The Tax Publishers2020 TaxPub(DT) 5448 (Mum-Trib) : (2021) 085 ITR (Trib) 0032


Section 69 Section 143(3)

Where entry providers, filed affidavits, stating that they had merely entries and no goods were supplied to assessee and before AO/CIT(A) basic documents, like invoice stock register bills, ledger accounts were not furnished as alleged that no proper hearing opportunity was given and also as cross-examination of parties the issue being genuineness of purchasee was remitted back to AO to pass de novo assessment by providing assessee cross-examination of disputed parties.

Income from undisclosed sources - Addition under section 69 - Alleged non-genuine purchases vis-a-vis entry operaters confirmed having not supplied goods -

During the course of assessment proceedings, AO received information from the Sales Tax Department, Government of Maharashtra that the assessee had obtained bogus purchase bills from the entry providers. Noting that the Proprietors/Partners of the entry providers had also filed affidavits before the Sales Tax Authorities stating that they have issued only sale bills and no real transaction had taken place, the AO asked the assessee to prove the purchases from the 8 parties. In response to it, the assessee filed copy of purchase bills, ledger account along with sales invoice, delivery challans. However, the assessee failed to file confirmation of purchases from the above parties. In response to the action of AO to produce the above parties for verification of the genuineness of the transaction, the assessee filed the reply. However, the AO was not convinced with the reply on the reason that assessee showed its inability to file the confirmation of the said purchases ; also the assessee showed its inability to produce the above parties to prove the genuineness of the purchases. As the assessee failed to discharge the onus cast on it, the AO made addition as bogus purchases. In the instant case, the issue was genuineness of purchases, which arose because of the investigation done by the Sales Tax Department, Government of Maharashtra which resulted in the affidavits filed by the entry providers that they had merely provided entries and no goods were supplied. In the overall facts and circumstances of the case, the contentious issue would be resolved through cross-examination of the parties. As noted by CIT(A), the assessee could not furnish details in the prescribed format item-wise/party-wise with the plea that the required information was not maintained in the prescribed format; the assessee also could not furnish confirmed copy of ledger account, present mailing address; the assessee also failed to produce those parties for verification. Observing that in the absence of current mailing address, it is not possible for the Revenue to summon them for examination/verification/cross-examination. Held: In the instant case, the assessee failed to file before the AO/CIT(A) confirmed copy of the ledger account, present mailing address of the said parties. In such a situation, in absence of current mailing address, it was not possible for the revenue to summon those parties for examination/verification/cross-examination. Therefore, the reliance placed by the assessee on the decision in Andaman Timber Industries was misplaced. Thus, considering the factual scenario and the position of law, the order of the CIT(A) was set aside and the matter was restored to the file of the AO to make a de novo order, after allowing the opportunity of cross-examination to the assessee.


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