TaxTMI 
TaxTMI 
2026 (9) TMI 1066
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....ik Consultancey Private Limited. Information was also received by the Ld. Assessing Officer through Insight Portal that M/s Saraff Enterprises was found to be indulging in issuing fake invoice to other entities and had evaded GST thereon. The invoices were issued without actual supply of goods and service implying bogus purchases. On going through the list of the entities making alleged bogus purchases from M/s. Saraff Enterprise, it was found that Marignayani Cosmetics Private Limited during the F.Y. 2017-18 corresponding to A.Y. 2018-19 had made purchases to the tune of Rs. 25,51,275/- from Saraff Enterprise. 3. Notice u/s 148A(b) of the Act was issued to the assessee to explain the transactions with M/s. Barbarik Consultancy Private Limited and M/s. Saraff Enterprises during the year. Subsequently, order u/s 148A(d) of the Act was passed and notice u/s 148 of the Act was issued to the assessee dated 12.04.2022. In response, the assessee filed the return of income u/s 148 of the Act on 29-04-2022. However, the return of income filed by the assessee was not acknowledged in the assessment order, for reasons best known to the learned AO. Subsequently, noti....
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....peal filed against assessment order u/s 147 r.w.s. 144B of the Act dated 18/03/2024 is arbitrary, erroneous, opposed to law and contrary to the facts of the case. 2a). That the Ld. CIT(A) erred in law and on facts in confirming the addition of Rs. 13,44,000/- u/s 69C of the Act by treating genuine business expenditure for labour and manpower services paid to M/s Barbarik Consultancy Pvt. Ltd. as unexplained, completely ignoring that the appellant had fully discharged its onus of proof by providing adequate documentary evidence including TDS details, reflection of transaction in the appellant's bank account, audited books, GSTR-2A entries confirming that the service provider uploaded the corresponding GST invoices and filed their returns. 2b). That the Ld. CIT(A) also erred in confirming the addition of Rs. 13,44,000/- u/s 69C of the Act merely because third-party notice u/s 133(6) remained uncomplied with by the vendor and also by completely ignoring that the appellant cannot be penalized for the non-cooperation of a third party when the transaction proof is available on record and hence reliance upon the judgment of CIT vs. Precision Finance P. Ltd. (208 ITR ....
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....s available on record, Assessee cannot be penalized. Thus, sought for deletion of the addition. 6. Per contra, the Ld. DR contended that the notices issued u/s 133(6) of the Act has not been complied by the vendor, the Assessee has not proved genuineness of the business expenditure, therefore, the addition has been rightly made by the Assessing Officer which has been confirmed by the Ld. CIT(A), thus the same requires no interference at the hands of the Tribunal. Therefore, sought for dismissal of the Ground No.2(a) & 2(b) of the Assessee. 7. We have heard the parties and perused the material available on record. During the assessment proceedings, the Assessing Officer found that M/s Barbarik Consultancy Private Limited had indulged in issuing fake invoices to other entities, evading GST. Further observed that the share capital of M/s Barbarik Consultancy Private Limited was merely Rs. 1 Lakh and they had paid nominal taxes. Considering the financial analysis for A.Y. 2016-17 to 2018-19 of M/s Barbarik Consultancy Private Limited and also considering the fact that the said company was struck off as on the date of the analysis and the Assessing Officer found that Assessee had ....
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.... admitted fact that the said company itself has been struck off, therefore, for the very same reason, the notice issued u/s 133(6) of the Act could not have been replied by M/s Barbaric Consultancy Private Limited. Be that as may, non-compliance of the notice by the third party cannot be a ground to treat the transaction as non-genuine. The Assessing Officer committed error in rejecting the evidences submitted by the Assessee without even making further enquiry. The Hon'ble Apex Court in the case of CIT Vs. Orissa Corporation Private Limited (1986) 159 ITR 0078 held as under:- "The assessee had given the names and address of the alleged creditors. It was in the knowledge of the Revenue that the said creditors were income-tax assessee's. Their index number was in the file of the Revenue. The Revenue, apart from issuing notice u/s 131 at the instance of the assessee, did not pursue the matter further. The Revenue did not examine the source of the income of the said alleged creditors to find out whether they were credit-worthy or were such who could advance the allowed loans. There was no effort made to pursue the so-called alleged creditors. In those circumstances, the asses....
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....said entity is a bogus shell entity. It is further found by the Assessing Officer that the Assessee company made purchases in the year under consideration to the tune of Rs. 25,51,275/-. 13. During the assessment proceedings, the Assessing Officer called the Assessee to explain the genuineness of the said transactions. In reply, Assessee stated that Assessee had purchased goods from M/s Saraff Enterprises amounting to Rs. 25,51,275/- during the year under consideration, however, the goods were returned back to the said party in the immediately succeeding year and therefore no payment was required to be made to the said party. It was the case of the Assessee that Assessee has not claimed any deduction on account of the said purchases made from the said party as goods were returned back in the succeeding year. To substantiate the said contention, Assessee also produced the ledger of the party at Page No.4 & 5 of the Paper Book. Further, the Assessee claimed that purchases made from the said party remained unsold during the year and therefore the same were obviously forms part of the closing stock for the year of the current year which was duly credited to the Profit and Loss Accou....