TaxTMI 
TaxTMI 
2015 (3) TMI 970
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2. The brief facts of the case are that the assessee is a firm trading in telecom products, being an authorized Distributor of Mahanagar Telephone Nigam Ltd. ('MTNL' for short) for sale of coupons/recharge vouchers of mobile/cell phones. In verification of its purchases, made and claimed at Rs. 5692.81 lacs per its accounts, during the course of the assessment proceedings for the relevant year, it submitted the following details: i) Mahanagar Telephone Nigam Ltd., Currey Road, Mumbai Rs.56,89,70,187/- ii) Maniar Associates, 44, Nagdevi Cross Lane, 3rd Floor, Mumbai-400 003 Rs.2,76,812/- Total Rs.56,92,46,999/- Notice u/s. 133(6) was issued to M/s. Maniar Associates, Mumbai ('MA' for short), ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to the extent of the said purchases, inferring them as bogus. The assessee reiterated its case in appeal, also relying on the reply to its letter dated 21.09.2007 to AGM (Sales), MTNL with regard to the lost Trump recharge and VCC coupons. As informed by MTNL, the lost cards had been issued to another distributor, MA, and which would thus prove the assessee's case in-as-much as the cards issued to MA could only be sold by it (assessee) if its' claim of loan of goods there-from was true. The same, as well as the ledger account of MA as appearing in the assessee's books, were dismissed as only self-serving, and a result of an afterthought. There was no contemporary voucher/material to exhibit the loan transaction/s, in the absence....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... i.e., prove the truth of its stock records inasmuch MA has denied the same, casting a doubt on the assessee's version. 3.2 The first thing that strikes us is that the assessee's explanation has to be taken and considered as a whole. Considering the 'purchase' part as untrue, while accepting the 'sale' part, as has been done by the Revenue, would be myopic. The Revenue has, in our view, rather than subjecting the assessee's explanation to appropriate verification in-as-much as the corresponding party - MA, had responded to the notice u/s.133(6) denying the transactions, proceeded without due discrimination and application of mind. Was the stock of the relevant goods (recharge coupons) with the assessee indeed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hereto. Further still, the loan transaction being unofficial, in-as-much as the relevant goods could be validly sourced only from MTNL, what document/s was generated between the parties to evidence the same. This would be necessary to safeguard one from a denial of the transaction by another (debtor), or, as indeed as happed in the instant case, demise or otherwise absentia of one of the persons to the transaction. Could, for example, the said recharge vouchers, if only on a test check basis, be got verified from MTNL as to their supply, i.e., originally. If ratified by it (MTNL), as indeed the assessee's claims with reference to the reply to its letter to MTNL, written to report lost cards, the assessee's claim would stand valid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ccount books are as kept and maintained in the regular course of its business, while the enquiry by the Revenue was only much later, in, as it appears, February, 2009, followed by notice u/s.133(6) on 05.03.2009. The transaction/s with MA, as per the assessee's books of account, occurred during the period 15.07.2006 to 04.09.2006, prior to the demise of its main person, i.e., Shri P. B. Maniar, on 16.09.2006. The plea of the successor being not, therefore, aware of the transactions, which are generally not recorded in accounts is not without merit. Did the assessee deliberately record the purchases and sales on those dates, which are ostensibly guided by its stock levels on those dates? Then, again, how could the letter dated 21.09.2007....