TMI Blog2020 (1) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... PER: SHAMIM YAHYA This is an appeal by the assessee against the order of the Assessing Officer dated 29/03/2016 u/s.143(3) r.w.s. 144C(1) of the Income Tax Act, 1961 pursuant to the direction of the Dispute Resolution Panel dated 23/12/2016. 2. The grounds of appeal read as under:- Being aggrieved by the order of DCIT, Central Circle - 7(2), Mumbai ('learned Assessing Officer') issued under section 143(3) read with section 144C(13) of the Income-tax Act, 1961 ('Act'), this appeal petition is submitted on the following grounds which it is prayed may be considered independently without prejudice to one another; 1.0) Jurisdiction exercised by the learned Transfer Pricing Officer is bad in law On the facts and circumstances of the case and in law the Hon'ble DRP-1, Mumbai ('DRP') erred in confirming the determination of the Arm's Length Price ('ALP') at NIL by the learned Transfer Pricing Officer ('TPO'J in his order under section 92CA by treating the specified domestic transactions ('SDT'J as bogus and sham transactions. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into contract for purchase of guar gum i.e. 1 March 2013 as the actual date of purchase instead of the date of delivery and purchase as mentioned in the tax invoice i.e. 31 March 2013 based on which the purchases were held to be non- genuine and sham transactions. 3.2) Hon'ble DRP erred in confirming that the purchase of guar gum was in the nature of bogus purchase merely based on the observation of learned TPO in relation to the dates of purchases, ignoring the submissions and following documentary evidences produced by the Appellant in support of the genuineness of the SDT; a) Copies of tax invoices of buyer (appellant) as well as the seller i.e. Stride Multitrade Pvt Ltd b) Copy of acknowledged intimations to the Godown in relation to transfer of goods by the buyer (Appellant) as well as the seller (Stride Multitrade Pvt Ltd) c) Quantitative analysis and reconciliation of purchase and sales Therefore, the transfer pricing adjustment on purchase of guar split (gum) amounting to ₹ 1,00,82,50,230 confirmed by Hon'ble DRP is bad in law and needs to be deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sr.No. Nature of Transaction Name of associated enterprise Amount in INR Method 1 Purchase of Guar Seed Stride Multitrade P. Ltd. 21,91,99,540 CUP 2 Purchase of Crude Palm Oil Empire Multitrade P. Ltd. 60,91,80,233 CUP 3 Purchase of Crude Palm Oil Kuldeep Overseas P. Ltd. 55,75,91,557 CUP 4 Purchase of Crude Palm Oil Aish w ary a Mark trade India Pvt. Ltd. 6,02,96,490 CUP 5 Purchase of Guar Gum Split ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as taken by the assessee, the said purchase was treated as bogus transaction entered into by the assessee. 9. With regard to the purchase of guar seed, the TPO has commented that the assessee itself has agreed to the non genuineness of the purchase transaction hence, the same was treated as bogus transaction entered into by the assessee. The TPO finally concluded as under:- In view of the above discussion the total adjustments made to the international transactions reported by the assessee for assessment year 2012 -2013 stands as below : Sr.No. Particulars Amount in Rs. ALP 1 Purchase of Crude Palm Oil from Empire Multitrade P. Ltd. 60,91,80,233 NIL 2 Purchase of Crude Palm Oil from Kuldeep Overseas P. Ltd. 55,75,91,557 NIL 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Itself are done on 31/03/2013 then how could the supplier intimate the warehouse on 01/03/2013 about the future purchases. Hence, the order of the TPO on addition of ₹ 100,82,50,230/- treating the purchase of guar split as bogus purchases is confirmed and the objection of the assessee is rejected. An attempt was made to furnish certain additional evidence in the form of purported acknowledgement copies of letters submitted to the godown by Stride Multi trade and by the company. However, no reasons have been given as to why these could not be produced before the AO. In fact, no application adverting to DRP Rules for adducing evidence has been submitted. We find these documents to be self serving. As the transactions have been held as bogus, we turn down the request and dismiss the assessee's request. 1.2.24 As regards Purchases of guar seeds by the assessee it is observed that the assessee has by mistake shown the purchase of guar seeds instead of showing the same as sales return and even the TPO has mentioned In detail about the reason for addition. Hence, the AO is directed to verify if the assessee has by mistake shown purchases instead of sales ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods. Both importing and clearing of the goods were done by M/s Ruchi Soya Industries Limited. The actual High Seas sales were done by Ruchi Soya Industries Limited and the assessee company was merely an intermediary company where the purchases were shown and also the sale was shown on the same day itself at a much lower price. Hence, the assessee company had shown the transaction in the books of accounts without actually executing any documents / taking delivery of the goods etc. 13. Upon assessee's objection the DRP upheld the assessing officer's action by observing as under:- 2.2.3 We have gone through the assessment order, The AO has mentioned in detail the entire transaction of High Seas Sate Purchase executed by the assessee and it is also seen that the AO has taken efforts to carry out the investigation through the details available on record of M/s Ruchi Soya Industries to come to a final conclusion. We concur with the findings given by him on the basis of data emanating four records. Hence, the disallowance of Loss on account of High seas Purchase and sale by the AO is upheld and the objection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been entered as to whether they are at arm's length with each or not. The unusual loss hence obviously needed explanation. The assessing officer asked the assessee to explain the reason for the unusual loss. The assessee never gave any explanation. The assessing officer without any application of mind and without bringing on record the reply or the result of any further enquiry laconically passed the summary assessment order allowing the huge loss. 15. In these circumstances the Learned counsel of the assessee's contention that assessee has provided all the necessary details and the assessing officer has applied his mind is clearly not sustainable. The case laws referred by the Ld counsel of the assessee are not applicable on the facts of the case. In our considered opinion on the facts of this case the decision of honourable Supreme Court in the case of Deniel Merchants P. Ltd. and Anther (supra) is fully applicable. In the said case honourable apex court has expounded that In all these cases, we find that the Commissioner of Income Tax had passed an order under Section 263 of the Income Tax Act, 1961 with the observations that the Assessing Officer did ..... X X X X Extracts X X X X X X X X Extracts X X X X
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