TaxTMI 
TaxTMI 
2020 (8) TMI 506
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....pany. Assessing Officer in the assessment order has noted that assessee has not responded to various notices though he has filed certain details. The AO has also issued notice u/s 133(6) to M/s Maa Durga Trading Company and also to other parties from whom assessee has purchased materials during the relevant year. However, he has not discussed as to what was the reply and confirmation received from the said parties. As regards purchases made from M/s Maa Durga Trading Company, he observed that assessee has failed to produce supporting evidences of purchases but did not discussed what details assessee has furnished, and accordingly, he passed an assessment order u/s 144/147 treating the entire purchase of Rs. 13,09,552/- as bogus. 3. Before the Ld. CIT (A), the assessee objected to the various observations of the AO and submitted that all the supporting evidences pertaining to purchase made from M/s Maa Durga Trading Company were furnished before the AO, including the copies of bills, transit challans, VAT assessment order, ledger accounts of purchases and ledger account of M/s Maa Durga Trading Company. The case was remanded to the AO to submit his report. In his report, AO stated....
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....1,69,220/- whereas the sale made in the month of April are shown at Rs. 2,88,456/-. Even if it is assumed that all the items purchased by the appellant in the month of April were sold in the month of April itself and no item was carried forward even then the profit arising on account of sales in the month of April works out to Rs. 1,19,236/- which is 70% of the cost of purchases. Similarly, the purchases made in the month of May have been shown at Rs. 2,81,654/- and the sales have been shown at Rs. 3,53,955/-. Showing the profit of Rs. 72,301/- which is almost 25% of the cost of purchases. It is further seen that in the month of March the total sales have been shown at Rs. 4,88,891/- as against purchases of Rs. 4,56,776/- and no amount of closing stock has been shown implying thereby that all the purchases made till 31.03.2008 were sold. Even if it is assumed that no amount of stock was available out of the earlier purchases as on 01.03.2008, the figures imply that the appellant had incurred a loss of Rs. 67,885/- in the month of March, 2008. Similar variation can be noted in the other monthly figures also. Such huge variations in the figures of profit clearly imply that the figure....
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....ction in subsequent years, hence it was difficult for the assessee to give the current address. He further submitted that assessee is in the business of job work of industrial tools and machine components and is also engaged in the manufacturing for the same items for which he has purchased alloy steel. Entire quantitative details of purchase of raw material and consumed were furnished, the copy of which at pages 51 & 52 of the PB. 6. He further submitted that, even Ld. CIT (A) has misappreciated the facts and there was a gap of 16 months between the last hearing and the passing of the order. He also explained as to how the various observation of the Ld. CIT (A) is incorrect. Insofar as the observation regarding opening balance and lack of furnishing of complete ledger account, he pointed out that before the Ld. CIT (A) the assessee had filed complete account. First of all, he pointed out that the Ld. CIT (A) has observed that entire entry has not been given, is not correct, as there was only difference of one entry of 13th March which too was furnished to him and was specifically shown that the payment was made through cheques and there is absolutely no difference in the opening....
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....eels. Insofar as the controversy regarding the purchases made from M/s Maa Durga Trading Company, the assessee before the AO had furnished; a) monthwise detail of sale and purchase with complete name and address and the bank statement to show the source of purchase, i.e., through account payee cheques; b) complete books of account alongwith sale and purchase invoices; c) copies of bills/transit challan for purchases made from M/s Maa Durga Trading Company issued by VAT Deparmtent, Haryana; d) Dharam Kanta slip; e) VAT assessment order; f) ledger account of purchases, etc. 9. Apart from these facts, the assessee has also filed stock summary of all the raw materials purchased during the year and also items shown in the purchase register. Assessee had shown sales from manufacturing at Rs. 51,60,236/- and income from job work charges at Rs. 21,93,607/-. The dispute regarding the purchase of alloy steel from M/s Maa Durga Trading Company is on manufacturing account. Neither the stock register nor any items of purchase and sales have been disputed by the Assessing Officer, except for purchases made from M/s Maa Durga Trading Company for sums aggregating to Rs. 13,09,552/-, which has bee....