,847/- BEING, DEPRECIATION ON ALLEGED BOGUS PURCHASES OF ELECTRICAL ITEMS FROM M/S CHOK SHI TRADING CO. AHMEDABAD. 7. AT THE TIME OF HEARING BEFORE US, SHRI M.N.MANV AR, APPEARED ON BEHALF OF THE ASSESSEE AND POINTED OUT THAT THE ASSESSEE FIRM HAD PURCHASED ELECTRICAL ITEMS AND PAYMENT THEREOF IS M ADE BY DEMAND DRAFT/CHEQUE. THE PURCHASES AS WELL AS PAYMENT IS DULY ACCOUNTED IN THE BOOKS OF ACCOUNT. THE ONLY GROUND FOR TREATING THE PURCHASES OF THE ELECTRICAL ITEMS IS BOGUS AND NONE-GENUINE IS ON THE BASIS OF THE STATEMENT OF THE THIRD PARTY I.E. SHRI NIKUNJ SHAH S AND SHRI JITENDRA SHAH WHO WERE SEARCHED U/S 132 OF THE ACT AND THEI R STATEMENTS WERE RECORDED U/S 132(4) OF THE ACT. HE POINTED OUT T HAT THE AO HAS NOT POINTED OUT ANY DISCREPANCY IN THE BOOKS OF ACCOUNT . THE AO HAS NO EVIDENCE TO PROVE THAT THE ASSESSEE HAS TAKEN CASH FROM THESE TWO PERSONS THE LD. COUNSEL FURTHER POINTED OUT THAT T HE ASSESSEE ASKED THE AO TO GIVE PARTICULARS OF CROSS-EXAMINATION OF M/S CHOKSHI TRADING COMPANY VIDE LETTER DATED 11.3.2004 BUT THE AO HAS NOT ALLOWED THE ASSESSEE TO CROSS-EXAMINE THE SAID THIR D PARTY. UNDER THESE CIRCUMSTANCES, ON THE BASIS OF PRESUMPTION AN D ASSUMPTION, THE ADDITIONS CANNOT BE MADE AS HELD BY THE HONBL E GUJARAT HIGH COURT IN THE CASE OF PRARTHNA CONSTRUCTION (P) LTD . V/S DCIT (2001) 70 TTJ 122(AHD), IN WHICH IT HAS BEEN HELD THAT LOOSE PAPERS AND DOCUMENTS CONTAINING NARRATION OF ALLEGED UNDISCLOS ED TRANSACTION OF ITA NO.67/RJT/2011. . 6 THE ASSESSEE SEIZED FROM THE PREMISES OF THIRD PART Y AND STATEMENT OF THE SAID PARTIES RECORDED AT THE BACK OF ASSESSEE C OULD NOT BE MADE THE BASIS OF MAKING ADDITION. IT WAS ALSO OBSERVE D THAT LOOSE PAPERS AND DOCUMENTS CANNOT BE CONSTRUED AS BOOKS OF ACCOU NT AND THEREFORE, SAME IS OUTSIDE THE PURVIEW OF THE SETIO N 34 OF THE EVIDENCE ACT. THE PRESUMPTION U/S 132(4A) WOULD NOT BE APPLI CABLE TO A THIRD PARTY FROM WHOSE POSSESSION SUCH PAPERS AND DOCUMEN TS HAVE NOT BEEN FOUND. HE ALSO POINTED OUT THAT IN THIS CASE, IT IS HELD THAT WHEN THE ASSESSEE MADE PURCHASES THROUGH PAYMENT MADE BY CHEQUE, THE AO CANNOT TREAT THE AMOUNT OF SUCH PURCHASES AS INCOME OF THE ASSESSEE ON THE BASIS OF MERE STATEMENT OF SELLER A ND THEY HAVE ISSUED BOGUS VOUCHERS. 8. IN THIS VIEW OF THE MATER, THE LD. COUNSEL FOR T HE ASSESSEE FURTHER RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V/S SMT.P.K.NOORJAHAN (1977) 11 SCC 198, 201 I N WHICH IT HAS BEEN HELD THAT UNSATISFACTIORINESS OF THE EXPLANATI ON DOES NOT AND NEED NOT AUTOMATICALLY RESULT IN DEEMING THE VALUE OF THE INVESTMENT TO BE THE INCOME OF THE ASSESSEE. THAT IS STILL A MATTER WITHIN THE DISCRETION OF THE OFFICER. IN OTHER WORDS, A DISCRE TION HAS BEEN CONFERRED ON THE ITO UNDER SECTION 69 TO TREAT THE SOURCE OF INVESTMENT AS THE INCOME OF THE ASSESSEE IF THE EXP LANATION OFFERED BY THE ASSESSEE IS NOT FOUND SATISFACTORY AND THE SAID DISCRETION HAS TO BE EXERCISED KEEPING IN VIEW THE FACTS AND CIRCUMSTANC ES OF THE PARTICULAR CASE. THE ITO IS NOT OBLIGED TO TREAT THE VALUE OF INVESTMENT AS INCOME IN EVERY CASE WHERE THE EXPLANATION OFFERED BY THE ASSESSEE IS ITA NO.67/RJT/2011. . 7 FOUND TO BE NOT SATISFACTORY, THE PHRASEOLOGY OF SE CTION 69, IN CREATION THE LEGAL FICTION, EMPLOYS THE WORD MAY AND NOT SHALL . 9. WITH REGARD TO THE DEPRECATION OF RS.1,98,847/- ON ELECTRICAL ITEMS WHICH ARE CONSIDERED AND CLAIMED AS BOGUS PUR CHASES, THE COUNSEL OF THE ASSESSEE SUBMITTED THAT IN THE RETUR N OF INCOME, THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT HAS CLAIM ED ONLY DEPRECIATION AND NOT THE COST OF ELECTRICAL GOOD S. HE ACCORDINGLY SUBMITTED THAT ELECTRICAL ITEMS CANNOT BE DISALLOW ED WITHOUT WHICH, IT IS NOT POSSIBLE FOR THE ASSESSEE TO COMMENCE THE BUSIN ESS, THEREFORE, THE AO BE DIRECTED TO DELETE THE COST OF ELECTRICA L ITEMS OF RS.15,74,700/- AND DEPRECIATION THEREON AMOUNTING T O RS.1,98,847/-. 10. AS AGAINST THIS, SHRI AVINASHKUMAR, THE LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 11. HAVING HEARD BOTH THE SIDES, WE HAVE GONE THRO UGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THA T THE ASSESSEE HAS AVAILED TERM LOAN FROM GIIC LTD. AND STATE BANK OF SAURASHTRA. AS PER THE PROJECT COMPLETION CERTIFICATE ISSUED BY M/S GI IC LTD. , THE UNIT HAS CREATED ASSETS FOR THE PROJECT FINANCED BY THEM WHI CH INCLUDES PLANT AND MACHINERY OF RS.392.40 LACS. THE FIGURE OF P LANT AND MACHINERY INCLUDES ELECTRIFICATION COST OF RS.47,57,023/-. ACCORDING TO THE ASSESSEE THE SAID ELECTRIFICATION COST INCLUDES EL ECTRIC CABLES OF RS.15,74,700/- FROM M/S CHOKSHI TRADING CO. BE THAT IT MAY BE, IT IS PERTINENT TO NOTE THAT IN THE PROFIT AND LOSS ACCO UNT, THE ASSESSEE HAS NOT CLAIMED THE COST OF ELECTRICAL CABLE ALLEGED TO BE PURCHASED ITA NO.67/RJT/2011. . 8 AMOUNTING TO RS.15,74,700/-. WE ARE, THEREFORE, OF THE VIEW THAT THIS ADDITION CANNOT BE MADE AS THE SAME IS NOT DEBITED TO THE PROFIT AND LOSS ACCOUNT. WE ACCORDINGLY DELETE THE ADDITION O F RS.15,74,700/-. THE GROUND NO.1 IS ALLOWED. 12. COMING TO THE DISALLOWANCE OF DEPRECIATION AMOU NTING TO RS.1,98,847/- , THE POSSIBILITY OF INFLATION OF ELE CTRICAL CABLES BY RS.15,74,700/- ON THE BASIS OF BOGUS BILLS ALLEGED TO HAVE BEEN RECEIVED FROM M/S CHOKSHI TRADING CO. CANNOT BE R ULED OUT. IN THE STATEMENT RECORDED, SHRI N.K.SHAH AND SHRI J.K. SHAH, HAVE STATED THAT FROM M/S CHOKSHI TRADING COMPANY, BOGUS BIL LS ARE ISSUED AND CASH IS PAID TO THE PERSONS TO WHOM THE BOGUS BILLS WERE ISSUED. NEITHER BEFORE THE AO NOR BEFORE THE FIRST APPELL ATE AUTHORITY OR EVEN BEFORE US THE ASSESSEE HAS FILED AN AFFIDAVIT FROM M/S CHOKSHI TRADING COMPANY DISPUTING THE AVERMENT MADE BY THE SE TWO PERSONS IN THE STATEMENT RECORDED BY THE INCOME TAX DEPART MENT. THE ALLEGED PAYMENT TO M/S CHOKSHI TRADING COMPANY IS MADE THROUGH SIX DEMAND DRAFTS WHICH WERE ISSUED BY STATE BANK OF SAURASHTRA ON 9.1.1997, 13.1.1997, 18.1.1997, 19.1.1997, 28.1.199 7 AND 13.2.1997. WHEN ALLEGED GOODS FROM M.S CHOKSHI TRADING COMPA NY WERE PURCHASED IN INSTALLMENTS, WHAT WAS THE NECESSITY O F ISSUING DEMAND DRAFTS, THE ASSESSEE COULD HAVE EASILY MADE THE PAY MENT THROUGH ACCOUNT PAYEE CHECKS. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE COULD NOT EXPLAIN THE REASONS FOR MAKING THE PAYMEN T TO M/S CHOKSHI TRADING COMPANY BY THESE SIX DEMAND DRAFTS THAT TOO ON THE DIFFERENT DATES. GENERALLY, WHEN GENUINE PURCHASES ARE MADE ON REGULAR BASIS ITA NO.67/RJT/2011. . 9 FROM KNOWN PERSONS, THE PAYMENTS ARE GENERALLY MADE THROUGH ACCOUNT PAYEE CHECKS. UNDER THESE CIRCUMSTANCES, TH E POSSIBILITY OF OBTAINING THE BOGUS BILLS CANNOT BE RULE OUT. WE, THEREFORE, ARE OF THE VIEW THAT THE AO HAS RIGHTLY DISALLOWED THE DEPRECI ATION OF RS.1,98,847/- ON ALLEGED BOGUS PURCHASE OF ELECTRI C GOODS ALLEGED TO BE PURCHASED OF RS.15,74,700/- FROM M/S CHOKSHI TR ADING CO. THE GROUND NO.2 IS ACCORDINGLY REJECTED. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TR EATED AS PARTLY ALLOWED. THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE D ATE MENTIONED HEREINABOVE. SD/- SD/- ( .. / D. K. SRIVASTAVA) ( .. / T. K. SHARMA) / ACCOUNTANT MEMBER /JUDICIAL MEMBER 3/ ORDER DATE 28 .09.2012 /RAJKOT SRL . .. . +8 +8 +8 [phone] / COPY OF ORDER FORWARDED TO:- 1. * / APPELLANT-. 2. +,* / RESPONDENT- 3. < / CONCERNED CIT. 4. <- / CIT (A). 5. 8 +, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , TRUE COPY SENIOR PRIVATE SECRETAR Y , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.