Shri Prakashbhai Vanmalidas Turakhia, Ahmedabad V. The Income Tax Officer, Ward-10(4), Ahmedabad

ITA 883/AHD/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94402 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 13-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITA HARDASANI
• Keywords: Bogus purchase; Unexplained expenditure; Additional evidence; Accommodation entries
• Section: 69C; 143(3); 133(6); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER) I.T. A. N O. 883 /AHD/2015 (ASSESSMEN T YEAR: 2009-10) SHRI PRAKASHBHAI VANMALIDAS TURAKHIA PROP. OF TURAKHIA INNOVATIVE G-32, VIKRAM CHAMBERS, NR. SALES INDIA, ASHRAM ROAD AHMEDABAD-380009 V/S INCOME TAX OFFICER, WARD- 10 (4), AHMEDABAD NARAYAN CHAMBERS, ASHRAM ROAD, AHMEDABAD-380015 (APPELLANT) (RESPONDENT) PAN: AAHPT2967Q APPELLANT BY : SHRI PARIN SHAH, AR RESPONDENT BY : SMT. ANITA HARDASANI, SR. D. R. ( )/ ORDER DATE OF HEARING : 11-09-2015 DATE OF PRONOUNCEMENT : 18 -09-2015 PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE OR DER OF CIT(A), AHMEDABAD-5 DATED 2.03.2015 FOR A.Y. 2009-10. ITA NO .883/ AHD/2015 . A.Y. 2009 -10 2 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS AN INDIVIDUAL STATED TO BE ENGAGED IN T HE BUSINESS OF TRADING OF TILES AND CERAMICS IN THE NAME AND STYLE OF HIS PRO PRIETARY CONCERN BY THE NAME 'TURAKHIA INNOVATIVE'. ASSESSEE ELECTRONICALL Y FILED HIS RETURN OF INCOME FOR AY 2009-10 ON 20.9.2009 DECLARING TOTAL INCOME OF RS 1,29,990/- WHICH WAS INITIALLY PROCESSED U/S 143(1) . SUBSEQUENTLY INFORMATION WAS RECEIVED BY A.O FROM DGIT (INV) MUM BAI ABOUT THE INFORMATION THAT WAS RECEIVED BY THEM FROM VAT DEPA RTMENT, MUMBAI ABOUT THE INVOLVEMENT OF CERTAIN PARTIES IN THE ACT IVITY OF ISSUING NON GENUINE/PURCHASE BILLS AND ASSESSEE WAS ALSO ONE OF THE PARTY WHO WAS ONE OF THE BENEFICIARY OF NON GENUINE PURCHASES AS HE H AD SAID TO HAVE MADE PURCHASES OF RS 48,108/- FROM THE PARTIES INVOLVED IN ISSUING BOGUS BILLS. BASED ON THE AFORESAID INFORMATION, NOTICE U/S 148 OF THE ACT WAS ISSUED ON 26.3.2013 AND IN RESPONSE TO WHICH, ASSESSEE FILED RETURN OF INCOME ON 4.4.2013 DECLARING THE SAME INCOME OF RS 1,29,990/- THAT WAS FILED IN ORIGINAL RETURN OF INCOME. THEREAFTER THE ASSESSMEN T WAS FRAMED U/S 143(3) R.W.S 147 OF THE ACT VIDE ORDER DATED 31.1.2014 AND THE TOTAL INCOME WAS DETERMINED AT RS 178,098/- BY MAKING ADDITION OF RS 48,108/- ON ACCOUNT OF BOGUS PURCHASES. AGGRIEVED BY THE ORDER OF AO, ASSE SSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO VIDE ORDER DATED 2.3.2015 CON FIRMED THE ACTION OF THE AO. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUN DS:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-5, AHMEDABAD HAS ERRED BOTH IN LAW AND ON FACTS OF THE CASE IN FRAMING APPELLATE O RDER U/S.250 OF THE I.T. ACT. FOR A.Y.2009-2010 ON 2 ND MARCH, 2015 ITA NO .883/ AHD/2015 . A.Y. 2009 -10 3 2. THE LEARNED CIT(A) 5, AHMEDABAD HAS ERRED IN CONF IRMING FOR REOPENING THE ASSESSMENT PROCEEDING U/S.147 OF THE I.T. ACT. 3. THE LD. CIT(A) 5, AHMEDABAD HAS ERRED IN CONFIRMI NG THE ADDITION OF RS. 48,108/- AS UNGENUINE / BOGUS PURCHASE. 4. BEFORE US, LD. AR SUBMITTED THAT GROUND NO 1 IS GEN ERAL AND GROUND NO 2 WITH RESPECT TO CHALLENGING THE REOPENING OF ASSESS MENT IS NOT PRESSED AND IN VIEW OF THE SUBMISSIONS OF LD. A.R. BOTH THE GROUND S ARE DISMISSED. 5. GROUND NO 3 IS WITH RESPECT TO ADDITION OF RS 48,10 8/- ON ACCOUNT OF BOGUS PURCHASES. 6. A.O. RECEIVED INFORMATION FROM DGIT (INV) MUMBAI IN FORMED ABOUT ACTION TAKEN BY THE VAT DEPARTMENT MUMBAI IN THE CASE OF V ARIOUS HAWALA BILLERS. DURING THE VAT PROCEEDINGS, THE HAWALA BIL LERS ADMITTED OF ISSUING BOGUS BILLS TO VARIOUS PARTIES AND OF WHICH ASSESSE E WAS ONE OF THE BENEFICIARY WHO HAD MADE PURCHASES AGGREGATING TO R S 48,108/- FROM JIGAN ENTERPRISES, LAXMI TRADING CO & OM CORPORATION. THE ASSESSEE WAS THEREFORE ASKED TO SHOW CAUSE AS TO WHY THE PURCHAS ES BY THE ASSESSEE FROM THE THREE PARTIES NOT BE TREATED AS BOGUS AND ADDIT ION BE MADE TO WHICH ASSESSEE INTERALIA SUBMITTED THAT IN THE ABSENCE OF DETAILS OF ADMISSION BY THE THREE PARTIES NO ADDITION CAN BE MADE AND IT WA S FURTHER SUBMITTED THAT SINCE THE THREE PARTIES HAD NOT PAID VAT ASSESSEE H AD PAID VAT ALONG WITH INTEREST AND FURTHER SUBMITTED THAT THE PURCHASES M ADE BY THE ASSESSEE WERE GENUINE. THE SUBMISSIONS OF THE ASSESSEE WAS NOT FO UND ACCEPTABLE TO THE AO IN VIEW OF THE FACT THAT ASSESSEE HAD NOT PRODUC ED RECORD OF INPUT OR OUTPUT OF THE GOODS NOR HAD FURNISHED EVIDENCE ABOU T THE RECEIPT OF THE ITA NO .883/ AHD/2015 . A.Y. 2009 -10 4 GOODS. A.O ACCORDINGLY CONSIDERED THE PURCHASE OF R S 48,108/- AS BEING NON GENUINE AND ADDED TO THE INCOME. AGGRIEVED BY THE O RDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO DISMISSED THE GROUND OF ASSESSEE AND UPHELD THE ORDER OF AO BY HOLDING AS UNDER:- 4.3. I HAVE CONSIDERED THE FACTS OF THE CASE AND SU BMISSION MADE BY THE APPELLANT. THE AO HAS MADE THE DISALLOWANCE OF RS.48,108/- AS NON- UN-GENUINE/BOGUS PURCHASES. THE A.O. HAD THE INFORMATION FROM THE HIGHER AUTHORITIE S THAT THE APPELLANT HAD THE BOGUS PURCHASES OF RS.48,108/- FROM THREE PARTIES NAMELY JIGAR ENTERPRISES AT RS.15,448/-, LAXMI TRADING CO. AT RS.18,516/- AND OM CORPORATION AT RS.14,144/-. IT HAS BEEN FOUND THAT THE PURCHASES FROM THE AFORESAID PARTIES HAVE BEEN SHOWN WHICH WERE THE HAWALA BILLERS AT BOMBAY AND IN THE VAT PROCEEDINGS AT THE PLACES OF THESE HAWALA BILLERS THEY HAVE ADMITTED OF HAVING ISSUE THE BOGUS SALE BILLS TO THE VARIOUS PARTIES AND BILL RECEIVER PARTIES HAVE TAKEN THE BILLS TOWARDS THE BOGUS PURC HASES WHICH HAVE BEEN DEBITED IN THEIR PROFIT AND LOSS ACCOUNT. I N THE PROCEEDINGS THEY WERE ADMITTED OF ENGAGED IN TH E ACTIVITIES OF ISSUING OF BOGUS PURCHASE BILLS AS PER THE REQUI REMENT OF THE PURCHASER PARTIES. 4.4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS HA VING CONSIDERED THE SUBMISSIONS AND DETAILS PROVIDED BY THE APPELLANT, THE REASONS FOR DISALLOWANCE HAVE BEEN GIVEN IN PARA-5 AND 6 OF THE ASSESSMENT ORDER. THE AO HAS OBSERVED THAT THE APPELLANT HAS FAILED TO PRODUCE THE RECORDS OF THE PURCHASES AND SALES OF G OODS FROM HIS STOCK REGISTER. FURTHER THE APPELLANT HAS NOT FURNISHED ANY SUPPORTING EVID ENCE WITH REGARD TO MODE OF DELIVERY OF GOODS TAKEN FROM THE AFORESAID PARTIES LIKE DELI VERY CHALLANS AND RECEIPT OF THE TRANSPORTATION EXPENSES ETC. IN ABSENCE OF THE SAME IT WAS CONCLUDED THAT THE APPELLANT HAS NOT TAKEN ANY DELIVERY OF THE GOODS FROM THESE THREE PARTIES. THE AO ALSO RELIED ON THE ADMISSION OF THE HAWALA BILLERS GIVEN IN THE VA T PROCEEDINGS WHEREBY THEY WERE ADMITTED THAT THE BILLS TO VARIOUS PARTIES AS PER T HEIR REQUIREMENTS WERE ISSUED BUT NO PHYSICAL GOODS HAVE BEEN TRANSPORTED BY THEM. IT WA S ALSO FOUND THAT THESE HAWALA BILLERS HAVE NOT PAID ANY VAT LIABILITY ON THE SAID TRANSACTION AND THE ASSESSEE HAS ONLY PAID THE VAT INCLUDING INTEREST ON SUCH SALE AMOUNT AT RS.6.031/- ON 9.4.2012 IN RESPONSE TO THE LETTER ISSUED BY SALE TAX OFFICER, C-90I ISSUE BASED AUDIT MUMBAI. THUS ITA NO .883/ AHD/2015 . A.Y. 2009 -10 5 BY PAYMENT OF THE VAT LIABILITY ITSELF THE APPELLAN T HAS IMPLIEDLY ADMITTED THE NON- GENUINENESS OF THE SUPPLIER PARTIES AND THEIR ACTIV ITIES CONSEQUENTLY. 4.5. DURING THE COURSE OF APPELLATE PROCEEDINGS THE APPELLANT REITERATED HIS OWN VERSION AND ALSO SUBMITTED THAT THE COPIES OF THE SALE INVO ICES JUSTIFYING THAT THE SAID MATERIAL PURCHASES WERE SOLD BY THE ASSSESSEE WERE ENCLOSED. BUT ALONG WITH THE WRITTEN SUBMISSIONS NO SUCH SALE INVOICES HAVE BEEN ENCLOSE D AND RATHER THOSE WERE IN THE NATURE OF ADDITIONAL EVIDENCES FOR WHICH THE REQUEST UNDER RULE-46 A WAS TO BE MADE AND THE SAME HAD NOT BEEN MADE. IN NUTSHELL IT HAS BEEN FOU ND THAT THE APPELLANT HAS TOTALLY FAILED TO PROVE THE PURCHASE AND SALE OF THE GOODS ALONG WITH PHYSICAL MOVEMENT AT BOTH THE LEVELS. NO DETAILS AND EVIDENCES IN SUPPORT OF THE TRANSPORTATION OF THE GOODS PURCHASED AND SOLD HAVE BEEN PROVIDED. THUS CONSIDE RING THE REASONS EXTENDED BY THE AO AND IN ABSENCE OF ANY EVIDENCES THE PURCHASES SH OWN FROM THESE PARTIES IS HELD TO BE NON-GENUINE AND THEREFORE THE DISALLOWANCE MADE BY THE A.O. IS CONFIRMED. THUS THE GROUND OF APPEAL IS DISMISSED. 7. AGGRIEVED BY THE ORDER OF LD. CIT(A), ASSESSEE IS N OW IN APPEAL BEFORE US. 8. BEFORE US, LD. AR REITERATED THE SUBMISSIONS MADE B EFORE AO AND LD. CIT(A) AND FURTHER SUBMITTED THAT ON SIMILAR FACTS, THE AD DITION MADE BY AO WAS DELETED BY MUMBAI BENCH OF HON'BLE ITAT IN THE CASE OF ACIT VS RAMILA PRAVIN SHAH (ITA NO 5246/MUM/2013) ORDER DATED 5.3. 2015. HE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID ORDER. HE THUS SUBMITTED THAT FOLLOWING THE DECISION OF MUMBAI TRIBUNAL, THE ADDITION IN TH E CASE OF ASSESSEE BE ALSO DELETED. THE LD DR ON THE OTHER HAND SUPPORTED THE ORDER OF AO AND LD. CIT(A). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THE PRESENT CASE, THE ADDITION ON ACCOUNT OF BOGUS PURCHASES HAS MAINLY BEEN MADE FOR THE REASON THAT DURING THE VAT DEPARTMENT PROCEEDINGS CONDUCTED ITA NO .883/ AHD/2015 . A.Y. 2009 -10 6 BY MUMBAI OFFICE, THE HAWALA BILLERS HAD ADMITTED T O HAVE ISSUED ONLY BILLS AS PER THE REQUIREMENT OF THE PARTIES AND WITHOUT D ELIVERY OF GOODS AND BEFORE A.O, ASSESSEE HAD ALSO FAILED TO PRODUCE PRO OF OF RECEIPT OF GOODS FROM THOSE PARTIES. ON THE OTHER HAND IT IS ASSESSE E'S SUBMISSION THAT REVENUE HAS NOT GIVEN THE ASSESSEE THE COPIES OF THE ADMISSION OF HAWALA BILLERS WHEREIN THEY HAVE ADMITTED TO HAVE ISSUED B OGUS BILLS TO THE ASSESSEE AND LD. A.R. HAS FURTHER SUBMITTED THAT THE PAYMENT S HAVE BEEN MADE BY CHEQUES. THE AFORESAID SUBMISSIONS OF THE ASSESSEE HAS NOT BEEN CONTROVERTED BY REVENUE. FURTHER, IT IS ALSO A FAC T THAT THE SALES MADE BY THE ASSESSEE OUT OF THE IMPUGNED PURCHASES HAVE BEEN AC CEPTED BY THE REVENUE AND HAS NOT BEEN DOUBTED. WE FURTHER FIND THAT THE CO-ORDINATE BENCH OF MUMBAI TRIBUNAL IN THE CASE OF SHRI RAMILA P SHAH ( SUPRA) AND ON IDENTICAL FACTS, HAD DISMISSED THE APPEAL OF THE REVENUE BY H OLDING AS UNDER:- 3. WE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION UNDER THE NAME AND STYLE OF M /S KAILASH CONSTRUCTION CO. THE TOTAL PURCHASE EXPENDITURE CLAIMED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WAS RS.8,62,68,891/-. THE AO NOTICED THAT THE SALES TAX DEPARTMENT OF GOVERNMENT OF MAHARASHTRA HAS LISTED OUT NAMES OF CERTAIN DEALERS , WHO WERE ALLEGED TO HAVE BEEN PROVIDING ACCOMMODATION ENTRIES WITHOUT DOING ACTUA L BUSINESS. THE AO NOTICED THAT THE ASSESSEE MADE PURCHASES TO THE TUNE OF RS.28.08 LAK HS FROM SOME OF THE PARTIES, WHOSE NAMES FOUND PLACE IN THE LIST PROVIDED BY THE SALES TAX DEPARTMENT. THE AO ALSO CONSIDERED THE STATEMENTS TAKEN BY SALES TAX DEPART MENT FROM SOME OF THE PARTIES. DURING THE COURSE OF HEARING, THE AO DEPUTED INSPEC TOR OF INCOME TAX TO SERVE NOTICE U/S 133(6) OF THE ACT. HOWEVER, THE INSPECTOR REPORTED THAT THESE PARTIES WERE NOT AVAILABLE AT GIVEN ADDRESS. THE AO ALSO ASKED THE ASSESSEE TO SUBMIT DELIVERY CHALLANS AND STOCK REGISTER TO PROVE THE MOVEMENT OF STOCK AND ALSO AS KED TO PRODUCE THESE PARTIES. HOWEVER, THE ASSESSEE FAILED TO FURNISH THE DETAILS CALLED FOR. HENCE, BY PLACING THE RELIANCE ON THE STATEMENTS GIVEN BY THESE PARTIES B EFORE THE SALES TAX DEPARTMENT, THE ITA NO .883/ AHD/2015 . A.Y. 2009 -10 7 AO TOOK THE VIEW THAT THE PURCHASES TO THE TUNE OF RS.28.08 LAKHS HAVE TO BE TREATED AS UNEXPLAINED EXPENDITURE. ACCORDINGLY, HE ASSESSED T HE SAME U/S 69C OF THE ACT. 4. THE ID. CIT(A) DELETED THE ADDITION AND HENCE TH E REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 5. THE ID. DR STRONGLY PLACED RELIANCE ON THE ORDER OF ASSESSING OFFICER. 6. ON THE OTHER HAND, THE ID. AR SUBMITTED THAT THE ADDITIONS MADE IN THE CASE OF SOME OTHER ASSESSES ON IDENTICAL REASONS HAVE BEEN DELET ED BY THE CO-ORDINATE BENCHES OF THE TRIBUNAL IN THE FOLLOWING CASES : A) RAMESH KUMAR AND CO V/S ACIT IN ITA NO.295 9/MUM/2014 (AY-2010-11) DATED 28.11.2014; B) DCIT V/S SHRI RAJEEV G KALATHIL IN ITA L\L O.6727/MUM/2012 (AY-2009-10) DATED 20.8.2014; AND C) SHRI GANPATRAJ A SANGHAVI V/S ACIT I N ITA NO. 2826/MUM/2013 (AY- 2009-10) DATED 5.11.2014 IN ALL THE ABOVE SAID CASES, THE CO-ORDINATE BENCHE S OF THE TRIBUNAL HAS HELD THAT THE AO WAS NOT JUSTIFIED IN MAKING THE ADDITION ON THE BAS IS OF STATEMENTS GIVEN BY THE THIRD PARTIES BEFORE THE SALES TAX DEPARTMENT, WITHOUT CO NDUCTING ANY OTHER INVESTIGATION. IN THE INSTANT CASE ALSO, THE ASSESSING OFFICER HAS MA DE THE IMPUGNED ADDITION ON THE BASIS OF STATEMENTS GIVEN BY THE PARTIES BEFORE THE SALES TAX DEPARTMENT. WE NOTICE THAT THE ID.CIT(A) HAS PROPERLY ANALYSED THE FACTS PREVAILIN G IN THE INSTANT CASE AND FOR THE SAKE OF CONVENIENCE, WE EXTRACT THE SAME BELOW:- '5.3.11. I HAVE ALSO GONE THOUGH THE JUDICIAL PRONO UNCEMENTS RELIED UPON BY THE LD AR AND FIND THAT THE FACTS OF THE ABOVE REFERRED JUDIC IAL PRONOUNCEMENTS ARE SIMILAR TO THE PRESENT FACTS OF THE CASE AND, THEREFORE THE RATIO OF JUDGMENTS OF THE ABOVE REFERRED TWO CASES ARE FULLY APPLICABLE IN THE PRESENT CASE. FUR THER, I HAVE ALSO TAKEN INTO CONSIDERATION THE DECISION OF JURISDICTIONAL HIGH C OURT AND ITAT I.E. THE COMMISSIONER OF INCOME TAX - 1 MUMBAI VS NIKUNJ EXIMP ENTERPRISE S PVT, LTD. APPEAL NO ITA NO. 5604 OF 2010 (HON. MUMBAI HIGH COURT) AND BALAJI TE XTILE INDUSTRIES (P) LTD. VS INCOME TAX OFFICER (1994) 49 ITD (BOM) 177. WHILE I N THE CASE OF NIKUNJ EXIMP ENTERPRISES, THE HON'BLE BOMBAY HIGH COURT IN ITS L ATEST JUDGMENT HAS HELD THAT ONCE THE SALES ARE ACCEPTED, THE PURCHASES CANNOT BE TREATED AS INGENUINE IN THOSE CASES WHERE ITA NO .883/ AHD/2015 . A.Y. 2009 -10 8 THE APPELLANT HAD SUBMITTED ALL DETAILS OF PURCHASE S AND PAYMENTS WERE MADE BY CHEQUES, MERELY BECAUSE THE SELLERS/SUPPLIERS COULD NOT BE P RODUCED BEFORE THE A.O. BY THE ASSESSEE. FURTHER, I HAVE ALSO GONE THROUGH THE JUD GMENT IN CASE BALAJI TEXTILE INDUSTRIES (P) LTD. VS INCOME TAX OFFICER BY HON. ITAT, MUMBAI (1994) 49 ITD (BOM) 177 WHICH WAS MADE AS LONG BACK AS 1994 AND WHICH STILL HOLDS GOOD IN WHICH WAS HELD THAT- 'ISSUING PRINTED BILLS FOR SELLING THE TEXTILE GOOD S TO THE ASSESSEE-COMPANY AT BHIWANDI WAS NOT A CONCLUSIVE PROOF BUT IT WAS A PRIMA FADE PROOF TO ARRIVE TO A CORRECT CONCLUSION THAT THE ASSESSEE PURCHASED CERTAIN GOODS FROM CERT AIN PARTIES AT BHIWANDI. THE ASSESSEE SOLD THOSE GOODS TO 'S' AND ADJUSTED THE SALE PROCE EDS AGAINST THE LOAN TAKEN BY IT FROM THAT PARTY. THE ASSESSEE'S BOOKS OF ACCOUNT AND THE BOOKS OF ACCOUNT OF 'S' IN WHICH THE ENTRIES OF SALE AND ADJUSTMENT WERE MADE, COULD NOT BE DISCARDED MERELY BY SAYING THAT THEY WERE NOT GENUINE ENTRIES THOUGH NEITHER THE AS SESSING OFFICER NOR THE COMMISSIONER (APPEALS) OPINED ANYTHING IN RESPECT OF THOSE ENTRI ES. FURTHER, THE PURCHASE OF THE GOODS IN THE MONTH OF MARCH 1985 DID NOT MAKE ANY DIFFERE NCE. THE ASSESSEE MIGHT NOT HAVE CARRIED ON ANY BUSINESS ACTIVITIES PRIOR TO MARCH 1 985, BUT THAT DID NOT MEAN THAT THE ASSESSEE WAS NOT ENTITLED TO CARRY ON THE BUSINESS ACTIVITY IN MARCH 1985. THEY COULD NOT BE COMPELLED TO CARRY ON THE BUSINESS ACTIVITY THRO UGHOUT THE YEAR. THERE WERE NO GOOD REASONS TO DISBELIEVE THE SALES MADE BY THE ASSESSE E TO 'S'. NO SALES WERE LIKELY TO BE EFFECTED IF THERE WERE NO PURCHASES. A SALE COULD B E MADE IF THE GOODS WERE AVAILABLE WITH THE SELLER. FROM ALL THESE FACTS ON RECORD, A REASONABLE AND CONVINCING INFERENCE WHICH COULD BE DRAWN, WAS THAT THE ASSESSEE PURCHAS ED THE TEXTILE GOODS, SOLD THEM AND ADJUSTED THE SAME TOWARDS THE LOAN TAKEN BY IT. THE REFORE, THE ASSESSEE WAS ENTITLED TO GET THE ENTIRE DEDUCTION.' I HAVE ALSO TAKEN INTO CONSI DERATION, THE G.P RATIO/G.P. MARGIN OF THE APPELLANT IN THE PREVIOUS A.Y. AS WELL AS SUBSE QUENT ASSESSMENT YEAR. IF THE ADDITION MADE BY THE A.O. IS ACCEPTED, THEN G.P. RATIO OF TH E APPELLANT DURING THE PRESENT A.Y. WILL BECOME ABNORMALLY HIGH AND THEREFORE THAT IS N OT ACCEPTABLE BECAUSE IT ONUS OF THE A.O. BY BRINGING ADEQUATE MATERIAL ON RECORD TO PRO VE THAT SUCH A HIGH G.P. RATIO EXISTS IN THE NATURE OF BUSINESS CARRIED OUT BY THE APPELL ANT. FURTHER, IT HAS TO BE APPRECIATED THAT (I)PAYMENTS WERE THROUGH BANKING CHANNEL AND BY CHEQUE,(II) NOTICES COMING BACK, DOES NOT MEAN , TH OSE PARTIES ARE BOGUS, THEY ARE JUST DENYING THEIR BUSINESS TO AVOID SALES TAX/VAT ETC, (III) STATEMENT BY THIRD PARTIES CANNOT ITA NO .883/ AHD/2015 . A.Y. 2009 -10 9 BE CONCLUDED ADVERSELY IN ISOLATION AND WITHOUT COR ROBORATING EVIDENCES AGAINST APPELLANT,(IV) NO CROSS EXAMINATION HAS BEEN OFFERE D BY AO TO THE APPELLANT TO CROSS EXAMINE THE RELEVANT PARTIES (WHO ARE DEEMED TO BE WITNESS OR APPROVER BEING USED BY AO AGAINST THE APPELLANT) WHOSE NAME APPEAR IN THE WEBSITE WWW.MAHAVAT.QOV.IN AND (V) FAILURE TO PRODUCE PARTIES CANNOT BE TREATED AD VERSELY AGAINST APPELLANT. IN VIEW OF THE FACTS DISCUSSED ABOVE AS WELL AS BIN DING JUDICIAL PRONOUNCEMENTS OF THE JURISDICTIONAL ITAT MUMBAI BENCH AS WELL AS HON'BLE MUMBAI HIGH COURT AND OTHER LEGAL PRECEDENTS, THE ADDITION MADE BY THE AO AMOUN TING TO RS.28,08,071/- CANNOT BE SUSTAINED. ACCORDINGLY, THE ADDITION OF RS.28,08,07 1/- IS DELETED.' 7. HENCE, ON A CONSPECTUS OF THE MATTER, WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF THE LD. CIT(A) ON THIS ISSUE. 10. BEFORE US, REVENUE HAS NOT POINTED OUT ANY CONTRARY BINDING DECISION NOR HAS POINTED OUT ANY DISTINGUISHING FEATURE OF THE P RESENT CASE AND THAT DECIDED BY MUMBAI TRIBUNAL CITED HEREINABOVE. IN VI EW OF THE AFORESAID FACTS AND RELYING ON THE AFORESAID DECISION OF THE CO-ORDINATE BENCH OF TRIBUNAL, WE ARE OF THE VIEW THAT IN THE PRESENT CA SE, NO ADDITION WAS CALLED FOR AND THUS DIRECT THE DELETION OF ADDITION AND TH US ALLOW THE GROUND OF THE ASSESSEE. 11. IN THE RESULT THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 18 - 09 - 2015. SD/- SD/- (S.S. GODARA) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: -