DCIT, Circle-2(1), Hyderabad, Hyderabad V. Kala Jyothi Process Private Limited, Hyderabad, Hyderabad

ITA 740/HYD/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2277 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-12-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 01-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: N SWAPNA
• Keywords: Reopening of assessment; Bogus purchase; Accommodation entries
• Section: 133A; 133(6); 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NOS. 740, 741, 742, 743 & 744/HYD/2017 ASSESSMENT YEARS: 2008-09, 2009-10, 2010-11, 2011-1 2 & 2013-14 DY. COMMISSIONER OF INCOME-TAX, CIRCLE 2(1), HYDERABAD. VS. M/S KALA JYOTHI PROCESS PVT. LTD., HYDERABAD. PAN AAACK 8353P APPELLANT RESPONDENT ASSESSEE BY: SMT. N. SWAPNA REVENUE BY: SHRI Y. RATNAKAR DATE OF HEARING: 06/12/2017 DATE OF PRONOUNCEMENT: 13/12/2017 O R D E R PER S. RIFAUR RAHMAN, AM: ALL THESE APPEALS ARE PREFERRED BY REVENUE AGAINST A COMMON ORDER OF CIT(A) - 2, HYDERABAD DATED 31/01/2 017 RELATES TO THE AYS 2008-09 TO 2013-14. AS IDENTICAL ISSUES ARE INVOLVED IN THESE APPEALS, THEY WERE CLUBBED AND HE ARD TOGETHER AND THEREFORE, A COMMON ORDER IS PASSED FO R THE SAKE OF CONVENIENCE. 2. AS THE FACTS AND ISSUES ARE COMMON, WE CULL OUT OF THE FACTS FROM AY 2008-09 TO DISPOSE OF THESE APPEALS. 3. BRIEFLY THE FACTS OF THE CASE ARE, ASSESSEE HAS FILED RETURN OF INCOME FOR AY 2008-09 ON 29/08/2008 ADMIT TING TOTAL INCOME OF RS. 1,74,23,890/- UNDER THE HEAD INCOME FROM BUSINESS AND THE SAME WAS PROCESSED U/S 143(1) OF T HE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) ON 19/03/ 2010. A SURVEY WAS CONDUCTED UNDER SECTION 133A OF THE ACT ON I.T.A. NO. 740 TO 744/HYD/2017 M/S KALA JYOTHI PROCESS PVT. LTD. 2 02/09/2014. DURING THE SURVEY, IT WAS FOUND THAT T HE COMPANY WAS RAISING BOGUS PURCHASE BILLS TO COVER UP THE WA STAGE MATERIAL PRODUCED WHILE CUTTING PAPER TO THE REQUIR ED SPECIFICATIONS, WRONG PRINTING ETC. THE BILLS, SO R AISED, WERE NOT REFLECTED IN SECURITY REGISTER, STOCK INWARD RE GISTER, DAY BOOK, LEDGER OF MATERIAL CONSUMPTION. AO AFTER OBTA INING NECESSARY APPROVAL FOR REOPENING OF ASSESSMENT, NOT ICE U/S 148 OF THE ACT DATED 23/03/2015 DULY SERVED ON THE ASSESSEE. BASED ON THE ABOVE NOTICE, ASSESSEE FILED RETURN OF INCOME ON 12/05/2015. 3.1 ASSESSEE VIDE ITS LETTER DATED 15/05/2015 ASKED FOR THE REASONS FOR REOPENING AND THE SAME WERE COMMUNICATE D THROUGH LETTER DATED 15/06/2015 BY THE AO. FURTHER, ASSESSEE RAISED OBJECTION FOR SUCH REOPENING VIDE ITS LETTER DATED 03/11/2015 AND THE SAME WAS DULY REPLIED ON 18/01/2 016. 3.2 AO RELIED ON THE FINDINGS MADE DURING THE SURVE Y PROCEEDINGS AND THE DISCREPANCIES FOUND DURING SURV EY IN RECORDING OF BILLS AND MATERIAL RECEIPTS IN ASSESSE ES STOCK REGISTERS WERE AGAIN POINTED OUT FEW INSTANCES IN T HE ASSESSMENT ORDER AND IN ORDER TO VERIFY GENUINENESS OF THE TRANSACTIONS, NOTICES U/S 133(6) WERE ISSUED TO THE SUPPLIERS WERE RECORDED. FURTHER, AO RELIED ON THE STATEMENTS RECORDED U/S 131 OF THE ACT OF SHRI AALAPATI BAPANNA, M.D. O F THE ASSESSEE COMPANY AND ACCORDING TO THE AO, M.D. HAS ACCEPTED THE ABOVE DISCREPANCIES. BY RELYING ON THE ABOVE FINDINGS, AO CONSIDERED THE ABOVE DISCREPANCIES AS INFLATED PURCHASES BEING THE VALUE OF WASTAGE RECORDED BY TH E ASSESSEE DURING THE YEAR I.E. 96,436 KGS, WHICH WAS VALUED AT RS. 41,93,444/-, TREATING IT AS INFLATED PURCHASES, HENCE, DISALLOWED. AGGRIEVED WITH THE ABOVE ORDER, ASSESS EE PREFERRED AN APPEAL BEFORE THE CIT(A) AND THE CIT(A ) AFTER I.T.A. NO. 740 TO 744/HYD/2017 M/S KALA JYOTHI PROCESS PVT. LTD. 3 CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE FINDINGS OF THE AO, ADJUDICATED THE ISSUE IN FAVOUR OF THE A SSESSEE BY MAKING FOLLOWING OBSERVATIONS: 5.3. I HAVE GONE THROUGH THE AO'S OBSERVATIONS AND AR'S CONTENTIONS. AO HAS TREATED THE WASTAGE IN PAP ER AS INFLATION IN PURCHASES. ACCORDINGLY, AO MADE ADD ITION TO THE RETURNED INCOME FOR THE YEARS UNDER APPEAL O N THIS SCORE. IN OTHER WORDS, THE OBSERVATIONS OF THE AO FOR ALL THESE YEARS IS THAT THE ASSESSEE HAS INFLAT ED THE PURCHASES AND THE INFLATION OF PURCHASES SHOULD BE DEEMED TO BE EQUAL TO THE WASTAGE SUFFERED. AGGRIEV ED BY THE AO'S ACTION, THE ASSESSEE CONTENDS THAT THE EFFECT OF THE ADDITION MADE IS THAT IT SHOULD BE AS SUMED THAT THE ASSESSEE SUFFERED NO WASTAGE, THAT THE WASTAGE, SHOULD BE TAKEN TO BE NIL AND THE COST OF PURCHASE OF PAPER LOST DUE TO WASTAGE IN PRINTING S HOULD BE DEEMED TO BE INFLATED PURCHASES. IT IS RELEVANT TO MENTION HERE THAT THE ASSESSEE HAS GIVEN QUANTITATI VE PARTICULARS OF PAPER SOLD AS SCRAP AND THE AMOUNT REALIZED FOR EACH YEAR. THE SCRAP SALE IS CREDITED TO THE PROFIT & LOSS ACCOUNT. IT IS SEEN THAT THE WEIGHT O F PAPER SOLD AS SCRAP IS IN FACT MUCH MORE THAN THE WASTAGE SUFFERED IN THE COURSE OF PRINTING. THE AR EXPLAINE D THAT THE SALE OF SCRAP OF PAPER INCLUDES NOT ONLY THE SC RAP GENERATED IN THE COURSE OF PRINTING BUT ALSO INCLUD ES THE SCRAP OF PAPER GENERATED WHILE CUTTING. FURTHER, IT ALSO INCLUDES NOT ONLY THE PAPER PURCHASED BY THE ASSESS EE BUT ALSO THE PAPER SUPPLIED BY THE CUSTOMERS WHOSE PRINTING WORK WAS DONE BY THE ASSESSEE ON JOB WORK BASIS. IT IS TO BE NOTED THAT ON ONE HAND THE SALE OF SCRAP IS ACCEPTED AND TAXED AS INCOME, AT THE SAME TIME FOR THE PURPOSE OF MAKING ADDITION TOWARDS INF LATION OF PURCHASES, THE AO HAS ASSUMED THAT THE SCRAP GENERATED IS NIL. 5.4. IT IS ALSO SEEN IN THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE ASSESSEE HAS GIVEN QUANTITATIV E PARTICULARS OF PURCHASES MADE, SALES EFFECTED, OPEN ING AND CLOSING STOCKS, REPRINTS AND REJECTIONS. THE QUANTITATIVE TALLY FURNISHED BY THE ASSESSEE IS FOU ND TO BE CORRECT. THEREFORE, AR CONTENDS THAT IF THE QUANTITATIVE PARTICULARS FURNISHED TO THE AO STAND UNDISPUTED THE ADDITION MADE IS NOT SUSTAINABLE. 5. FURTHER, BEFORE MAKING ADDITIONS TO THE RETURNED INCOME, THE AO HAS GIVEN A FEW INSTANCES OF DISCREPANCIES POINTED OUT IN THE SURVEY ACTION UJS. 133A OF THE ACT. THEY ARE AS UNDER: I.T.A. NO. 740 TO 744/HYD/2017 M/S KALA JYOTHI PROCESS PVT. LTD. 4 A)INVOICE DT.7-7-2012OFECC TRADING PVT. LTD. B )INVOICE DT.14-7-20 12 OF ECC TRADING PVT. LTD. C)INVOICES DT.20-4-2007, 29-4-2007, 26-5-2007, 27-5 - 2007 OF MITTAL TRADINGCOMPANY. 5.6. I HAVE PERUSED THE SAME AND I FIND THAT THESE INSTANCES POINTED OUT RELATE TO THE F.Y. 2012-13 RE LEVANT TO THE A.Y. 2013-14 AND THE F.Y. 2007-08 RELEVANT T O THE A.Y. 2008-09. OUT OF FIVE ASSESSMENT '. EARS THESE DISCREPANCIES ARE HIGHLIGHTED ONLY FOR TWO ASSESSME NT \ EARS. TWO ARE FOR THE A. Y. 2013-14 AND FOUR ARE FO R THE A. Y. 200809. FURTHER IN THE ASST. ORDER IT IS STAT ED THAT THE SUPPLIERS WHEN CONTACTED, ADDRESSED TO THE AO FURNISHING SOME DETAILS. NONE OF THE SUPPLIERS REPO RTED THAT THEY HAVE NOT SOLD THE MATERIAL OR THAT THEY H AVE ISSUED ANY ACCOMMODATION INVOICES. 5.7. THE AO STATED THAT DURING THE SURVEY ACTION U/S.133A OF THE ACT, THE MANAGING DIRECTOR SHRI A. BAPANNA IN THE STATEMENT RECORDED ON 13-10-2014 U/S 131 STATED THERE COULD HAVE BEEN SOME ERRORS WHILE RECORDING OR THAT THERE COULD BE SOME OMISSION EITH ER BECAUSE THE MATERIAL RECEIVED DIFFERS OR IN THE MAT ERIAL RECEIVED RECORDS ERRONEOUSLY THE NAME OF ANOTHER SUPPLIER IS NOTED. 5.8. FROM THE ABOVE, IT IS CLEAR THAT THERE HAS BEE N WASTAGE OF 38.83% DECLARED BY THE ASSESSEE FOR ALL THE YEARS UNDER APPEAL WHICH IS CONSIDERED VERY REASONA BLE IN THIS LINE OF BUSINESS. FURTHER, IT IS ALSO TO BE SEEN THAT THE ASSESSEE HAS BEEN SHOWING INCOME FROM WASTAGE/SCRAP SALES. THE CONCLUSION OF THE AO TO TR EAT THE WASTAGE AS INFLATION IN PURCHASES IS NOT CORREC T AS IT IS NOT BASED ON FACTS. THOSE ARE SAMPLE INVOICES WHEREIN THE AO HAS FOUND DISCREPANCIES. AT THE SAME TIME, THESE DISCREPANCIES WOULD NOT LEAD TO A CONCL USION THAT PURCHASES MADE BY THE ASSESSEE ARE INFLATED. APPARENTLY, THE DISCREPANCIES RELATE TO MAINTENANCE OF VOUCHERS AND POSTING THE SAME IN STOCK REGISTERS. I N THE ABSENCE OF ANY FINDING WITH REGARD TO VARIATION IN STOCK EITHER EXCESS/DEFICIT DURING THE COURSE OF 133A ACT ION, THE DISCREPANCIES SO POINTED OUT BY THE AO WILL BE INCONCLUSIVE AND HENCE NO ADDITION IS WARRANTED IN THIS REGARD. THE FACT REMAINS THAT THE WEIGHT OF PAPER PURCHASED TALLIES. IF ANY ADDITION HAS TO BE MADE F OR INFLATED PURCHASES IT SHOULD RELATE TO THAT PARTICU LAR INVOICE, BUT THE DISCREPANCY IN A FEW INVOICES CANN OT JUSTIFY THE WASTAGE TO BE TREATED AS NIL. IT MAY BE I.T.A. NO. 740 TO 744/HYD/2017 M/S KALA JYOTHI PROCESS PVT. LTD. 5 MENTIONED HERE THAT WHILE DISPOSING OF THE APPEAL F OR THE A.Y.2012-13 ON IDENTICAL ISSUE, THE UNDERSIGNED HELD AS UNDER: ' I HAVE PERUSED THE ABOVE AND IT IS INTERESTING TO NOTE THAT DURING THE SURVEY ACTION, NO DISCREPANCIES WITH REGARD TO STOCK WERE FOUND BY THE DEPARTMENT. IT IS ALSO TO BE SEEN THAT SALES MADE BY THE ASSESSEE DURING THE YEAR UNDER APPEAL ARE ALL ACCOUNTED FOR. APART FROM THE ABOVE, THE ASSESSEE HAS SHOWN PERCENTAGE OF WASTAGE BELOW THE INDUSTRIAL AVERAGE OF 10%. ALSO THE ASSESSEE HAS ACCOUNTED FOR THE SCRAP SALES MADE DURING THE YEAR UNDER APPEAL AND THE VALUE OF THE SAME WAS BOOKED AT RS.1,99,15,262. IN OTHER WORDS, THE A.O'S. ACTION IN MAKING ADDITION OF RS.1,13,51,139 WAS NOT BASED ON MATERIAL EVIDENCE AND HENCE THE SAME CANNOT STAND TEST OF REASONING.' 5.9. IDENTICAL FACTUAL POSITION PREVAILS FOR THE AB OVE ASSESSMENT YEARS. TAKING INTO CONSIDERATION CUMULATIVELY THE ENTIRETY OF FACTUAL POSITION, I AM OF THE CONSIDERED VIEW THAT THE ADDITIONS MADE TOWARDS INFLATION OF PURCHASES BY DISALLOWING THE WASTAGE I N THE COURSE OF PRINTING ARE NOT JUSTIFIED. HENCE, THE AD DITIONS OF RS.41,93,444/-, 1,15,18,170/-, 53,91,172, 1,54,80,362/- AND 2,04,69,366/- FOR THE A.YS. 2008- 09, 2009-10, 2010-11, 2011-12 AND 2013-14 RESPECTIVELY ARE HEREBY DIRECTED TO BE DELETED. AS A RESULT, THE GROUNDS RAISED ARE ALLOWED. 4. AGGRIEVED WITH THE ABOVE ORDER, THE REVENUE IS I N APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT (A) ERRED BOTH ON FACTS AND IN LAW. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHET HER THE CIT(A) IS CORRECT IN ALLOWING THE APPEAL OF THE ASSESSEE ON THE ISSUE OF INFLATION OF PURCHASES WHE N THE MODUS OPERANDI PRACTICED BY THE ASSESSEE CLEARLY RESULTS IN THE SUPPRESSION OF THE PROFITS OF THE CO MPANY, WHICH IS SOUNDLY ESTABLISHED BY VARIOUS MODES SUCH AS SURVEY OPERATION U/S.133A, SWORN STATEMENT OF THE MANAGING DIRECTOR OF THE ASSESSEE COMPANY IX] S.131 AND FURTHER BY THE INDEPENDENT ENQUIRIES DURING THE ASSESSMENT U/S.133(6) OF THE IT ACT? I.T.A. NO. 740 TO 744/HYD/2017 M/S KALA JYOTHI PROCESS PVT. LTD. 6 3. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME O F HEARING. 5. GROUND NOS. 1 & 3 ARE GENERAL IN NATURE, NEED NO ADJUDICATION. 6. WITH REGARD TO GROUND NO. 2, LD. DR SUBMITTED TH AT ASSESSEE HAS INFLATED THE PURCHASES RECORDED DURING THE YEAR TO COVER UP THE WASTAGE MATERIAL PRODUCED DURING TH IS AY AND WHICH IS FURTHER USED FOR IN ANOTHER WORK. THE BILL S SO RAISED WERE NOT REFLECTED IN THE MATERIAL INWARD REGISTERS MAINTAINED BY THE ASSESSEE. SHE POINTED OUT THAT THESE FINDING S WERE UNEARTHED BY THE DEPARTMENT DURING SURVEY OPERATION CONDUCTED IN THE PREMISES OF THE ASSESSEE AND THE S AME WAS ACKNOWLEDGED BY THE M.D OF THE COMPANY IN HIS SWORN STATEMENT RECORDED U/S 131 OF THE ACT ON 13/10/2014 . SHE BROUGHT TO OUR ATTENTION TO THE SWORN STATEMENT OF THE M.D., WHICH SHE HAS SUBMITTED BEFORE US, PARTICULARLY, QU ESTION NO. 14, AS PER WHICH, THE M.D. HAS CONFIRMED THE INVOIC ES CONTAINS NO M.R. AND HE WAS ALSO NOT IN A POSITION TO SHOW THE ENTRY IN THE REGISTERS, FOR WHICH HE TOOK TIME TO REVERT. TH E DR, THEREFORE, SUBMITTED THAT IT CLEARLY SHOWS THAT ASS ESSEE HAS INFLATED THE PURCHASES AND SHE SUPPORTED ACTIONS OF THE AO FOR DISALLOWING SUCH INFLATED EXPENDITURE. 7. LD. AR, ON THE OTHER HAND, SUBMITTED WRITTEN SUBMISSIONS SUPPORTING THE FINDINGS OF CIT(A) AND S UBMITTED THAT IN THE ASSESSMENT ORDER, THE ADDITION IS MENTI ONED AS INFLATED EXPENDITURE WHEREAS IT IS NOTHING BUT WAST AGE OF PAPER WHILE PRINTING . HE SUBMITTED THAT DURING THI S AY, ASSESSEE HAS INCURRED WASTAGE, WHICH WAS QUANTIFIED AT RS. 96,436 KGS, THE COST OF SUCH WASTAGE IS RS. 41,93,4 44/-. HE FURTHER SUBMITTED THAT THE WASTAGE PERCENTAGE IS AB OUT 2.83% OF PAPER CONSUMED DURING THIS YEAR, WHICH IS WELL B ELOW THE I.T.A. NO. 740 TO 744/HYD/2017 M/S KALA JYOTHI PROCESS PVT. LTD. 7 NORMAL WASTAGE OF 10% IN THE PRINTING INDUSTRY. IT SHOWS THAT ASSESSEE IS WORKING EFFICIENTLY AND THE WASTAGE PER CENTAGE CANNOT BE UNIFORM THROUGHOUT THE YEAR AND CANNOT B E SAME IN EVERY YEAR. HE FURTHER SUBMITTED THAT AO HAS NOT FO UND ANY DISCREPANCY IN RECORDING OF THE PURCHASE AND CONSUM PTION OF THE PAPERS DURING THE YEAR. HE SUBMITTED THAT NO DO UBT, HE HAD FOUND CERTAIN DISCREPANCIES WHILE RECORDING FEW INSTANCES IN THE MATERIAL REGISTER, IT DOES NOT MEAN THAT THE WHOLE PURCHASES AND CONSUMPTION IS INCORRECT. AO HAS HIGH LIGHTED FEW INSTANCES IN HIS ORDER, WHICH IS A HUMAN ERROR AND WHATEVER PURCHASES WERE RECORDED IN STOCK REGISTER TALLIED WITH THE INVOICES RAISED BY THE SUPPLIERS AND ALL T HE SUPPLIERS DUES WERE SETTLED BY CROSS ACCOUNT PAYEE CHEQUES ON LY. HE SUBMITTED THAT ASSESSEE NOT ONLY DOES ITS OWN PRINT ING BUT ALSO UNDERTAKES JOB WORK FOR WHICH MATERIALS ARE SU PPLIED BY OTHERS. IN FACT, THE TOTAL WASTAGE OF MATERIAL SOLD BY THE ASSESSEE IS 12,42,892 KGS AND THE SAME WAS RECORDED IN THE BOOKS OF ACCOUNT AS SCRAP SALES, REALIZED AN AMOU NT OF RS. 90,63,070/- AND THE SAME WAS OFFERED AS INCOME DURI NG THE YEAR. THE ABOVE WASTAGES ARE CUMULATIVE OF ASSESSE S OWN WASTAGE AS WELL AS OUT OF JOB WORK. FINALLY, LD. AR SUBMITTED THAT THE CLAIM OF THE AO IS WRONG THAT MD HAS ACCEP TED THE RECORDING OF SUCH BOGUS INVOICES OR DISCREPANCIES I N RECORDING OF THE PURCHASES, IT IS ONLY FEW INSTANCES, WHICH H E AGREED TO REVERT BACK AFTER VERIFICATION. HE CONCLUDED HIS SU BMISSION BY FULLY RELYING ON THE FINDINGS OF THE LD. CIT(A). 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. THE ASSESSEE IS ENGAGED I N THE BUSINESS OF MULTICOLOUR OFFSET PRINTING. FOR THE PU RPOSE OF ITS BUSINESS, ASSESSEE REGULARLY PURCHASES PAPERS FROM ITS MAIN SUPPLIERS AND MAINTAINING REGULAR BOOKS OF ACCOUNT FOR THE SAME. ASSESSEE HAS SUBMITTED QUANTITY RECONCILIATIO N I.T.A. NO. 740 TO 744/HYD/2017 M/S KALA JYOTHI PROCESS PVT. LTD. 8 STATEMENT FOR THE CURRENT AY BEFORE AO AND AO HAS N OT FOUND ANY DISCREPANCIES AND ACCEPTED THE SAME. AO HAS NOT FOUND ANY DISCREPANCY IN THE ABOVE QUANTITY, CONSUMPTION AND ALSO QUANTITY CLAIMED BY THE ASSESSEE AS WASTAGE. AO MAI NLY RELIED ON THE FINDINGS DURING THE SURVEY, WHICH HE HAS HIGHLIGHTED IN THE REPORT INCLUDING FEW DISCREPANCI ES. AO MADE ADDITION AND CAME TO THE CONCLUSION AS INFLATED PUR CHASES MERELY ON SUSPICION AND APART FROM FEW DISCREPANCIE S, HE HAS NOT BROUGHT ON RECORD ANY COGENT MATERIAL TO PROVE THAT ASSESSEE HAS, IN FACT, RECORDED BOGUS PURCHASES. HE MERELY RELYING ON THE FEW INSTANCES OF DISCREPANCIES POINT ED OUT DURING SURVEY, WHICH ARE AS UNDER: A) INVOICE DATED 07/07/2012 OF ECC TRADING PVT. LT D. B) INVOICE DT. 14/07/2012 OF ECC TRADING PVT. LTD. C) INVOICES DT. 20/04/2007, 29/04/2007, 26/05/2007, 27/05/2007 OF MITTAL TRADING COMPANY. THE ABOVE DISCREPANCIES WERE ALSO DISMISSED BY THE CIT(A) BY OBSERVING THAT AO HAS ASSESSED FIVE ASSESSMENT Y EARS AND FOUND DISCREPANCIES ONLY IN TWO AYS RELEVANT TO AY 2008-09 AND 2013-14 AND NONE OF THE REGULAR SUPPLIERS HAVE DENIED THAT THEY HAVE SOLD MATERIAL TO ASSESSEE NOR HAVE T HEY ACCEPTED TO HAVE ISSUED ANY ACCOMMODATION ENTRIES. BY CONSIDERING THE ABOVE DISCUSSION, IN OUR CONSIDERED VIEW, THERE IS NO COGENT MATERIAL IN SUPPORT OF THE FINDI NGS OF AO THAT ASSESSEE HAS IN FACT RECORDED ANY BOGUS PURCHA SES AND IT IS CLEAR FROM THE SUBMISSION OF THE ASSESSEE THAT T HESE ARE ACTUAL WASTAGES INCURRED BY THE ASSESSEE IN ITS BUS INESS AND ALSO ASSESSEE HAS DECLARED SCRAP SALE FOR THE VAL UE OF WASTAGE TO THE EXTENT OF RS. 90,63,070/-, WHICH IS MUCH HIGHER THAN THE ALLEGED VALUE OF INFLATED INVOICES. HENCE, WE ARE IN AGREEMENT WITH THE FINDINGS OF THE CIT(A) IN DELETI NG THE ADDITION MADE BY THE AO ON THIS COUNT AND ACCORDING LY, WE I.T.A. NO. 740 TO 744/HYD/2017 M/S KALA JYOTHI PROCESS PVT. LTD. 9 UPHOLD THE ORDER OF CIT(A) AND DISMISS THE GROUNDS RAISED BY THE REVENUE. 9. AS THE FACTS AND GROUNDS ARE IDENTICAL IN ALL OT HER APPEALS FOR AYS 2009-10 TO 2013-14 TO THAT OF AY 20 08-09 (SUPRA), FOLLOWING THE DECISION THEREIN WE DISMISS THE APPEALS FOR THESE YEARS ALSO. 10. IN THE RESULT, ALL THE APPEALS OF THE REVENUE A RE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 13 TH DECEMBER, 2017. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER SD/- (S. RIFAUR RAHMAN) ACCOUNTANT MEMBER HYDERABAD, DATED 13 TH DECEMBER, 2017 KV COPY FORWARDED TO: 1. DCIT, CIRCLE 2(1), 5 TH FLOOR, ROOM NO. 514, SIGNATURE TOWERS, KONDAPUR, HYDERABAD. 2. M/S KALA JYOTHI PROCESS PVT. LTD., 1-1-60/5, IFT EKAR MANSION ROAD, RTC X ROADS, HYDERABAD. 3. CIT(A) - 2, HYDERABAD 4 PR. CIT - 2, HYDERABAD 5 THE DR, ITAT, HYDERABAD 6. GUARD FILE