ASHOK B. GUTA (HUF),MUMBAI vs. ASST CIT 19(2), MUMBAI

Captioned appeal has been filed by the assessee challenging the order dated 16th February 2015, passed by the learned Commissioner of Income Tax (Appeals)–34, Mumbai, pertaining to the assessment year 2010–11.

2 Shri Ashok B. Gupta (HUF)

3 Shri Ashok B. Gupta (HUF)

Further, he also wanted to verify the purchase and sales made by the assessee. As observed by the Assessing Officer, in response to the notices issued under section 133(6) of the Act, in many cases reply was not received. In some cases though reply was received but they were not complete. Thus, on the basis of such information, the Assessing Officer called upon the assessee to explain as to why the loan transactions and purchase and sale transactions should not be treated as bogus. Though, the assessee submitted its reply claiming that the transactions were genuine, however, the Assessing Officer was not convinced with the explanation of the assessee. On the basis of facts relating to past years, he observed that from the assessment year 2009–10 onwards every year sundry creditors were increasing. Further, he observed, though the assessee has shown closing stock of more than ` 1 crore, however, at the time of physical verification no stock was found. The assessee also failed to furnish the details called for. Thus, alleging that the assessee failed to prove the loans and advances as well as purchase and sale, the Assessing Officer made addition of an amount of ` 9,65,21,041 under section 68 of the Act. The addition made by the Assessing Officer was partly sustained by the learned Commissioner (Appeals) while deciding assessee’s appeal.

learned Commissioner (Appeals) were not considered properly. He submitted that the assessee was also not provided adequate opportunity to reconcile the difference, if any, and to remove the doubts entertained by the Departmental Authorities. Further, he submitted, while deciding identical issue in assessee’s own case for the assessment year 2009–10, vide ITA no.699/Mum./2014, dated 16th August 2016, the Tribunal has restored the issue to the Assessing Officer for fresh adjudication. Thus, he submitted, the issue may be restored back to the Assessing Officer with similar direction.

5 Shri Ashok B. Gupta (HUF) tabulated in the assessment order, most of the notices issued under section 133(6) of the Act were served on the person concerned and, in many cases, replies to the notices under section 133(6) of the Act were also received. Thus, from the aforesaid facts, it appears that the persons with whom the assessee had entered into transactions are identifiable. Therefore, the only thing which remains to be established is the genuineness of the transactions along with the creditworthiness. It is the contention of the learned Authorised Representative before us that the assessee had, to the extent possible, tried to reconcile the differences / discrepancies found during the survey. He has also submitted that if proper opportunity is given, the assessee would furnish necessary evidences to prove the genuineness of transactions. Considering the above, we are inclined to restore the issue to the Assessing Officer for fresh adjudication after due opportunity of being heard to the assessee. The assessee on its part should furnish all necessary evidences to establish the genuineness of the loan transactions as well as purchase and sale transactions. The Assessing Officer must consider the evidences furnished by the assessee and if he has any doubt regarding them, he must bring it to the notice of the assessee for proper reconciliation. With the aforesaid observations, we restore the issue to the Assessing Officer.

6 Shri Ashok B. Gupta (HUF)