NOBLE PUBLICITY SERVICES P.LTD,MUMBAI vs. DCIT RG 9(2), MUMBAI

This appeal has been filed by assessee against the order of Commissioner of Income-Tax (Appeals)-20, Mumbai, dated 29.04.2014 for A.Y. 2010-11 on following ground:

“1. The Ld. CIT(A) erred in confirming the addition of Rs.1,55,27,483/- being Trading Purchases from 5 parties stating that “the appellant has failed to produce these parties even after specific request by the Assessing Officer, hence no justification can be given for grey market business or black transaction or Hawala Entry transactions or such bill providing business done on the basis of commission” but failed to appreciate that suspicion however strong may be but it cannot partake the character of proof which was submitted to the AO & ld. CIT(A) in the course of proceeding.

2. WITHOUT PREJUDICE TO THE ABOVE, the ld. CIT(A) erred in considering the Purchases as Bogus, merely because Appellant failed to produce parties even after specific request by Assessing Officer but failed to appreciate that 2.1 Appellant is dealing with more than 100 parties. Hence it was beyond the control of Appellant to produce the market parties after a period of more than 3 years from date of transaction.

2.2 Appellant being trader, relationship with parties of Purchase & Sales are transactions based.

3. WITHOUT PREJUDICE TO THE ABOVE, the ld. CIT(A) erred in confirming entire disallowance of purchases of Rs.1,55,27,483/- but failed to appreciate that 3.1 Appellant has traded in Advertising materials hence for Purchase of Goods there was corresponding sales of Goods and Sale of Goods A.Y. 10-11 [M/s. Noble Publicity Services P. Ltd. vs. DCIT] Page 3

was supported by corresponding Purchase. Hence if Purchase is Bogus and to be added to Income in that case corresponding Sales of goods will be impossible/to be reduced from Sales/Income as per normal accounting Principles/natural justice.

3.2 The Appellant produced proper Qty. records of Purchases of goods & corresponding Sales of goods & further the Assessing Officer has also accepted in principle the Quantitative stock records & marked them annexure A-B-C to the order at page 9.

3.3 It is not a Case of Claiming of Deduction of Expenses but against Purchases of Rs. 1,55,27,483 there is Corresponding sales of Rs.1,58,06,279 and balance Rs.2,78,796 offered for tax.”

1) M/s. Om Corporation 2) Jigan Enterprises 3) Parshva & Company 4) Amar Enterprises 5) Big Trade Agency So, he made addition of above amount being unproved purchases. A.Y. 10-11 [M/s. Noble Publicity Services P. Ltd. vs. DCIT] Page 4 2.1 Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee and having considered the same, CIT(A) confirmed the addition in question.

2.2 Same has been opposed before us on behalf of assessee. Before us, ld. Authorized Representative drew our attention to page no.27 of paper book inter alia detailed invoices of Jigna Enterprises which has phone no., details of items, details of VAT and details of CST. The stand of assessee has been that in spite of details of invoice having phone no. of parties and their VAT, CST details thereof, Assessing Officer was having option to make enquiries from assessee from phone no. mentioned above. Assessing Officer had option to verify the facts with regard to transactions from details of VAT and CST. It has not been done in spite of VAT and CST no. detailed as under:

VAT TIN NO. 27560404324 V w.e.f. Dt. 1-4-2006 CST TIN NO. 27560404324 V w.e.f. Dt. 1-4-2006 According to us, it is a case of insufficient enquiries on the part of Assessing Officer before reaching conclusion against assessee. The transaction should not be disbelieved in absence of incomplete enquiries at the end of Assessing Officer as discussed above. So, in the interest of justice, we set aside the issue to Assessing Officer with direction to set aside the same as per above discussion and as per fact and law after A.Y. 10-11 [M/s. Noble Publicity Services P. Ltd. vs. DCIT] Page 5 providing due opportunity of hearing to the assessee. Since, we restore the matter on preliminary issue as discussed above, we are refraining to comment on merit of issue at hand.

Pronounced in the open Court on this the 08th day of August, 2016.