EVONIK CATALYSTS INDIA P.LTD,THANE vs. ITO WD 1(2), KALYAN

During hearing of these appeals, the ld. counsel for the assessee, Shri Naresh Kumar along with Shri Varun Sankhesara and Shri Tehmton Wadia, contended that no discrepancy was noted in the statement recorded by the concerned officer as the assessee was not confronted with the statement and further the assessee was not provided cross examination, ask for by the assessee, by the Assessing Officer. It was also contended that the assessee filed confirmation from Maniratan. The Bench asked the query as to why Maniratan was not produced before the Assessing Officer. The ld. counsel contended that he refused to appear before the Income Tax authorities. The crux of the argument, on behalf of the assessee is that the assessee discharged its onus by filing a confirmation from Mr. Maniratan. The ld. counsel explained that the assessee also paid VAT on behalf of Mr. Ratna. On the other hand, the ld. DR, Miss. Anupama Singla, strongly defended the order of the Ld. Assessing Officer by arguing that the onus cast upon the assessee was not discharged because if the assessee is in a position to file the alleged confirmation from Mr. Maniratan, he can be produced also. The ld. DR contended that the assessee right from assessment stage and till the state of the Tribunal did not provide the correct/new address of Mr. Maniratan and even no civil/criminal action was taken by the assessee against Mr. Maniratan with respect to its claim/refund of VAT. Our attention was specifically invited to pages 30 and 38 of the paper book by taking a serious objection to the signatures by explaining that there is huge difference in the signature and no quantitative details were produced by the assessee. In reply the ld. counsel for the assessee reiterated that the assessee was not provided opportunity to cross examine of Mr. Maniratan. The Bench raised a query, whether Mr. Maniratan was produced before the Assessing Officer. The ld. Counsel fairly agreed that he was unable to produce Mr. Maniratan.

2.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee is a closely held private limited company, engaged in the business of manufacturing nickel based catalyst, activated alloy catalyst, precious metal catalyst and other allied items, filed original return, declaring net profit after tax of Rs.5,10,13,856/-, which was set off against the losses of Assessment Year 2009-10. The turnover of the assessee, during the year under consideration, was Rs.90,67,59,607/- and the gross profit was shown at Rs.21,62,14,000/- (23.8%). The assessee filed revised return vide letter dated 10/09/2012 showing increase in taxable income of Rs.5,44,98,649/-. The said return was selected for scrutiny and order u/s 143(3) of the Income Tax Act, 1961 (hereinafter the Act) was passed making disallowance of Rs.2,57,79,750/- on account of purchases made from one supplier M/s Maniratan Metal. A survey was conducted at the office premises of the assessee on 06/02/2013, wherein, the survey team check the purchases and modus-operandi of the assessee for such purchases and verified the stock. The statement of executed director, Shri Krishnan Muthukumar was recorded. A specific question was asked with respect to purchases made from M/s Manitratan Metal. Original purchase bills of M/s Maniratan Metal were impounded. The ld. Assessing Officer vide letter dated 12/02/2013 asked for various details with respect to the purchases, which were replied vide dated 25/02/2013. A show-cause notice dated 11/02/2013 was issued to the assessee as to why the purchases made from M/s Maniratan Metal, should not be treated as non-genuine as the proprietor deposed from in sworn statement before the sales tax authorities that no such business had ever been carried on by him. The assessee did not produce Mr. Maniratan but submitted a affidavit dated 14/03/2013 signed by executive director of the assessee company Shri Krishnan Muthukumar. The assessee also filed a letter of confirmation from M/s Maniratan Metal. The stand of the assessee is that various documents were produced by the assessee, therefore, the purchases are genuine. The assessee has also took a stand that the Assessing Officer could not produce Mr. Maniratan for cross examination, whereas, the stand of the department is that it is the duty of the assessee to produce him and heavy onus is cast upon the assessee. One Mr. Sanjay B. Jain (Kothari) proprietor of M/s Maniratan Metal also made a statement before the sales tax authorities on 28/07/2011 in respect of business activities of M/s Maniratan Metal, wherein, he tendered that he never engaged in the activity of purchase and sales of any commodity, except brokerage business with the assessee. The Assessing Officer issued notice u/s 133(6) dated 07/02/2013 to M/s Maniratan Metals, which was returned by the postal authorities with the remark ‘not known’. During hearing, the ld. DR invited our attention to pages -30 and 38 of the paper book containing the affidavit of Shri Sanjay B. Jain and a tax invoice dated 23/06/2009 (bill No.30 of Maniratan Metal, where the signatures are all together differing. When this objection was pointed out to the ld. counsel for the assessee, no satisfactory reply was adduced. The assessee claimed to have made purchases of platinum from M/s Maniratan Metals from time to time during Financial Year 2009-10 against payment. On 26/03/2012, a general entry was passed towards VAT payment. The assessee was not allowed the VAT credit for the supplier i.e. M/s Maniratan Metals as the amount of Rs.2,54,750/- was paid by the assessee. This payment was to be made by the said supplier. An attempt was also made through the Income Tax Inspector to trace M/s Maniratan Metal. The Income Tax Inspector vide report dated 12/02/2013, reported that there was no trace of M/s Maniratan Metal at the given address. Shri Sanjay Jain also tendered in his statement that he has never signed any cheque on behalf of M/s Maniratan metal. Shri Sanjay Jain also sworn an affidavit before the authorities that he never indulged in any transaction of buying and selling of any metal with the assessee. This statement was provided to the assessee vide letter dated 11/03/2013. In view of these facts, the assessee was asked to produce the proprietor of M/s Maniratan Metal asking to furnish the factual matrix and as to why these purchases may not be treated as non-genuine specially when the proprietor specifically denied that no such purchases had ever been carried out by him. Undisputedly, under these circumstances, available on record, we are of the view that it is the assessee, who has made the claim, therefore, heavy onus is cast upon the assessee to explain the factual matrix and substantiate its claim, which has not been discharged. It is the duty of the assessee to substantiate its claim, therefore, directed to produce the concerned person/persons before the Assessing Officer. The ld. Assessing Officer is directed to examine the factual matrix and genuineness of claim of the assessee and decide in accordance with law. The assessee be given opportunity of being heard. Thus, the appeal of the assessee is allowed for statistical purposes only.