TaxTMI 
TaxTMI 
2025 (5) TMI 1703
X X X X Extracts X X X X
X X X X Extracts X X X X
....me for AY 2011-12 declaring a total income of Rs. 56,14,086/-. The assessee's case was selected for scrutiny and the statutory notices were duly served on the assessee. The Assessing officer (AO) completed the assessment by making the following additions: (i) Addition on account of bogus purchase -Rs. 37,84,29,954/- (ii) Addition on account of excess depreciation claimed -Rs. 51,80,357/- (iii) Disallowance under section 14A -Rs. 99,248/- 3. Aggrieved the assessee filed further appeal before the CIT(A). The CIT(A) gave partial relief to the assessee by deleting the additions made towards bogus purchases and by confirming the addition made by the AO towards excess depreciation and disallowance under section 14A of the Act. The revenue is in appeal before the Tribunal against the relief given by the CIT(A) towards bogus purchases. 4. The brief facts pertaining to the issue under consideration - The AO during the course of assessment proceeding issued notice under section 133(6) of the Act to 23 parties from whom the assessee has made purchases on 20.03.2014. Out of the same notices issued to 7 parties were returned un-served and he purchases from t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and report from the AO in this regard. The AO in the remand proceedings did not accept the additional evidences submitted by the assessee stating that notices under section 133(6) were issued to the parties on 20.02.2014 and not on 20.03.2014 as alleged by the assessee and therefore the details of parties submitted as additional evidence cannot be accepted. However during the course of remand proceedings examined the details submitted by the assessee from time to time. The AO once again issued notice under section 133(6) to all the 10 parties asking them to furnish the various details. The AO subsequently filed a remand report identifying certain discrepancies in the details furnished by the parties to the AO and also held that the entire details have not been furnished. Accordingly, the AO in the remand report stated that the purchase made from these parties have not been properly substantiated and that the findings of the AO in the original assessment proceeding had to be upheld. 6. The CIT(A) perused the remand report of the AO and the additional evidences filed by the assessee. The CIT(A) also called on the assessee to furnish the gross profit of last five years with and wit....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Report dated 19.01.2015 Submitted by the Dy. CIT, Circle 4(2)(2), Mumbai to the CIT(A)-9, Mumbai, in connection with the appellate proceedings in the assessee's case. (Total Pages: 5) 3. Statement of Shri Govardhan M. Dhoot dated 27.08.2013 Recorded under Section 131 of the Income-tax Act, 1961, during the course of survey proceedings under Section 133A, along with the covering letter issued by the Dy. CIT, Circle 1(2)(2), Mumbai. (Total Pages: 8) 4. Copy of the Order of the Hon'ble ITAT, Mumbai 'C' Bench dated 23.10.2017 In the case of Soman Sun Cili vs. Jt. CIT, Range-2, Kalyan for Assessment Year 2011-12 (ITA No. 2960/Mum/2016). (Total Pages: 5) 5. Copy of the Order of the Hon'ble Bombay High Court" In the case of Shoreline Hotel Pvt. Ltd. vs. CIT (Central)-1, Mumbai reported in [2018] 98 taxmann.com 234 (Bombay) (Total Pages: 8) The ld. DR submitted that additional evidence now submitted goes to root of the issue that the assessee has made bogus purchases and accordingly prayed for the admission of the same. 9. The ld. AR strongly objected the admission of the additional evidence stating t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he AO. Though the survey report was very much available, the AO relied only on the documents submitted by the parties and the assessee. The AO during remand proceedings has only recorded certain discrepancies in the documents and about few documents not being made available. The assessee was never confronted with the details found in hard disc impounded during the survey, during the proceedings before the lower authorities i.e. assessment proceedings, remand proceedings and appellate proceedings though the same was very much available with the lower authorities from 28.03.2014 as per revenue's own admission. Therefore the reason stated by the revenue that there was delay in collating the findings of the survey due to voluminous data is factually not correct and is contrary to the report filed by the revenue itself. From the facts elaborated herein above it is clear that the assessment from which the present appeal is emanating, is not based on the survey conducted in assessee's case and that survey findings have not been considered as part of the assessment. Therefore the survey and the findings of the survey are not as part of the present appeal filed by the revenue since ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing bank-funded payments to Krishna Structural Steel. (Annexure B) (iii) Dual Invoices with Same Number for Krishna Structural Steel: At PB-2, pages 371 and 374, two invoices bearing the same invoice number (Tax Invoice No. 654) from Krishna Structural Steel are enclosed. One is a system-generated invoice, while the other is a handwritten version, both reflecting different amounts. The issuance of two invoices with identical serial numbers but varying formats and amounts is a serious anomaly, strongly indicating possible fabrication of purchase bills and an attempt to inflate expenses through bogus purchases. (Annexure C) (iv) Contradiction in Ledger and Balance Sheet of Jay Industries: The assessee has placed the ledger account of Jay Industries at PB-1, pages 326-327, which shows a credit balance of 24,60,618 as on 31.03.2011. However, the balance sheet of Jay Industries, annexed at PB-1, page 365, reflects a sundry debtor balance from Mangalam Drugs to the tune of 29,60,778. The significant discrepancy of nearly Rs.5,00,000/- between the ledger and the balance sheet figures raises serious doubts about the genuineness of the transactions and suggests manipulatio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 20.02.2014 which is not correct for the reason that the assessee is not aware of any such notice being issued. The ld. AR submitted that the CIT(A) has called for a remand report and during the remand proceedings the AO once again issued notice under section 133(6) on the vendors to which 8 parties have responded. The ld AR brought to our attention that the AO in the notice under section 133(6) during remand proceedings has mentioned AY erroneously as AY 2010-11 and that the parties still responded to the AO with the relevant details. The ld. AR further brought to our attention that the AO issued a 3^rd notice under section 133(6) with correct AY and that the parties responded once again. Therefore, the ld. AR argued that the identity of the parties cannot be questioned after receiving response to 3 notices and that the parties have submitted all the relevant details required by the AO. The ld. AR further argued that the assessee has completely co-operated during the remand proceeding and that necessary evidences to substantiate the purchases were made available. The ld. AR submitted that since the AO did not accept the additional evidence during remand proceedings, the CIT(A) him....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eport, Purchase Order, Tax/Commercial Invoice ii) Tax Invoice No.T1265 dt.02.09.10 with Transporter's Consignment Note (2 No.s) 188 & 195, Tax/Commercial Invoice iii)Tax Invoice No.T1411 dt.17.09.10 with Raw Material Analysis Report, Goods Received Report, Purchase Order, Tax/Commercial Invoice i)Tax Invoice No.T110 dt.25.09.10 with Raw Material Analysis Report, Goods Received Report,Purchase Order Tax/Commercial Invoice, Transporter's Consignment Note (1 No.s) No.10 6. Party - Krishna Structural Steel India Ltd. - i)Tax Invoice No.654 dt.26.08.10 with Purchase Order, Goods Received Report, Tax Invoice No.654 dt.27.08.10 |, Delivery Challan, Transporter's Consignment Receipt,Computerised Weigh Bridge Slip, Goods Received Report (2 No.s) ii)Tax Invoice No.790 dt. 10.09.10 with Goods 'Received Report, Tax Invoice No. 790 dt.10.09.10, Purchase Order, Transporter's Consignment Receipt,Computerised Weigh Bridge Slip, Delivery Challan, iii)Tax Invoice No.760 dt. 21.08.10 with Purchase Order, Goods Received Report(2 No.s), Transporter's Consignment Receipt, iv)Tax Invoice No.1101 dt. 07.10.10 with Purchase Order, Goods Received ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sis Report, Delivery Challan, Transporter's Consignment Receipt, Computerised Weigh Bridge Slip Purchase Order, xiv) Tax Invoice No.65 dt.16.12.10 with Raw Material analysis Report, Goods Received Report, Purchase Order, Computerised Weigh Bridge Slip,Debit Note, Transporter's Consignment Receipt, xv) Tax Invoice No.67 dt.24.12.10 with Purchase Order Raw Material Analysis Report, Goods Received Report Computerised Weigh Bridge Slip, Debit Note, Transporter's Consignment Receipt, Delivery Challan, 8. D.R.Trading Tax Invoice No.s 156, duly receipted alongwith, Weigh Bridge Slip, Transporter's Consignment Receipt corresponding delivery challans, Goods Received Report, Purchase Order Tax Invoice No.s 155, duly receipted alongwith, Weigh Bridge Slip, corresponding delivery challan, Goods Received Report, Transporter's Consignment Receipt Order, Purchase Order Tax Invoice No.s 158, duly receipted alongwith, Weigh Bridge Slip, Transporter's Consignment Receipt corresponding delivery challan, Goods Received Report, Purchase Order Tax Invoice No.s 154, duly receipted alongwith, corresponding delivery challan, Goods Received Report, T....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Direct confirmation u/s 133(6) vide letter dt. 25.03.14, Request letter for confirmation, Confirmation from party, VAT reports duly reflecting the appellant's transaction, Details of purchases and sales (for trading purposes) Invoices with delivery challan on instances basis 219-231 13. Party - Veritas India Ltd.- Direct confirmation u/s 133(6) vide letter dt. 25.03.14 Request letter for confirmation, Confirmation from party, VAT reports duly reflecting the appellant's transaction, Details of purchases and sales (for trading purposes), Invoices with delivery challan on instances basis 232-248 14. Sanman Trade Impex Pvt. Ltd. Direct confirmation u/s 133(6) vide letter dt. 25.03.14, Request letter for confirmation, Confirmation from party, VAT reports duly reflecting the appellant's transaction, Details of purchases and sales (for trading purposes), Invoices with delivery challan 248-273 15 Party-Jay industries Ledger a/c in co, copy of duly confirmed a/c, copy of PAN, Copy of Two-year ITR with Audited Balance sheet, Bank a/c of Appellant details of total p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s (as listed here in above) and from the paper book containing 584 pages submitted to us, it is clear that the assessee has discharged the onus of providing all the documentary evidences from its end. We notice that the AO in the report has recorded certain discrepancies with regard to the documents directly submitted by the parties and that no adverse findings are recorded with respect to documents submitted by the assessee. Therefore in our considered view, the assessee has discharged the onus and that the purchases cannot be held to non-genuine merely for the reason that some of the details furnished by the parties have some discrepancies which is beyond assessee's control. With respect to parties who have not responded, the CIT(A) has given a finding that the purchases are funded by bank after proper due diligence. In any case the assessee has furnished all the relevant documents such as invoices, GRN, transport bills, computerised weighing bridge slip etc. It is a settled position that mere non-response to notice under section 133(6) cannot be a reason for treating the transaction as bonus, when the assessee has otherwise discharged the onus. 19. In the written submissi....