Pr Commissioner Of Income Tax, District Udaipur v. M/S Samarpan Synthetics Pvt Ltd

HIGH COURT OF JUDICATURE FOR RAJASTHAN ATJODHPUR D.B. Income Tax Appeal No. 17/2021 Pr Commissioner Of Income Tax, District Udaipur ----Appellant Versus M/s Samarpan Synthetics Pvt Ltd, 54, Bhilwara Textiles Market,Pur Road, Bhilwara ----Respondent For Appellant(s) : Mr. K.K. Bissa. HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MS. JUSTICE REKHA BORANA 04/03/2022 Order This appeal is filed by the revenue to challenge the judgment of the Income Tax Appellate Tribunal. Following questions are presented for our consideration. “1.Whether on the facts and in the circumstancesof the case and in law, the ld. ITAT was justified inconfirming the order of the CIT(A) by deleting theaddition of Rs.7,82, 95,551/- as made by the AO u/s69 of the Act, 1961 on account of purchases madebut not recorded the same in regular books ofaccount.2.Whether the ITAT has failed to appreciate thefact that the purchase of finished fabrics to the tuneof Rs.7,82,95,551/- was not entered in the books ofaccounts and also sale thereof were made out ofbooks of accounts and thus the ITAT was not correctdeleting the addition of Rs.1,23,87,853/- as made bythe AO on account of profit against sale ofunaccounted purchases of goods?” Though two questions have been made, the issue is single,namely, deletion of a sum of Rs.7,82,95,551/- added in the handsof the assessee by the assessing officer under Section 69 of theIncome-tax Act, 1961. According to the assessing officer this sum represented theassessee’s unexplained investment. The Commissioner (Appeals)and the Tribunal however deleted this addition on the ground thatthe purchases were reflected in the books of accounts by theassessee and were not made from unexplained sources. Inparticular, the relevant portion of the judgment of the Tribunalreads as under:- “8.From perusal of the record, we noticed that theentire addition made by the AO is on the basis ofpurchase details of finished fabrics above Rs.1,00,000/-submitted by the assessee vide letter dated 09.11.2018along with the ledger account and sample bills. In thisletter details of 10 parties from whom purchase offinished fabrics was made is given. This list includesname of six parties from whom no purchases were in factmade. Rather the purchases made from M/s MaximumSynthetics Pvt. Ltd. Of Rs.10,00,68,034/- was bifurcatedin the name of these six parties as explained vide letterdated 21.12.2018 and the details of the same are alreadymentioned in earlier paragraph of this order. 9.We also observe from the record that quantity andthe amount of purchases made from M/s MaximumSynthetics Pvt. Ltd. is duly recorded in the regular booksof accounts and the same is also supported by the stockrecords. Only for the bank purpose, purchase is shownto the banker in seven names including M/s MaximumSynthetics Pvt. Ltd. as the assessee was under theapprehension that if purchase from one party of Rs.10 cr.is shown to the bank it may lead to adverse opinion fromthe bankers for grant of limit inasmuch as the bankermay take a view that assessee is mainly dependent onpurchases from one supplier only and therefore the saidbifurcation was provided to the bank which was alsosubmitted to the AO but the fact remains is that nopurchase is made from these six parties and therefore,the same is not part of books of accounts.” It could thus be seen that the entire issue is based on facts.The Commissioner (Appeals) and the Tribunal concurrently cameto findings of facts which are not perverse. The Tribunal in theabove quoted portion of the order has accepted the explanation of It could thus be seen that the entire issue is based on facts.The Commissioner (Appeals) and the Tribunal concurrently cameto findings of facts which are not perverse. The Tribunal in theabove quoted portion of the order has accepted the explanation of the assessee that the entire purchase was made from M/s.Maximum Synthetics Pvt. Ltd. and it was also duly recorded in theregular books of accounts. However, the assessee had shown suchpurchases from different parties only for the purpose of showingthe purchases from multiple sellers to the bank. This was done toobtain higher spending limit from the bankers. No question of lawarises. The appeal is dismissed. (REKHA BORANA),J 10-a.asopa/- (AKIL KURESHI),CJ