Commissioner of Income Tax vs Jagdishchandra Vishwakarma

Heard on the question of admission.

By this appeal u/s 260A of the IT Act, 1961 the appellant revenue has challenged the order dt. 15th May, 2007 passed by the Tribunal in ITA No. 493/Ind/2002 whereby the Tribunal has affirmed the order dt. 29th May, 2002 passed by the CIT(A), Ujjain (wrongly mentioned by the Tribunal as Indore).

Learned senior counsel for the appellant restricted his arguments in regard to the proposed first question of law about the purchase of Rs. 33.13 lacs made from non-existent parties. According to him, the CIT(A) as also the Tribunal have committed error in holding that the appellant revenue has failed to prove that the purchase is bogus.

Having considered the submissions made by the learned senior counsel for the appellant and after going through the order passed by the AO, the order passed by the CIT(A) and the order passed by the Tribunal, we find that the orders passed by the CIT(A) and the Tribunal are based on sound appreciation of evidence. The CIT(A) has exhaustively dealt with the finding recorded by the AO about holding the purchase shown from M/s Pooja Steel Sales and M/s Ashirwad Steels to be bogus and has rightly set aside the order of AO. The CIT(A) in the order has observed thus :

I have carefully considered the facts and circumstances of the case and the complete evidence recorded by the AO during the course of assessment proceedings and further the remand report of the present AO as discussed hereinabove and I am of the opinion that the appellants onus to prove the genuineness of the purchases is discharged soon after the receipt of regular purchase bills followed the delivery of goods and payment of sale consideration by DDs/cheques and the utilization of the raw material purchased by the appellant in the process of manufacture of threshers and evidenced by the chart of page No. 34 of the assessment order, giving money-wise consumption of various inputs. The genuineness has to be examined at the time of purchases and not years thereafter. The report of the Dy. Director of IT, Indore, which is quite as sketchy does not prove the thing in favor of the Department/does not disprove the genuineness of purchases. Such a report of Dy. Director of IT, Indore in respect of M/s Pooja Steel Sales deserves to be rejected. As far as the report of the Dy. Director of IT with M/s Ashirwad Steels is concerned, the existence of the concerns, a few years before the date of completion has not been denied. The transaction of purchases by way of regular sale bills and subsequent payments etc. discharged the onus of genuineness of purchases as far as the appellant is concerned. An investigation by the purchaser as to who operates the bank account of the seller or the group of sellers is not in the domain of the purchasers (appellant). The rules regarding onus of proof as laid down in the statute/case law, are quite flexible. The payment through banking channel is the essence of transaction so as to decide genuineness while deciding upon the question of onus of proof. On a careful consideration, I am of the opinion that the purchases from the above said parties could not be treated as not genuineness and hence purchases made from them (above said to parties) are to be treated as allowable deduction. The addition made of Rs. 33,13,706 is hereby deleted.

In the appeal filed by the revenue against the aforesaid order of CIT(A) we find that the Tribunal has recorded a categorical finding that the assessee has satisfactorily explained the details and modes of payment of raw material purchased through both the concerns namely M/s Pooja Steel Sales and M/s Ashirwad Steels. The CIT(A) and the Tribunal have recorded a finding of fact that the AO is not correct in doubting the purchase made through the said concerns.

In view of the aforesaid finding of fact recorded by the CIT[A) affirmed by the Tribunal, we find no ground to interfere into the same. In our considered view, no question of law arises in this appeal.

Accordingly, the appeal fails and is hereby dismissed.