Tax Tribunal Grants Relief on Assessee's Appeals, Adjusts Disputed Issues

The Tribunal partly allowed the assessee's appeals and dismissed the revenue's appeal. It provided relief on various disputed issues, including restricting alleged bogus purchases to 2% of the value, reducing corporate guarantee commission to 0.50%, granting partial relief on cash income as per seized materials, deleting disallowance of salary paid to Jain family, and making adjustments on individual issues for both assessment years. The Tribunal's decisions were based on the evidence and arguments presented by the parties.

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Issues Involved:
1. Partial confirmation of addition relating to alleged bogus purchases.
2. Partial confirmation of addition relating to Corporate Guarantee commission.
3. Partial confirmation of Cash income as per seized materials.
4. Disallowance of Salary paid to Jain family.
5. Individual issues for AY 2017-18: Cash royalty as per seized materials and Excess expenses in seized materials assessed u/s 69C of the Act.
6. Individual issues for AY 2018-19: Salary paid in cash to employees and Cash transferred through Angadias.

Summary:

1. Alleged Bogus Purchases:
- Issue: The AO disallowed entire purchases amounting to Rs. 32,53,94,174/- (AY 2017-18) and Rs. 22,61,11,767/- (AY 2018-19) as bogus.
- Appellate Decision: The Ld CIT(A) restricted the addition to 6% of the value of purchases. The Tribunal further reduced this to 2%, considering the manufacturing loss and gross profit rate declared by the assessee, which were within acceptable limits.

2. Corporate Guarantee Commission:
- Issue: The TPO made a transfer pricing adjustment at 1.50% of the Guarantee amount.
- Appellate Decision: The Ld CIT(A) restricted the commission to 0.50%, following the decision in the assessee's own case for AY 2010-11 and the Bombay High Court's decision in Everest Canto Cylinders Ltd. The Tribunal upheld this decision.

3. Cash Income as per Seized Materials:
- Issue: The AO assessed Rs. 13.08 crores as unexplained income u/s 69A, with an additional Rs. 39,23,385/- for excess payments over receipts in March 2017.
- Appellate Decision: The Ld CIT(A) granted partial relief by netting off receipts and payments from/to the same person. The Tribunal further allowed a deduction of Rs. 5 lakhs for transactions with Shilan and directed the AO to reduce the addition by revenue expenses and profits from alleged bogus purchases.

4. Disallowance of Salary Paid to Jain Family:
- Issue: Disallowance of Rs. 19,00,000/- (AY 2017-18) and Rs. 29,65,000/- (AY 2018-19) paid to Sangitha Jain and Shubam Jain.
- Appellate Decision: The Tribunal deleted the addition, following its decision in AY 2014-15 and 2015-16, where similar disallowances were deleted.

5. Individual Issues for AY 2017-18:
- Cash Royalty Payment: The Tribunal confirmed the addition of Rs. 15 lakhs as unexplained expenditure u/s 69C, rejecting the assessee's claim that it was included in another seized document.
- Excess Expenditure Over Receipts: The Tribunal deleted the addition of Rs. 39,23,385/- for March 2017, considering the overall tally of receipts and payments for the period.

6. Individual Issues for AY 2018-19:
- Cash Salary Paid to Employees: The Tribunal deleted the addition of Rs. 64,80,000/- u/s 69C, finding the seized document to be a proposal and not conclusive evidence of actual payments.
- Cash Transferred Through Angadias:
- Domestic Transfer: The Tribunal deleted the addition of Rs. 2 crores, accepting the assessee's explanation that it was part of the Rs. 13.08 crores already offered for taxation.
- International Transfer: The Tribunal deleted the addition of Rs. 29,40,000/- u/s 69C, finding no evidence to link the transaction to the assessee company's funds.

Conclusion:
The Tribunal partly allowed the appeals of the assessee and dismissed the appeal of the revenue, providing relief on several contested issues and confirming certain additions based on the evidence and arguments presented.

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