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TMI Blog2019 (1) TMI 1360X X X X Extracts X X X X X X X X Extracts X X X X ..... enuine expenditure. Merely because M/s. S N Enterprises made cash payments for purchase of buffalos, would not destroy genuineness of the expenditure made by the assessee. There had to be some additional material which would establish the live-link for the formation of belief by the Assessing Officer that, income chargeable to tax has escaped assessment. AO in the present case, neither had time to carry out any follow up enquiries nor had he, in fact, carried out any such enquiry. As per the reasons, the information received from the Investigation Wing, was placed before him at 6.30 p.m. on 31st March, 2017, which was the last date for issuing notice of reopening of an assessment. He, therefore, apparently, acted under great constra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A to the Petition. 2. This challenge arises in the following background: (a) Petitioner is a company, registered under the Companies Act and is engaged in the business of manufacturing and processing of frozen boneless buffalo meat and other similar products. For the purpose of such business, the Assessee procures raw meat from various suppliers one of them is M/s. S.N. Enterprise; (b) For the Assessment Year 2010-11, Petitioner had filed a return of income on 28th September, 2010, declaring total income of ₹ 138.70 Crores. Such return was taken in scrutiny by Assessing Officer. After detailed scrutiny, he passed an order of assessment under Section 143(3) of the Income Tax Act, 1961 (for short the Act ). On 5th March, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the fact that M/s. S N Enterprise could not produce the farmers from which buffaloes were purchased, an inference is drawn that the purchases of M/s. Frigerio Conservra Allana Ltd. are inflated. This inference is drawn as the ultimate purchaser is M/s. Frigerio Conservra Allana Ltd. Therefore, there is under assessment of income on account of inflated purchases. The assessment for A.Y 2010-11 was completed u/s. 143(3) on 5.3.2013 determining total income at ₹ 138,70,88,898/. The issue of genuineness of purchase of buffaloes from M/s S N Enterprises was not examined by the Assessing Officer during the course of assessment proceedings. Nor has the assessee furnished any material facts in this regard. Therefore no opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minutely examined during original scrutiny assessment; (iii) He pointed out that the expenditure of purchase of raw material from M/s. S.N. Enterprises which the Assessing Officer doubts, was subject matter of examination in case of said M/s. S. N. Enterprises. The Assessing Officer passed order of assessment on 23rd December, 2017 under Sections 143 (3) read with 147 of the Act, in which, such payments made by the Petitioner-Assessee were accepted. 4. On the other hand, learned Counsel for the Revenue opposed the Petition contending that, there was failure on the part of the assessee to disclose truly and fully all materials facts. The Assessing Officer had received information from the Investigation Wing. Being prima facie, sat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer had received information from Addl. Director of Income Tax (Inv.) after the Assessment was framed that, ₹ 90 lacs paid to M/s. S N Enterprises through bank transfers and that,M/s. S N Enterprises in turn, withdraw a sizeable amount from said payments in order to make cash payments to farmers owners of buffalo. This information by itself, cannot ultimately lead to the inference that, said payment was for non-genuine expenditure. Merely because M/s. S N Enterprises made cash payments for purchase of buffalos, would not destroy genuineness of the expenditure made by the assessee. There had to be some additional material which would establish the live-link for the formation of belief by the Assessing Officer that, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter dated 7th January, 2013, supplied the following information: A brief note on the nature of business activities of the company along with a detailed note on manufacturing process (Annexure1). Party-wise details of suppliers of goods (Annexure14). 10. The said reply contained ledger details of purchase made by the Assessee from various suppliers, which include the following information: S. N. Enterprises H.N.162, Mohalla Uncha Tarinan, Khurja, Bulandsahar, Uttar Pradesh 80,53,27,277 Once again, on 28th February, 2013, assessee wrote a letter to the Assessing Officer, which reads as under: In the course of hearings, your goodself have pointed out that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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