TaxTMI 
TaxTMI 
2025 (8) TMI 1108
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....s from non-genuine parties particularly when, the Assessing Officer has not made any independent enquiry about such parties, who have been assessed to tax and have VAT and CST numbers, therefore, the said order is bad-in-law, illegal and ab-initio-void. 2. On the facts and in the circumstance of the case, the said order is also bad-in- law, illegal and ab-initio-void, particularly, no copy of the statement recorded by Sale Tax Department of alleged non-genuine parties was provided by the Assessing Officer to the appellant for cross verification. 3. On the facts and in the circumstance of the case, the said learned Commissioner of Income tax has also erred in confirming the order of the Assessing Officer in respect of rejecting the books of account and making addition @ 12.5% profit on the said non-genuine purchases without giving any independent findings that income chargeable to tax has escaped the assessment. 4. On the facts and in the circumstances of the case, the said learned Commissioner of Income Tax has also erred in not considering the various judgements and decisions submitted with the grounds of appeal and at the time of hearing and hence also ....
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.... raised by the alleged seller parties, sale invoice raised by the assessee to the customer in selling of the subject items purchased from such bogus parties, letter of rejection of such goods by the customer, copy of challan through which the matter was returned by the customer to the assessee, credit note issued by the customer to the assessee, debit note issued by the assessee to the alleged bogus concern etc. The details of purchase return for entire purchases of Rs. 32,45,972/- furnished before us, as stated that the same have been furnished before Ld.CIT(A) also, the same are extracted here under, for the sake of clarity about the trail of transactions in question: M/s. Milan Electric Corporation Vs Income Tax Officer (19(2)(3) ITA No. 857/Mum/2025 Assessment Year 2011/2012 INDEX Sr. No. Particulars Purchase Amount Page Nos. 1 Purchase from Jay Enterprises 6,82,909 1 to 7 a. Purchase invoice dated 19/10/2010 alongwith delivery challan b. Corresponding sale invoice dated 26/10/2010 to Aanjaneya Life Care Ltd., c. Goods Return letter of Aanjaneya Life Care Ltd. Dated 06/04/2011. Alongwith freight charges receipts paid b....
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....f Blue Star dated 30.05.2011 alongwith freight charges receipt d. Credit note of the appellant to Blue Star dated 30.05.2011 e. Debit note of the appellant to Nirmal Trading Co. dated 30.05.2011 7. It was the submission by the ld. AR, that the aforesaid information was duly furnished before the ld. CIT(A) which is categorically noted by the ld. CIT(A) that "appellants only submission was that he has returned the goods to the respective concerns and amended his VAT return and same was accepted by the VAT department. Thus, submission of appellant is helpful in addressing the concerns of VAT department. Whereas the appellant continues to claim the said purchase in the Income Tax Return and profit was offered accordingly". In view of aforesaid fact, it was the submission that the genuineness of transactions with the parties termed as involved in bogus transactions based on information received from Sales Tax Department were doubted by the revenue, whereas the assessing officer has not made any independent enquiry from such parties, who have been assessed to tax and have VAT & GST Nos., therefore, the impugned order passed by ld. AO is bad in law, illegal and void ab init....
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....i.e., the alleged bogus parties. The ld. AR demonstrated the entire trail of such transactions with the copies of supporting documents, viz. purchase bills from the alleged seller parties, sale bill by the assessee, communication of rejection by the customer, challan showing transportation of goods, credit note issued to customers and debit note issued to the alleged non-genuine parties. All these documents are recorded in the books of assessee, which were prepared/ executed during the relevant financial year (FY 2010-11) and the following financial year (FY2011-12), thus, the impugned purchases are returned by the assessee in FY 2011-12, much before start of the reopening of the assessment in March, 2016. Since such documents have involvement of multi layers of parties i.e. the seller, assessee (the purchaser), the customer and also the transporter, however, there was no whisper in the orders of revenue authorities about the enquiries from such parties to check the genuineness of such transaction or other wise to establish that such transactions are bogus. Further, the transaction of purchase returned which would be crucial to decide the tax liability of the assessee, informed by ....