TaxTMI 
TaxTMI 
2024 (2) TMI 931
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee company has only repeated its previous submission and has failed to provide any documents showing that AY Palace DMCC, has actually rendered commission services to procure buyers for assessee company without any documentary proof of services rendered by AY Palace DMCC, the commission paid by asssesse company cannot be confirmed to be legitimate. The Assesse company also failed to provide contra-confirmation from the customers regarding services rendered by AY Palace DMCC. The invoices raised by the various parties as provided by the assessee company also make no mention of AV Palace DMCC that has allegedly served to connect them to the assessee company. In absence of any documentary proof of services rendered by AV Palace DMCC, a sum of hundred percent of the commission payment of Rs.3,20,77,873/- is hereby disallowed and added back to the income of the assessee company. Penalty proceedings u/s 270A(8) of the .T. Act, 1961 for misreporting of income are also separately initiated (Addition:Disallowance of commission payment amounting to Rs.3,20,77,873/-) .... 4.4.1 The assessees reply was perused. And kept on record but is not acceptable. T....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The assessee company has claimed to have purchased gold (including jewellery) of over 296 kgs from Ms. Surana Corporation Ltd. and yet the assessee company, despite multiple opportunities, has not been able to produce a single document that can prove that the 296 kgs of gold and jewellery actually were transported to the assessee's facility and were put to use by the assessee. 4.6.2.1 Even the invoices provided by the assessee are very sketchy and vague in nature that do not even mention the details of items for which the invoice is being raised (despite the details being exhaustively mentioned in the terms and conditions of the auction sale). This is completely counter to the prevalent practices in the gold & jewellery sector where even small quantity items ate itemized and billed in detail. Even the status of payment or bank statements have not been provided by the assessee in response to the show cause notice to support its claim nor has the assessee company pointed out the corresponding sales made through the relevant stock ledgers. Also, significantly, Surana Corporation Limited has not even filed its Incometax return for AY 2020-21 or AY 2021-22 nor has respond....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tions filed by the petitioner, computed a sum of Rs.240,18,97,031/- as the total income of the petitioner. 9. It is submitted that the foreign commission of Rs.3,20,77,873/- and local commission of Rs.81,00,000/- and purchases made for a Sum of Rs.234,15,30,188 was wrongly disallowed in the impugned Assessment Order dated 28.12.2022 under section 143(3) r.w.s 144B on 28.12.2022 and a demand of Rs.75,63,06,260/-has been wrongly raised. Hence, the present Writ Petition. 10. The learned Senior Counsel for the petitioner submits that in the notice issued to the petitioner under Section 142(1) of the Income Tax Act on 07.11.2022, , the petitioner was called upon to furnish the following : - ANNEXURE The following accounts or documents or information is/are sought under Section 142(1) of the Income-Tax Act, 1961. 1. Please furnish a detailed note on the business activities carried on during the FY 2020-2021. 2. Furnish the computation of income along with the details of income earned by you under various heads during the previous year relating to AY 2021-2022. 3. Please provide copy of balance sheet, audit report, P&L account and any oth....
X X X X Extracts X X X X
X X X X Extracts X X X X
....38(14). S. No. Description of Goods 4. Natural or cultured pearls and precious or semi-precious stones; precious metals and metals clad with precious metal (Chapter 71) 5. Jewellery, goldsmiths' and silversmiths' wares and other articles (Chapter 71) 17. It is submitted that even though, the petitioner was not called upon to furnish e-way bills and LR receipts for purchase of Bullion and Gold Jewellery, in the Impugned Order, the Assessing officer has concluded that these were "unexplained expenses" on the assumption that the petitioner has not proved that they were genuine purchase transactions and that the petitioner has also not proved the actual transportation of these goods. 18. The learned Senior Counsel for the petitioner further adds that the purchase from M/s.Surana Corporation Limited was both gold jewellery and gold bullion, whereas, purchases from the other two companies namely M/s.Shiv Sahai & Sons (India) Private Limited and M/s.Diamond India Limited were gold bullion. It is therefore submitted that the question of producing the e-way bills and lorry receipts did not arise under law. 19. It is submitted that question of furnishing In....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... case (referred to supra) of the Division Bench of the Bombay High Court, attention was drawn to Paragraph 8, which reads as follows:- "8. In the present case, as noted above, the assessee was a trader of fabrics. The A.O. found three entities who were indulging in bogus billing activities. A.O. found that the purchases made by the assessee from these entities were bogus. This being a finding of fact, we have proceeded on such basis. Despite this, the question arises whether the Revenue is correct in contending that the entire purchase amount should be added by way of assessee's additional income or the assessee is correct in contending that such logic cannot be applied. The finding of the CIT(A) and the Tribunal would suggest that the department had not disputed the assessee's sales. There was no discrepancy between the purchases shown by the assessee and the sales declared. That being the position, the Tribunal was correct in coming to the conclusion that the purchases cannot be rejected without distributing the sales in case of a trader." 26. The learned senior counsel for the petitioner submits that in case the expenses were to be disallowed, the profit made....
X X X X Extracts X X X X
X X X X Extracts X X X X
....was also given adequate opportunities to reply to the notices issued under Section 143(2) & 142(1) and Show Cause Notice to which the petitioner has given only a partial reply as detailed below:- Type of notice/communication Date of notice/communication Date of compliance given Response of the assessee received/not received Date of response if received Response type (Full/part/a djournment) 143(2) 28.06.2022 13.07.2021 Not received 142(1) 02.08.2022 12.08.2022 Not received 142(1) 07.11.2022 11.11.2022 Received 10.11.2022 Full 142(1) 11.11.2022 16.11.2022 Received 12.11.2022 Part 142(1) 29.11.2022 06.12.2022 Received 06.09.2022 Adjournment 142(1) 07.12.2022 09.12.2022 Received 09.12.2022 Part SCN u/s. 143(3) 12.12.2022 16.12.2022 Received 15.12.2022 Part 36. It is further submitted that mere filing of GST returns of the seller is not sufficient to prove that they were genuine sales transactions with the petitioner. 37. It is submitted that even if it is to be believed there was sales transactions, the petiti....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... name of the foreign party. 44. It is further submitted that one of the sellers namely M/s.Shiv Sahai and Sons, is situated within 50 meters from the office of the petitioner and therefore proof of movement of goods is unwarranted. It is further submitted that the petitioner had also filed all the invoices, GSTR-2A and stock statement in support of the transactions between it and the parties and for consumption of stock. 45. It is further submitted that the respondent did not consider the statutory documents like from 15CB, payment advise issued by bank, invoices, party confirmation, ledger accounts and other documents filed in support of the commission paid to the foreign party M/s.AV Palace DMCC. 46. It is further submitted that the respondent has rejected the statutory documents i.e. from Form 16, bank statements, stock register, invoices, statutory forms i.e. GSTR-2A, ledger accounts, party confirmations and evidences and explanations, filed in respect of the commission paid to the local parties. The learned counsel further submitted that the respondent has failed to consider the tender and auction documents and other evidences in support of purchase of materials from ....