2015 (10) TMI 2872

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....of the Act on 22.03.2013, determining the income of the assessee at Rs.2,23,99,680/-. Assessee, an individual, proprietor of Ruchi Exports and engaged in the business of trading of gold and silver jewellery, filed his return of income on 08.09.2009, declaring total income of Rs. 5.30 lakhs. The AO completed the assessment u/s.143(3)r.w.s.147 of the Act on 22.03.2013, determining the income of the assessee at Rs.2,23,99,680/-. 3.Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appellate Authority(FAA).Before him it was contented that the AO had informed him that SE was declared Havala Dealer by the Sales tax department for its failure to clear VAT liabilities under the MVAT Act,2002,that he received a noti....

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....submissions of the assessee, the assessment order the remand report and the rejoinder to the remand report, he held that the assessee filed the copy of tax invoice prepared under MVAT Act with full details and signature, that when sale was made by the person registered under MVAT Act he was duty bound to issue his tax invoice with date, name and address of purchase party, particulars of goods, calculation of MAVT with rate as applicable, that the three invoices of SE reflected necessary details, that they were duly signed, that the assessee had filed quantity details, that the invoices did not suffer from any defect, that purchases were made through account payee cheques, that same were duly reflected in the bank statement of the assessee, ....

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....SE was declared defaulter by the Sales tax department. We hold that default by a person under MVAT Act cannot be a base for making addition under Income tax Act in case of another person until and unless documentary evidence is not brought on record in the income tax proceedings proving the transaction was non-geninue.SE did not deposit tax in the treasury of State Government and later on the assessee had paid the required sum, as he had taken credit under MVAT Act. Section 69C of the Act is an independent section and can be invoked if certain conditions are fulfilled. The AO had ignored the documentary and corroborative evidences produced by the assessee in form of bank statements, declaration made under MVAT Act, TIN No., stock registerin....