2019 (2) TMI 821 - HC - Income Tax

Reassessment proceedings - Addition of bogus purchases - ITAT setting aside a reassessment order - Held that - The assessee did not rely merely upon the deposit of the amount but rather movement of the goods, which is borne out by the VAT authorities stamp on transit challan i.e. chungi, at the border. Other evidence such as the stock register, factory certifying the receipt of the goods as and when they were moved into the premises; clearly recorded in the statutory central excise registers RG-1 etc., were sufficient proof to show that the purchases were not bogus. Moreover, the CIT(A) re-apprised all the evidence, unlike the AO, who was largely influenced by the so-called credit entry providers. This Court is of the opinion that having regard to the detailed analysis of the CIT(A), with which the ITAT s finding concurred, no question of law arises

Summary

Issues:
1. Validity of reassessment order based on alleged bogus purchases for Assessment Year 2008-09.

Analysis:

Issue 1: Validity of reassessment order based on alleged bogus purchases for Assessment Year 2008-09
The Revenue appealed under Section 260A against the ITAT's decision affirming the Appellate Commissioner's ruling to set aside a reassessment order. The dispute revolved around reassessment notices issued to the assessee for the year 2008-09, alleging bogus purchases from M/s. Om Industrial Corporation and M/s. Techno Enterprises. The Revenue contended that these purchases were fictitious based on survey proceedings and statements under Section 133A. The AO disallowed expenditure amounting to ?60,61,4801. The CIT(A) considered various evidence, including VAT deposit forms, transit challans, stock registers, and excise records. The CIT(A) found that the purchases were genuine, citing meticulous documentation and compliance with VAT regulations. The Revenue's appeals for previous assessment years were dismissed by the Court. The Court upheld the lower authorities' decisions, emphasizing the movement of goods, VAT authorities' verification, stock records, and excise registers as proof of genuine purchases. The Court rejected the Revenue's argument that mere deposit of amounts did not confirm actual purchase, highlighting the comprehensive evidence presented by the assessee and the CIT(A)'s thorough analysis. The Court concluded that no substantial question of law arose, dismissing the appeal based on the previous order's findings.

This detailed analysis of the judgment highlights the key legal issues, arguments presented, and the Court's reasoning in upholding the decision regarding the validity of the reassessment order based on alleged bogus purchases for the Assessment Year 2008-09.