2019 (2) TMI 1514

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....nt under Section 143(3) on 30.11.2011. 2. The relevant parts of the impugned re-assessment notice reads as follows: "Information was received from ITO (investigation) Unit-2 New Delhi vide letter F.No. ITO(Inv.)/U-2/S-56/201516/ 307 dated 28.03.2016. The contents of the letter are as under: 2. During the course of investigation on a STR No.1000062089 (UIN 120718442) in the case of M/s AVS Mann and CO, K-11, 1st Floor, Rajouri Garden, New Delhi110027 received in this office. 3. In the dissemination note it has been stated that "The bank has identified an account no.207010200013439 in the name of Revolution Forever Mkt. Wherein, frequent intersol cash deposites. Transfers and clearing are seen. The total turnover of the account since ac....

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....re are transfer transactions between Account of Revolution Forever Mkt. Ltd. and various account herein mentioned as related account. There is a trend of transfers from main account and clearing credits following by cash withdrawals and clearing debit in all the related accounts. Based on the nature of transactions resembling of MLM activity and internet findings, intent of the customer is suspicious." 4. From the replies/submissions made by ARs of the assessee during the investigation proceedings viz-a-viz allegation made in the STR, the following points emerges:- (a) In the STR the bank identified on account no. 20701020013439 maintained with Axis Bank Ltd. C-3/21, Janakpuri, Delhi-58 which belongs to M/s Revolution Forever Marketing Pv....

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....hich specialises in FMCG products, transacts through various group companies/sister concerns, which are tasked to perform specific work on territorial and other defined basis. Its marketing model is dependent heavily upon cash receipts from consumers who subscribe to its segments, as members at various levels. Being a cash intensive transaction model, the business reflects deposits in the assessee's accounts. 4. Mr. S. Krishnan, learned counsel for the petitioner contends on behalf of the petitioner that once the scrutiny assessment was complete, based upon all the relevant material such as bank account statements, information vis.-a-vis sundry creditors and answers to the queries given apparently to the specification of the AO, the dredgi....

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....casion satisfied herself/himself as to the veracity of the statements made and even that the relevant particulars relating to the bank accounts [together with the account statements for the concerned year] and all entries had been furnished. Furthermore, the AO was also aware of the fact that the assessee was engaged in multi-level marketing business model, which is dependent on cash intensive transactions that in turn leads to deposit of cash on daily basis in high volume. The material on record - the balance sheets filed along with the return disclosed the bank accounts and its particulars. The assessee had by a letter dated 19.09.2011 replied to various queries addressed to it by the AO in reply to the notice in the course of scrutiny pr....