ITO 27(3)(5), NAVI MUMBAI vs. YOGI DYE CHEM INDUSTRIES, MUMBAI

Assessee by: Shri Devendra Jain Department by: Shri V. Justin (DR) Date of Hearing: 17.07.2018 Date of Pronouncement: 29.08.2018 O R D E R

PER AMARJIT SINGH, JM:

“]) On the fads and the circumstances of the case the Ld CIT(A) erred in directing to delete the addition of Rs,2,97,42,9] 61- u/s.69 C on account of purchases made from M/s Miller Chemicals Pvt Ltd by holding that the AO had made the addition merely on the basis of information received from Sales Tax Authorities without making any enquiry and having supporting evidences to substantiate that the transaction was not genuine. 2) On the facts and circumstances of the case the Ld. CIT(A) erred in directing to delete the addition of Rs.2,97,42,9l6/-u/s 69C on account of M/s Miller Chemicals Pvt Ltd without appreciating the fact that i) Letter issued u/s 133(6} at the address mentioned in the sales bills provided by the assessee in respect of purchases made in the Previous Year 2008-09 relevant to A.Y 2009-10 was returned un served, ii) Spot enquiries conducted at address provided in the website of the sale tax department revealed that the aforesaid concern was non- existent, iii No evidence to substantiate the transportation of goods even in respect of purchases of Rs, 19,35,8111- from M/s Miller Chemicals Pvt Ltd as appearing in the beaks of accounts were furnished iv] The assessee had failed to produce any of the directors for examination and the Safes Tax Authorities had registered a case in respect of providing accommodation entries to the Assistant Commissioner of Police, Economic Offence Wing Mumbai. 3) The appellant prays that the order of the Ld. CIT[A) on the above grounds be reversed and that of the assessing officer be restored. 4] The appellant craves leaves to amend or alert any grounds or add a new ground which may be necessary.” to 1230M/16 A.Y. 2009-10, 2010-11&2011-12

“7, I have carefully considered the submissions of the appellant. The only basis for the addition of the amount of Rs. 2,97,42.916/- was the information received by the Assessing Officer from the Sales tax department through the D.C.LT(Inv.) Mumbai. The appellant informed the Assessing Officer that he had purchased only for an amount of Rs, 19,35,812/- from the party. The Assessing Officer's effort to obtain more clarification from the Sales tax department was in vain. The only detail which the Assessing Officer obtained from the Sales tax department, as per the assessment order, was that there was a statement of main operator of M/s, Miller Chemical P.Ltd., wherein, he talks of issuing bills to various parties and the copy of the annexure J-Il of audit form 704 of the appellant, wherein, the amount of Rs. 19,35,812/- is mentioned. The Assessing Officer later on tried to contact M/s. Miller Chemical P,Ltd,, but, there was no response. As pointed out by the appellant, the Assessing Officer had not verified, whether the appellant had actually purchased the goods for the full amount of Rs. 2,37,42,916/- and have the to 1230M/16 A.Y. 2009-10, 2010-11&2011-12 payments were effected, whether the goods have been received, whether appellant had maintained stock record in the books of accounts and how these goods were disposed off. In the absence of any meaningful verification, books cannot be rejected casually. It is also not seen whether the Assessing Officer tried to co-relate the books maintained by the appellant with the business which it was carrying on, Therefore, the inevitable conclusion is that the addition has been made based only on the information received from the Sales tax department. There is no other supporting evidence. As there is no other basis, it is difficult to approve the rejection of the books of the appellant, and therefore, the addition made by the Assessing Officer of Rs. 2,97,42,9167- is deleted.”

9. The brief facts of the case are that the case of the assessee was reopened on 28.03.2013 by issuing of notice u/s 148 of the I.T. Act on the basis of information received by the DGIT(Inv.) Mumbai to the fact that the assessee was one of the beneficiaries of bogus purchase amounting to Rs.85,43,645/- from M/s.Miller Chemical Pvt. Ltd. The assessee in pursuance of the said notice, filed return of income on 30.09.2010 declaring total income to the tune of Rs.80,178/-. The reason recorded prior to issue of notice u/s 148 of the Act was given to the assessee on 28.03.2013. Thereafter the statutory notice u/s 143(2) and 142(1) of the Act were issued and served upon the assessee. Notice u/s 133(6) of the Act was given to M/s. Miller Chemical Pvt. Ltd. but no response was received. The assessee also failed to produce the party, therefore, an amount of Rs.85,43,645/- was added to the income of the assessee. Feeling aggrieved, the to 1230M/16 A.Y. 2009-10, 2010-11&2011-12 assessee filed an appeal before the CIT(A) who deleted the said addition, therefore, the revenue has filed the present appeal before us.

7, I have carefully considered the submissions of the appellant. The only basis for the addition of the amount of Rs. 85,43,645/- was the information received by the Assessing Officer from the Sales tax department through the D.C.LT(Inv.) Mumbai. The appellant informed the Assessing Officer that he had purchased anything from the party from the party. The Assessing Officer's effort to obtain more clarification from the Sales tax department was in vain. The only detail which the Assessing Officer obtained from the Sales tax department, as per the assessment order, was that there was a statement of main operator of M/s, Miller Chemical P. Ltd., wherein, he talks of issuing bills to various parties and the copy of the annexure J-Il of audit form 704 of the appellant, The Assessing Officer later on tried to contact M/s. Miller Chemical P, Ltd, but, there was no response. As pointed out by the appellant, the Assessing Officer had not verified, and have the payments were effected, whether the goods have been received, whether appellant had maintained stock record in the books of accounts and how these goods were disposed off. In the absence of any meaningful verification, books cannot be rejected casually. It is also not seen whether the Assessing Officer tried to co-relate the books maintained by the appellant with the business which it was carrying on, Therefore, the inevitable conclusion is that the addition has been made based only on the information received from the Sales tax department. There is no other supporting evidence. As there is no other basis, it is difficult to approve the rejection of the books of the appellant, and therefore, the addition made by the Assessing Officer of Rs.85,43,645/- is deleted.

to 1230M/16 A.Y. 2009-10, 2010-11&2011-12 Ltd. On appraisal of the order of the Assessing Officer dated 11.03.2014, we noticed that the Annexure J-II of the Audit form 704 of Yogi Dye Chem Industries shown the purchase to the tune of Rs.Nil for the A.Y.2010-11. The information was contrary to the said record. No bill invoices etc., are on record. The Assessing Officer raised the addition on account of non-serving of notice u/s 133(6) of the I.T. Act, 1961 and non-producing the concerned person before him. Anyhow, there is nothing on record to which it can be assumed that the assessee purchased the material from M/s.Miller Chemical Pvt. Ltd. to the tune of Rs.85,43,645/-. Since there is nothing on record to which it can be assumed that the assessee purchased the material from M/s.Miller Chemical Pvt. Ltd. therefore, we are of the view that the oral statement of the incharge of M/s.Miller Chemical Pvt. Ltd. is not sufficient to raise the addition. There is no corroboration of the statement of incharge of M/s.Miller Chemical Pvt. Ltd. Accordingly, the CIT(A) has passed the order judiciously and correctly which is not liable to be interfere with at this appellate stage. Accordingly, these issues are decided in favour of the revenue against the assessee. In result the appeal of the revenue is hereby ordered to be Dismissed. ITA NO.1230/M/2016:- to 1230M/16 A.Y. 2009-10, 2010-11&2011-12

1] On the facts and the circumstances of the case the Lei CIT[A] erred in directing to delete the addition of Rs. 19S85735/- u/s,69 C on account of purchases made from M/s Miller Chemicals Pvl Ltd by holding that the AO had made the addition merely on the basis of information received from Safes Tax Authorities without making any enquiry and having supporting evidences to substantiate that the transaction was not genuine. 2 On the fads and circumstances of the case the Ld. CIT(A) erred in directing to delete the addition of Rs.19885735/-u/s 69C on account of M/s Miller Chemicals Pvt Lid without appreciating the fact that i) Letter issued u/s 133(6) at the address mentioned in the sales bills provided by the assesses in respect of purchases made in fhe Previous Year 2008-09 relevant fo A,Y 2009-10 was returned un served, ii] Spot enquiries conducted al address provided in the website of the soletax department revealed that the aforesaid concern was non-existent iii) The assessee had faifed to produce any of the directors for examination and the Soles Tax Authorities had registered a case in respect of providing accommodation entries to the Assistant Commissioner of Police, Economic Offence Wing Mumbai. 3 The appellant prays that the order of the Ld, CIT(A) on the above grounds be reversed and that of the assessing officer be restored. 4) The appellant craves leaves to amend or alert any grounds or add a new ground which may be necessary.

14. The brief facts of the case are that the case of the assessee was reopened on 28.03.2013 by issuing of notice u/s 148 of the I.T. Act on to 1230M/16 A.Y. 2009-10, 2010-11&2011-12 the basis of information received by the DGIT(Inv.) Mumbai to the fact that the assessee was one of the beneficiaries of bogus purchase amounting to Rs.1,98,85,735/- from M/s.Miller Chemical Pvt. Ltd. The assessee in pursuance of the said notice filed return of income on 30.09.2010 declaring total income to the tune of Rs.1,06,116/-. The reason recorded prior to issue of notice u/s 148 of the Act was given to the assessee on 28.03.2013. Thereafter the statutory notice u/s 143(2) and 142(1) of the Act were issued and served upon the assessee. Notice u/s 133(6) of the Act was given to M/s. Miller Chemical Pvt. Ltd. but no response. The assessee also failed to produce the party, therefore, an amount of Rs.1,98,85,735/- was added to the income of the assessee. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who deleted the said addition, therefore, the revenue has filed the present appeal before us.