9911796707
TMI Blog2022 (1) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessment Officer stated 9. During the course of assessment proceedings the assesses was asked to produce the Books of account along with all the bills and vouchers, Ledger copies of Nimbus Industries Ltd. and Highland Industries Ltd., way bills, delivery challans, Contract agreements, details of transport etc. to prove the genuineness of the transactions held among these companies. 10. In response the A.R. of the assessee stated vide its letter submission that all the orders received and placed in respect of sale and purchase transactions are oral. Hence could not produce any documentary evidences for the said orders. 11. The A.R. of the assessee was also requested to produce the ledger extracts of the assessee in the books of MI s Nimbus Industries Ltd. and Highland Industries Ltd. In response, the AR. of the assessee replied that there are no dues to/from the above parties as on 31.03.2011 and also after the F.Y. 2010-11 no transactions were entered with them and so they are not in contact with them hence, expressed his inability to produce the same. 12. Further, the assessee's argument that the assessee has made payment through banks should be considered as gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as called for. It has simply submitted that the company has taken oral orders with his suppliers and the supplier has directly deliver the goods at the customers place is not acceptable since for the oral orders also, there has to be some agreements or any other paper correspondence, for such a big transaction. It is evident from the above status that the assessee who is running the show, which conclusively proved beyond doubt that it has not provided/sold anything In real world. Purchases which are claimed to have been made are nothing but mere accommodation entries. The fact regarding the parties involved are bogus is getting strengthened by the findings of Investigation Wing and bank statements. Assessee has failed to produce the parties without ascribing any reason for its inability to produce their genuineness, creditworthiness and identity. Had these parties were genuine and had conducted real transaction, they would have appeared/produced by assessee in all human probabilities, but assessee choose not to. Further, on verification of bills and vouchers also, there is no complete information. Hence, assessee's claim of their genuineness does not hold ground. Hence, statu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt proceedings, it was submitted that the Appellant purchased 17,134.30 MT of steel (TMT Bars) from Highland Industries Ltd. and sold the said quantity of steel to Nimbus Industries Ltd. on a back-to-back basis. It was explained that both the purchases and corresponding sales were duly reflected in the books of accounts of the Appellant. In fact, the officer himself admitted in para 2 of the order that the Appellant had accounted for purchase of steel from High Land Industries Ltd. worth Rs. 57,39,36,164/- and sale of such steel to Nimbus Industries Ltd. for Rs. 57,80,90,162/-. All the relevant receipts and payments were through banking channels. Copies of the quantitative sales and purchase registers, relevant invoices, ledger accounts of purchases, sales, Highland Industries Ltd., Nimbus Industries Ltd., relevant bank statements and company master data relating to the above companies obtained from the web-site of ROC (to substantiate the fact that both the entities are existing and genuine) were submitted before the ITO, Ward-1(2) Hyderabad during the reassessment proceedings. Copies of the same are submitted as Annexure-4. When asked to furnish the copies of the agreements and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as submitted above, the very fact, that the summons issued to Highland Industries Ltd. were returned with a comment "Left", substantiates the fact that such company actually existed at the address given earlier and it is quite possible that it might have shifted elsewhere subsequently as the transaction is almost 8 year old. In so far as Nimbus Industries Ltd. is concerned, the summons was duly served which clearly proves the existence of such entity and the Appellant cannot be held responsible for non-compliance of such person. He also relied on the decision in the case of Durga Prasad More which is not applicable to the Appellant's case as the facts in that case were distinguishable. It was further observed that the Appellant failed to prove the identity, genuineness and creditworthiness of the concern from whom the purchases were made. He failed to appreciate that such test was applicable in respect of credits but not to the purchases though the initial onus of proving the transactions was on the Appellant. In fact, the Appellant had produced the complete details and primary evidences in support of purchase and sale of the product in question and thereby duly discharged th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the evidence adduced by the assessee. The learned Tribunal has taken note of the judgments on the issue, including an unreported one of High Court of Jharkhand, in Arun Kumar Agarwal (HUF) & Others, dt. 13.7.2012 in Tax Appeal No. 4 of 2011, and also of Madras High Court in the case of C.I.T. v. Gobi Textiles Ltd. [I] wherein it has been stated the legal position as quoted by us above. Here, on fact, the learned Tribunal found the assessee has discharged initial burden lies on it. We, therefore, do not find any element of law to interfere with the impugned judgment and order of the learned Tribunal. The appeal is accordingly dismissed. There will be no order as to costs." A copy of the decision is submitted as Annexure-5. Thus, the summary rejection of the evidences filed by the Appellant, without spelling out the reasons based on cogent material, is legally unsustainable and as such the addition deserves to be deleted. Without prejudice to the above, it is humbly submitted that in the case of trading activities, every purchase made during any year would form part of either sale or dosing stock of that year. It is a settled principle that where sales are not disputed or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declared by the Appellant in its accounts. Thus, disallowance of 25% of the purchases, without giving any basis, was highly arbitrary and irrational. In view of the above submissions, the CIT(A) is prayed to delete the disallowance of Rs. 14,42,34,041/- 7. I have carefully considered the facts of the case, assessment order and the written submissions of the appellant along with case laws. As per the assessment order, there is information from the Wing that the appellant company, M/s. AMR Global Industries Ltd. had received certain amount from M/s. Nimbus Industries and transfer the same to M/s. Highland Industries. It was also found that the appellant has booked purchases of TMT steel bars from M/s. Highland Industries Ltd. and sale of the same to M/s. Nimbus Industries Ltd. and therefore, directed the assessing officer to verify the purchases. Based on the information, the assessing officer reopened the case and completed the assessment by disallowing 25% of purchases since the appellant has not produced any documentary evidence for transactions made between M/s. Highland Industries Ltd. and M/s. Nimbus Industries Ltd. On verification of the details, the appellant already file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as profit and balance deleted". 3. Learned CIT-DR vehemently contended during the course of hearing that the Assessing Officer had clearly indicated specific set of facts that the assessee's alleged supplier M/s. Highland Industries Ltd. was a bogus entity providing mere accommodation entries as per the ADIT (Inv.) New Delhi's report. And that the assessee's purchases @ 25% of the total amount had been rightly disallowed in the course of assessment which deserves to be revived in the instant second appeal proceedings. 4. Learned AR has placed strong reliance on the CIT(A)'s detailed discussion deciding the issue in assessee's favour. 5. We have given our thoughtful consideration to rival pleadings and find no merit in Revenue's stand. There is hardly any dispute that although the learned lower authorities have allowed 75% of the very purchases in the assessment order itself since we are dealing with the remaining estimated disallowance of 25% only, the fact remains that this assessee is a trader in TMT Bars with corresponding sales involving M/s. Nimbus Industries Ltd. qua the very purchase(s) difference. It had the difference amount admitted as business ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
