9911796707
TMI Blog2024 (9) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... o be bogus. Assessee filed a detailed reply pointing out that they had communicated with the Director of M/s. HJM Fuels Pvt. Ltd. for appearing before the AO who had submitted his inability to do so because of his health condition, but at the same time had stated that all necessary documents evidencing the genuineness of the transactions had been filed by him along with his affidavit in this regard in response to summons issued to him by the AO u/s 132(1) - these facts have also remained uncontroverted by the AO and in fact he has admitted to the Director of M/s. HJM Fuels Pvt. Ltd. having filed an affidavit admitting to having undertaken transactions of sales to the tune of Rs. 2.47 crores with the assessee. Thus the assessee had established with evidence the factum of having made purchases from M/s. HJM Fuels Pvt. Ltd. having furnished copies of bills of purchases and the mode of purchases made, Copy of VAT returns reflecting the said sales to the assessee and the copy of the Form No.26AS reflecting the said purchases on which the TCS was collected and the credits of the same were claimed by the assessee was filed. The assessee had also submitted the quantitative tally of the pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held an addition of INR 25,91,606/- equating to 10% of alleged bogus purchases amounting to INR 2,47,76,349/- notwithstanding the formal acceptance of the Assessee's books of accounts under Section 145(3) of the Income Tax Act, 1961. Confirmation of Addition in Absence of Contradictory Evidence: The decision of the CIT(A) to confirm the addition of INR 25,91,606/- is contended to be baseless, as it lacks substantiation through adverse documentary evidence against the Assessee. Disregard for Documentary Evidence and Vendor Confirmation: The CIT(A) is alleged to have overlooked the documentary evidence provided by the Assessee and the confirmation of transaction details by the seller party, M/s, HJM Fuels Pvt Ltd, presented during the proceedings before the AO. Unjustified Double Taxation through Gross Profit-Based Addition: The addition of Gross Profit at 10% on the purchase transactions by the CIT(A) has led to an inadvertent double taxation of the same income, as the income from subsequent sales has already been offered for taxation. Reservation of Rights: The Appellant reserves the right to add, alter, amend, or modify any of the grounds of appeal during the course of the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile were noted by the Revenue to be of cash entries for receipt of money and payment thereof; and the Group run by one Shri Mahendra S. Patel was noted to have made application before the Settlement Commission, Additional Bench-II, Mumbai, wherein the entries appearing in Training Module had been owned up by the Group and a disclosure of 2% additional income had also been made by the Group. The assessee was also noted to have carried out transactions with M/s. HJM Fuels Pvt. Ltd. during the year. Based on this incriminating material, the assessee was asked to demonstrate the genuineness of transactions carried out by it with M/s. HJM Fuels Pvt. Ltd., to which due reply was filed by the assessee submitting that all the transactions were genuine. Necessary evidences to this effect were also filed. The assessee had also submitted that the incriminating material in the possession of the Department lack credibility, and it was also submitted by the assessee that the Director of M/s. HJM Fuels Pvt. Ltd. had confirmed the transactions with the assessee to the Assessing Officer in response to summons issued to it by the Assessing Officer during the present proceedings carried out on the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g material so seized, was found the ledger account of the assessee. In response to the incriminating material so seized, submission had been made by HJM Fuels Pvt Ltd. before DDIT (Inv.), Unit 1(3), Ahmedabad that all the entries appearing in the seized material are the cash entries for receipt of money and payment the of Your goodself has asked us to explain as to why the appropriate addition/ disallowance should not be made in the hands of the assessee in respect of the transactions carried out with the alleged bogus concern ie HJM Fuels Pvt Ltd. We are therefore furnishing our reply in the aforesaid matter with the requisite details for your kind verification and perusal. 1) The assessee is carrying out the business activity of trading in Steam Coal from the premises situated at T. Hiranand Estate. Nr Fruit Market, Naroda Road, Ahmedabad- 380025. As a part of its normal business activity, the assessee had purchased Steam Coal from M/s HJM Fuels Pvt Ltd during the FY 2016-17 for subsequent sales of the same to the various parties. We have already submitted the ledger account of HJM Fuels Pvt Ltd, copies of the all the purchase bills alongwith the details of the modes of goods del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.Y 2017-18, M/s HJM Fuels Pvt Ltd had collected TCS on sales of coal to the assessee as per the provisions of the Income Tax Act. The assessee had duly availed the TCS credit of the same, while filing the Income Tax Return and the said transactions are also being duly reflected in the 26AS Tax Credit Statement of the assessee. It is hereby informed that all the transactions of purchase of goods by the assessee from HJM fuels Pvt Ltd during the A.Y 2017-18 are being duly reflected in the 26AS statement and there is no discrepancy as regards the amount of purchases as well as the TCS collected on the same. The transactions as reflected in the 26AS statement duly gets tallied with the details of all the purchase transactions as reflected in the ledger account of HJM Fuels Pvt Ltd which has already been submitted before your goodself. We are hereby attaching a copy of the 26AS Tax Credit statement of the assessee for A.Y 2017-18 duly highlighting the details of the purchase transactions from HJM Fuels Pvt Ltd (Ref: Page 43 of Form 26AS) undertaken during the relevant assessment year and the TCS credit availed on the same for your reference. (Annexure-C). 4) As regards the sales of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted copy of bills/invoices, Delivery challans, ledger accounts and bank statements to discharge its onus to prove that the transactions made with M/s. HJM Fuels Pvt Ltd are completely genuine. Another fact to note in the matter is that Shri Shailesh Waghela- the director of M/s. HJM Fuels has filed an affidavit in this office wherein he has submitted a ledger account of the assessee company in its books showing transaction to the tune of Rs. 2.47 Cr on sale of Steam Coal having quantity 7499.71 metric tonne. Further it has also been admitted that the sales made to M/s. Vimal Coal Pvt Ltd are as per regular books of account and all such transactions are duly accounted in its books of account and have also been considered while filing Income Tax Return for AY 2017-18. 10. It is evident from the above that the assessee had sufficiently discharged its onus of proving the genuineness of purchase of coal made by it from M/s. HJM Fuels Pvt. Ltd. with facts and evidences which were remained uncontroverted by the Assessing Officer. The ld. CIT(A), we have noted, has simply relied on the findings of the Assessing Officer. Considering the same , we hold, there is no case /basis with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee that there was no concrete evidence ,i.e by way of cash receipt bearing the signature of the authorized person of the assessee or any other documentary evidence to substantiate that the cash had actually been received by the assessee or any other circumstantial evidences to prove that the cash had actually been paid to the assessee. It was, therefore contended that the contents of the so called incriminating material in the possession of the Department lack credibility and evidentiary value and could not be relied upon to arrive at any conclusion whatsoever for the case of the assessee. These facts find mention at paragraph No.5 of the submissions made by the assessee to the Assessing Officer as under:- 5) Your goodself has mentioned in the notice that certain incriminating material has been seized from the premises of HJM fuels Pvt Ltd and the incriminating material also contains the ledger account of the assessee. You have provided us the details of our ledger account from the incriminating material and the reply given by HJM Fuels Pvt Ltd as regards the seized material in response to the summons issued to it pursuant to the survey proceedings undertaken in its case. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The incriminating material therefore cannot be relied upon in respect of the fact that the cash receipts claimed, are actually receipts by RTGS/ Cheques. Another important point which requires due consideration is that entries are passed for receipts as Journal Entries instead of passing the same under the head Receipts . It must be noted that as per the standard accounting principles, amounts received are to be recorded under the Voucher Type Receipts . c) It is hereby informed, that the entries mentioned on the credit side in the Incriminating Material have already been recorded as receipts in the bank account by HJM Fuels Pvt Ltd as per the contra confirmation ledger account submitted before your goodself. It must therefore be noted that there cannot be dual nature of receipts for a particular transaction. The incriminating material can therefore not be relied upon as the said receipts are claimed as cash receipts which are in fact the receipts in the bank account of HJM Fuels Pvt Ltd. The same can also be verified from the bank statements of the assessee reflecting the payments made to HJM Fuels Pvt Ltd which has been submitted before your goodself. d) As stated above, the ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transactions undertaken from 1st April, 2016 to 31st March, 2017. The transactions claimed as cash receipts in the incriminating material ie the ledger account of the assessee, are actually receipts by Cheques/RTGS. Moreover, not all the transactions for payments made by the assessee upto 14.09.2016 are being found in the incriminating material. The payments made as per the incriminating material and which are claimed to be cash payments to the assessee are not backed by any concrete documentary evidence to establish the fact that cash has been actually paid to the assessee. It is quite clear that the ledger account as per the incriminating material seized, appears to be a fabricated account, wherein there appears an intention of the author of the incriminating material to make adjustments of his unaccounted cash, wherein in order to justify the unaccounted cash payments made to some unknown sources, certain payments made by the assessee out of the entire payments made upto 14.09.2016 are being fetched and passed as journal entries claiming the same to be cash receipts which are actually receipts by the mode of RTGS/Cheques and are actually the payments made by the assessee tow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en revealed from the submissions made by the assessee before him during the assessment proceedings; but thereafter he still goes on to state that the seized material cannot be discarded totally. These findings of the Assessing Officer are at paragraph No.2.5 of his order as under:- 2.5 In this case the information made available to this office contains incriminating document in the form of Training Module which has entries of both cash and non cash transactions and further it is also observed that such ledger account contains both unaccounted and accounted transactions which is evident from the submission made by the assessee company and M/s. HJM Fuels Pvt Ltd as some of the entries appearing in the said impounded ledger account are recorded in books of both the concerns. Further it is also important to note that M/s. HJM Fuels Pvt Ltd made submission before DDIT(Inv.), Unit-1(3), Ahmedabad vide its letter dated 04.05.2017 wherein it stated the entries appearing in the file named Training Module are all cash entries for receipt of money and payment thereof. However all the entries may not be cash entries as things have unfolded during the course of assessment proceedings. The seize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter and the sales made by it during the year substantiated by the Sales Register. Thus, in effect, on merits, the assessee had duly established the genuineness of the transactions of purchases undertaken by it with M/s. HJM Fuels Pvt. Ltd. The Assessing Officer has admitted to the said fact in his order and has been unable to point out any infirmity in the same. (ii) The Director of M/s. HJM Fuels Pvt. Ltd. had submitted by way of affidavit of having entered into the transactions of sale of coal to the assessee, which has also been admitted by the Assessing Officer and no infirmity in the said affidavit pointed out by the Assessing Officer. (iii) The assessee had pointed out discrepancy in the incriminating material found during the survey at M/s. HJM Fuels Pvt. Ltd. which formed the basis with the Department for holding the entire purchase made by the assessee to be bogus and had also pointed out why the said incriminating material could not be treated as credible and sufficient enough to be read adversely against the assessee, to which the Assessing Officer has not countered the same; but has in fact admitted to the lapses/ deficiencies pointed out by the assessee in the said inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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