TaxTMI 
TaxTMI 
2018 (6) TMI 1313
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.... CIT(A) has erred in deleting addition of Rs. 8759437/- made by the Assessing Officer on account unverifiable purchase made from M/s Reliance Metal India. 3. The appellant craves leave to add, amend any/all the grounds of appeal before of during the course of hearing of the appeal." 2. The grounds raised in appeal by the Assessee in ITA No. 5610/Del/2014 are reproduced as under: "1. That the order passed by the Ld. CIT(A) XXXI is bad in Law & on facts. 2. That the Ld. CIT(A) has erred in not allowing the claim of Rs. 15,66,869/- on account of Leave Encashment u/s 43B of the Income Tax Act, 1961. 3. That the Ld. CIT(A) has erred in not allowing withdrawal of interest disallowance of Rs. 1,39,462/- u/s 14A read with Rule 8D of the Income Tax Rules 1962. 4. That the assessee craves, leaves to alter, amend, vary, add any grounds of Appeal." 3. Briefly stated facts of the case are that the assessee company filed its return of income for the year under consideration on 20/09/2011 at total income of Rs. 9,36,19,769/-. The case was selected for a scrutiny and notice under section 143(2) of the Income-tax Act 1961 (in short th 'Act' ) was i....
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.... the facts remain that the assessee cannot produce Mr. S.P. Dewasi Prop of M/s Reliable Metal (India) nor could assessee file fresh confirmation from the Reliable Metal (India). The assessee has also submitted copy of bank accoutns and details of apyments made through RTGS to M/s Reaince Metal (India). The payments made by the assessee are appreaing in the bank account of M/s Reliable Metal (India)., whch has been obtained form the bank u/s 133(6) of the IT Act. The assessee has submitted that it has made genuine pruchase and has made sale of those goods at a profit of Rs. 2.99 lacsk. The contention of the assessee is not acceptable in view of the following:- a. Assessee has not filed fresh confirmation of reliable metal india. b. Assessee has not been abvle to produce the " supplier" c. There is an affidavit filed bythe supplier before VAT Department that he has not made any transactions. view of above discussiion purchases of Rs. 87,59,437/- made from Reliable Metal is disallowed and added to assessee's declared income. Therefore, provision of section 27191)(c) of the IT Act are attracted. Penalty proceedings u/s 271(1)(c) have been initiated sepe....
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....nt contents of ITAT's order incorporated in the order of the Hon'ble High court at page 208 & 209 are reproduced below for ready reference: 4.2.13 The AR has submitted that the AO was asking the assessee to do something which was impossible. He has pointed out that the Maharashtra VAT authorities had visited supplier's premises and found them to be closed. The authorities had not been able to record the supplier's statement and that the affidavit sent by him was merely a photocopy. On the basis of the findings of Hon'ble ITAT in the case of Sunrise Tooling Systems Pvt. Ltd. (Supra), I have to hold that on submissions of primary documents the onus of the assessee to prove the purchases stood discharged. 4.2.14 Now the question is whether in the light of findings of Maharashtra VAT authorities there was extra burden on the assessee to establish the genuineness of the purchases. In the case of Sunrise Tooling Systems Pvt. Ltd. also (Supra) similar situation arose in view of the statement of the Director of the company. In that case Hon'ble ITAT noted that the AO cannot deny the claimed purchases when the sales made have been accepted. It also went into the trading re....
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....ion of the AO. 4.2.17 It is noted here that, it is not as if the supplier was not at all in existence Even the report of the Maharashtra VAT authorities reproduced in the assessment order indicate that the supplier was operating from two premises which, however, were found closed (or left by the party) during the subsequent financial year. There is a failure in getting clear and unambiguous adverse evidence and its confrontation before the appellant. The appellant cannot be held responsible for the same. This is not a case of purchases being shown without sale of goods. Further, the AO has examined the stock register which has all the relevant entries. The AO has not found any discrepancies in the same. In view of this, it has to be held that the purchases shown in the name of Reliable Metal (India) cannot be disallowed. It is possible that the appellant might have taken only purchase bill from the said party and has obtained the goods from some other source who did not give the bill. (This fact however has not been established). In such situation, it is not the case of any concealment of income. The AO, could have rightly suspected the value of purchase and sales. In the ....
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....ity of the assessee in producing the said supplier. According to him, the said proprietor Mr. S.P. Dewasi of M/s Reliable Metal India was even could not be traced by the VAT Department, how it was possible for the assessee to produce him. The assessee discharged his onus of substantiating the purchases and therefore no disallowance could have been made in the case of the assessee. In support of the contention, he relied on the order of the Ld. CIT(A). He further submitted that if the purchases of the assessee are not genuine, in that case corresponding sales should also be removed and the assessee should be granted relief accordingly. According to him, there was no leakage of revenue as the supplier has recorded sales in its books of accounts and the assessee has recorded the same as purchase and offered the gross profit of Rs. 2.99 Lacs on said purchase transactions. 10. We have heard the rival submissions and perused the relevant metal on record including the Paper Book filed by the assessee. In the case before us the dispute is in respect of purchases of Rs. 87,59,437 /- shown by the assessee in its books of accounts from M/s Reliable Metal India. A copy of all such bills iss....
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....ods were sold to the parties, who has confirmed receipt of the goods and entries of purchases and sales are entered in the stock register, which was duly produced before the Assessing Officer. 15. Regarding the contention of entries in stock register, before us, the assessee submitted a statement of purchases and sales, which is available on page 1 to 25 of the Paper Book. This statement has been claimed as stock register. This register contains party wise purchase bill and quantity details and corresponding sales of the same items. We have observed a unique feature in said register that exactly identical quantity is recorded in sale bill corresponding to each purchase bill. For ready reference, we are reproducing the purchase bills, items and quantity in respect of purchases made from one of the party, namely Essar Steel Limited and corresponding sales, which are available on page 24 of the Paper Book, as under: PURCHASE INVOICE PURCHASE INVOICE DATE ITEM DESCRIPTION QTY UOM SALES INVOICE SALES INVOCIE DATE QTY UOM NAME OF THE PARTY 155542 04/01/2011 PLATES 4.92 MT 156/036 31-JAN11 4.92 MT 6.90 NTPC (RIHAND) LTD. 155540 04/0....
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.... 17.50 MT 172/07 11-FEB-11 17.50 MT 7.88 POWERFEN INFRASTRUCTURE (L.L.C) FOHS 198294 27/02/2011 PLATES 9.04 MT NON BILLABLE 9.04 MT 0.00 POWERFEN INFRASTRUCTURE (L.L.C) FOHS 198295 27/02/2011 PLATES 6.69 MT NON BILLABLE 6.69 MT 0.00 POWERFEN INFRASTRUCTURE (L.L.C) FOHS Similar details in case of purchases from M/s Reliable Metal India are available on page 6 of the Paper Book, which are reproduced as under for ready reference: Purchase invoice Purchase invoice date Item descriptio n QTY. UOM PURCHASE AMOUNT Sales invoice SALES INVOICE DATE QTY.UOM CUSTO MER NAME RMI/152/10 25-Jun-10 S.S. Sheet/Plate 8995 KGS 18.80 063/MH/063 25-JUN-10 8995 KGS 19.44 BALAJI ENTERPR ISE RMI/151/10 24-Jun-10 S.S. PIPE 5215 KGS 10.43 060/MH/060 24- JUN-10 10.69 D.M.METAL RMI/149/10 24-Jun-10 S.S. PIPE 2575 KGS 7.57 057/MH/057 24-JUN- 10 2575KGS 7.85 SHAILES H METAL CORP. RMI/147/10 23-Jun-10 S.S.SHEET/ PLATE 9225 KGS 18.08 052/MH/052 23- JUN-10 9225 KGS 18.91 BALAJI ENTERPR EISE RMI/144/10 22-Jun-10 S.S. P....
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....es recorded in books of accounts are confirmed but the purchase are not getting confirmed, the only possibility is that the assessee has purchased goods in cash from grey market and the payment made subsequently through cheque or RTGS are received back in cash or transferred by way of cheque or RTGS to other related concerns. 20. In the instant case goods have been shown as purchased between 21/06/2010 to 25/06/2010, whereas payments for those purchases have been shown to have made from 21/10/2010 to 10/02/2011. The assessee has shown payment to M/s Reliable Metal India through RTGS, details of which, available on Page 46 of the Paper Book, are reproduced as under: Details of Amount Trnsfrd thru RTGS Party Amount Bank Dtd CHEQUE NOS 1. Reliable Metal 1150000.00 icici 21/10/2010 535146 2 Reliable Metal 1500000.00 Icici 25/10/2010 536276 3 Reliable Metal 455749.00 Sbi 25/10/2010 069846 4 Reliable Metal 750000.00 Icici 28/10/2010 536288 5 Reliable Metal 666064.00 Icici 09/12/2012 550117 6 Reliable Metal 500000.00 Sbi 18/01/2011 277332 7 ....
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....Court in the case of Goegtz (I) Ltd. wherein it was held that the AO cannot entertain any claim made without revising the return of income. 4.3.2 During the appeal proceedings, the AR has submitted that the matter is pending before Hon'ble Supreme Court and that a direction may be given to the AO to allow the expenses on the final outcome of the matter pending before the Hon'ble Supreme Court. 4.3.3 It is noted that for the present year the appellant has not made any claim in the return of income. Therefore, the AO has rightly rejected the claim. Moreover, on the same issue I have already held in the appellant's own case for A.Y. 2009-10 that the appellant was not eligible for the claim as the words in Section 43B(f) of the IT Act are very clear and no claim is enteratinable unless there is actual payment during the year. Following my order dated 09/12/2012 in the appellant's own case for A.Y. 2009-10 and for the same reasons, this ground is rejected." 24.1 Before us the Ld. Counsel reiterated the submission made before the Ld. CIT(A), whereas the Ld. DR relied on the finding of the Ld. CIT(A). 24.2 We have heard the rival submission and perused the relevant....