Triveni Enterprises Limited vs Income Tax Officer

1)

On the facts and in the circumstances of the case and in law, the learned Assessing Officer (“AO”) erred in reopening the assessment u/s.147 of the Income-tax Act, 1961 (“ITA”), merely on the basis of third-party information received from the Investigation Wing, without any independent application of mind OR verification, rendering the reopening invalid and bad in law.

2)

The reassessment initiated u/s. 147 of the ITA is invalid as there was no live nexus between the material received and the alleged income escapement in the hands of the appellant. The formation of belief by the AO is mechanical and based on borrowed satisfaction.

3)

On the facts and in the circumstances of the case and in law, the learned AO erred in passing the order u/s. 147 read with section 144B of the ITA, and in making an addition u/s. 68 of the ITA by treating the Appellant’s genuine business sales amounting to Rs. 1,54,11,214/- as bogus, without any cogent evidence OR proper verification. The confirmation of the said addition u/s. 68 of the ITA by the learned Commissioner of Income Tax (Appeals) (“CIT(A)”) is equally erroneous and liable to be quashed.

4)

The learned AO has erred both in law and on facts in making an addition u/s. 68 of the ITA, in respect of alleged bogus sales made to five parties, solely based on the uncorroborated statement of a third party, who is neither the proprietor nor has any legally established connection with the said concerns. The claim of control over these entities by the said third party is unsupported by any credible OR documentary evidence. The reliance on such a statement, without affording the appellant an opportunity of cross-examination and without any independent verification OR material linking the alleged control, renders the addition arbitrary, unwarranted, and bad in law.

5)

On the facts and in the circumstances of the case and in law, the learned AO has grossly erred in invoking the provisions of u/s. 68 of the ITA in respect of genuine sales transactions, without appreciating the following material facts on record: (i) That the appellant was maintaining complete and regular books of account including day-to-day, item-wise stock registers, purchase and sales registers, supported by proper purchase and sales invoices; (ii) That the accounts of the appellant were duly audited under the Income-tax Act, 1961 and also under the Companies Act, 2013 and no adverse remarks were made by the auditors; (iii) That the purchase invoices of vendors were placed on record, and all sales made by the appellant were duly recorded in the item-wise stock register maintained regularly;

6)

That all sale proceeds were received through proper banking channels by account payee cheques, and corresponding payments to creditors for purchases were also made through banking channels; (v) That the appellant submitted a detailed quantitative reconciliation of goods purchased and sold, which was not disputed OR found to be incorrect by the Assessing Officer; (vi) That the ledger accounts of the buyers were furnished and not questioned OR doubted by the Assessing Officer; (vii) That the appellant is a publicly listed company on the Bombay Stock Exchange (BSE), and all relevant corporate and financial information is available in the public domain, thereby further establishing the credibility and transparency of its operations.

7)

On the facts and in the circumstances of the case and in law, the learned AO failed to appreciate that the nature and source of the sales proceeds were duly explained and substantiated, and therefore, the provisions of section 68 of the ITA, which relate to unexplained cash credits, are not applicable to regular business sales transactions.

8)

On the facts and in the circumstances of the case and in law, the learned AO has not brought any material on record to establish that the Appellant received any unaccounted cash against the recorded sales, OR that the transactions involved any accommodation entries OR money laundering.

9)

On the facts and in the circumstances of the case and in law, the assessment order is bad in law and liable to be quashed, as it has been passed without proper appreciation of the facts, documents, and explanations submitted by the Appellant during the assessment proceedings.

10)

On the facts and in the circumstances of the case and in law, the addition made under section 68 of the ITA, being arbitrary, excessive, and made without proper application of mind, deserves to be deleted.

11)

The appellant craves leave to add, alter, amend OR delete any of the above referred ground OR appeal.

f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA;