TaxTMI 
TaxTMI 
2024 (4) TMI 742
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....such sales could not be separately assessed to tax as bogus sales and unexplained cash credit u/s 68 of the Act. 3. Whereas the questions proposed by the ld. Judicial Member, are as under: 1. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) has justified in confirming the addition on account of bogus sales, when assessee through his partners admitted on oath that there is no movement of goods and it was introduction of unaccounted amount to the Assessee's bank account? 2. Whether on the facts by circumstances of case and in law, the Assessee has introduced his unaccounted money into his bank account without proving of the holding such stocks before the 'Sales' more so the partners of the Assessee firm have categorically admitted that there is no movement of goods and it was introduction of unaccounted amount to the Assessee's bank account, can the assessee claim the such 'sales' as 'Genuine one'?. 3. Whether on facts by circumstances of case and in law, the lower authorities were justified in holding that the transactions of sales are not genuine, making addition based on the finding that the Assessee has not satisfact....
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....e director of M/s. RBPL, a statement was recorded u/s. 132(4) of the Act. Wherein, he stated that the cash deposited in the bank account of M/s. RBPL was given to him by Shri Rajesh Chawla owner of M/s. DL Heera Bhai Jewellery Arcade P. Ltd. for depositing in the account of M/s. RBPL and subsequent transfer of the fund to specific bank accounts on commission basis. 6. He further found that as per the investigation carried out by the Investigation Wing, the assessee had purportedly sold gold and bullions to 44 entities controlled and managed by an entry operator, namely, Shri Sonu Punjabi, which are sham transactions. He also found that such transactions were carried out during the demonetization period. It is alleged by the Assessing Officer, that though notices u/s. 133(6) of the Act as well as summons u/s. 131 of the Act were issued, the concerned entities, who supposedly purchased gold and bullion from the assessee, however, no information came from such entities as most of the summons returned back un-served. He also observed that, as per the information available, those 44 entities had never done any purchases from the assessee except during the period of demonetization. He a....
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....Rs. 19,30,000/- to M/s. Olivia Tradelinks India P. Ltd., towards sale of gold/bullion. He observed that, in course of survey conducted in the case of M/s. Olivia Tradelinks India P. Ltd., it was found that the said company was incorporated in January 2015 and in AY 2015-16 it has filed the return of income offering NIL income without any turnover. Whereas, huge amount of cash was found to have been deposited in the bank account of M/s. Olivia Tradelinks India P. Ltd., which suggested that the entity is an entry provider. He found that in the year under consideration M/s. Olivia Tradelinks India P. Ltd., had transferred an amount of Rs. 90,30,000/- to the assessee. He further found that as per the bank statement of the said entity an amount of Rs. 90,30,000/- was deposited in cash on 24.11.2016 and on the same day cash of Rs. 90,30,000/- was transferred to the account of the assessee. From the aforesaid facts, he concluded that the purported sale of gold and bullion amounting to Rs. 90,30,000/- to M/s. Olivia Tradelinks India P. Ltd., is bogus. Accordingly, he treated the amount in dispute as unexplained cash credit u/s. 68 r.w.s 115BBE of the Act and added back to the income of the....
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....f accounts maintained by the assessee. He submitted, the Assessing Officer has not drawn any adverse inference either with regard to the maintenance of books of accounts or the entries made therein. He submitted, to prove the identity and creditworthiness of the purchaser entities the assessee has furnished various documentary evidences including VAT returns and VAT assessment orders. He submitted, the assessee has also furnished the details of suppliers from whom it had purchased gold/bullion. He submitted, in response to inquiry conducted u/s. 133(6) of the Act all suppliers have confirmed the transaction with the assessee. He submitted, merely because some of the purchases, who have purchased gold/bullion from the assessee, did not respond to notice issued u/s. 133(6) of the Act, or summons u/s. 131 of the Act, the sales cannot be treated as bogus. As regards the statement recorded from partners of the assessee firm, ld. Counsel submitted, they are not at all relevant for the disputed addition nor the Assessing Officer himself, has relied upon them while making the addition. Without prejudice, he submitted, under no circumstances the addition can be made u/s. 69 of the Act, as h....
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....discussed earlier, the core issue arising for consideration is whether the disputed addition made u/s. 68 of the Act representing alleged bogus sales can be sustained. Alternatively, whether such addition can be made u/s. 69 of the Act as against section 68 of the Act. Undisputedly, in the year under consideration, the assessee has declared total sales turnover of Rs. 163.98 crores. Out of which, as alleged by the Department, sales worth Rs. 109.07 crores were made during the month of November 2016, after declaration of demonetization of Rs. 1000/- and Rs. 500/- currency notes. It is interesting to note, out of the total sales made of Rs. 163.98 crores the Departmental Authority have disputed/doubted sales worth Rs. 72,15,97,386/-.Even, sales worth Rs. 37 crores made during the demonetization period have been accepted by the Departmental Authorities. The Assessing Officer has identified and made additions in the following four categories of alleged sham transactions: (i) sales to 44 entities purportedly belonging to Shri Sonu Punjabi - Rs. 49,19,43,623/- (ii) sales to M/s. Ringing Bells Pvt. Ltd., - Rs. 20,87,02,970/- (iii) sales to M/s. Olivia Tradelinks India P. Ltd., - Rs.....
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....epositing in the bank account of M/s. RBPL. I fail to understand how the purported cash deposit in the bank account of M/s. RBPL, even assuming it to be correct, can prove that the sales effected by the assessee to M/s. RBPL is non genuine. On the contrary, it proves availability of fund with M/s. RBPL to effect the purchases from the assessee. Even in respect of the sales made to M/s. RBPL the assessee has furnished all documentary evidences including audited books of accounts, item wise purchase and sales, VAT return, VAT assessment orders, stock register etc. to prove the genuineness of sales. Admittedly, the Assessing Officer has not found any discrepancy or deficiency in the books of accounts and stock register maintained by the assessee. Thus, when the assessee has maintained item wise purchase and sale details as well as stock register and, moreover neither in course of survey any stock discrepancy was found nor any unaccounted cash was found, certain sales cannot be treated as bogus. More so, when one of the directors of RBPL has stated before the Assessing Officer that he had taken delivery of gold/bullion purchased from assessee. 15. Similar is the factual position qua t....
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.... the assessee offers no explanation about the nature and source of the investments or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the value of the investments may be deemed to be the income of the assessee of such financial year. 18. On a plain reading of the aforesaid provision it becomes clear that the provision gets attracted subject to fulfillment of the following conditions: (i) there must be an investment by the assessee in the financial year relevant to assessment year for which assessment is being made; (ii) such investment has not been recorded in the books of accounts, if any, maintained by the assessee; (iii) the assessee offers no explanation about the nature and source of investment or the explanation offered is not acceptable. 19. In the facts of the present appeal, it is an admitted factual position that the disputed transactions are duly recorded in the books of accounts of the assessee. Therefore, at the very threshold the provisions of section 69 will not get attracted. In fact, learned Standing Counsel appearing for the Revenue fairly accepted aforesaid factual and legal position. In any case of the matter....