TaxTMI 
TaxTMI 
2013 (7) TMI 195
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....rating the facts, as they appear in assessee's appeal in ITA no. 7744/Mum./2010, for assessment year 2004-05. The grounds raised by either party for the years under appeal, read as follows:- Grounds raised by the assessee for assessment year 2004-05 1. On the facts and circumstances of the case as welt as in Law, the Learned CIT(A) has erred in confirming an addition to the extent of Rs.57,36,000/- without according any opportunity of being heard to the Appellant. 2. On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming an addition of Rs.57,36,000/- @ 6% on the total turnover of Rs.9.56 cr by holding that the GP ratio shown by the assessee is lower, without appreciating the facts and circumstances of the case. 3. On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in treating the Gross Profit Ratio @ 6.50% for a trader in 'Steel Industry' and adding the difference in the Gross Profit margins of the Appellant as against the presumed Rate of Gross Profit without considering the facts & circumstances of the case. 4. The Learned CIT(A) erred in adding the sum on account of Gross Profit on the....
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....stances of the case. 4. The Learned CIT(A) erred in adding the sum on account of Gross Profit on the entire Sates without appreciating the fact that the entire Purchases were not even doubted by the AO." Grounds raised by the Department for assessment year 2005-06. "1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) was not justified in deleting the addition of Rs.8,47,24,837/-, being sundry creditor for goods, made uls. 68 of the Act ignoring his own conclusion that the assessee was not reporting true and correct state of affairs particularly when assessee had no delivery details, lorry receipts and the alleged creditors had admitted that the transaction were only on paper." "2. On the facts and in the circumstances of the case, and in law, the CIT(A) was not justified in deleting the addition of Rs.8,47,24,837/-, being sundry creditor for goods, made u!s. 68 of the Act without appreciating that the creditor did not confirm the balance and further in the remand proceedings no evidence as regards the movement of goods between sale I purchase party was furnished. We first take up assessee's appeal in ITA no.7744/Mum./2010, for assessment year 2004-0....
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....e purchases. It has also been stated that before the Assessing Officer a letter was filed on 25th March 2008, wherein the confirmation and details of all sundry creditors were filed as Annexure-G to the said letter. The assessee also produced copies of the bank statements / bank pass book for the relevant period to demonstrate that the transactions were undertaken only through account payee cheques. Details of itemwise, quantitywise and valuewise purchases made from Epsilon Industries Ltd., were filed and also the sales made for the same items matchingwise to M/s. Clariant India Pvt. Ltd. and M/s. Shree Mahalaxmi Techno Engg. Pvt. Ltd. was also given. The learned Commissioner (Appeals), to substantiate this claim, called for the remand report specifically with regard to the letter dated 25th March 2008, along with Annexure-G, wherein confirmation with the parties were filed before the Assessing Officer and to verify the actual facts. The Assessing Officer, vide remand report dated 13th May 2010, however, did not refer to any such addition made on account of Epsilon Industries Ltd. in assessment year 2004-05 but restricted his comment to the addition made in assessment year 2005-06.....
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....Both the remand reports, as mentioned above, are silent on whether the AC indeed received this letter with all the annexure. Further, in the remand report, the AO has objected to acceptance of this additional evidence. This is not a case of the intimations and copies of accounts filed at the appellate stage being additional evidence. In fact, they were filed before the AO but were not considered by him. The letter bears the stamped receipt of the office of the A.O. dated March 25, 2008. The remand was sought for verifying the confirmations and also examining the parties to ascertain the truth. The remand report has not commented adversely about the addition made for AY 2004-05 t of M/s Epsilon Industries Limited. Therefore, it is presumed that the AO has nothing to say on the same. Further, it is pertinent to note that in AY 200 5-06 also the appellant had purchased from M/s Epsilon Industries Limited, but the same AO has allowed the same and made addition only on account of the outstanding amount of Phoenix Aluminum Foils and Allied Products and Medigold Global Limited. The appellant and the two parties from whom the purchases were made have shown the transactions in the Sales Tax....
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....mitted that during the course of search, it was gathered that these purchase and sales are nothing but paper transactions for the purpose of accommodation entry, therefore, the addition made by the Assessing Officer is fully justified. 8. We have carefully considered the rival contentions, perused the findings of the Assessing Officer and the learned Commissioner (Appeals) as well as the material placed on record. In the present case, we find that the Assessing Officer has made the addition on account of entire purchases done with M/s. Epsilon Industries Ltd. on the ground that the entire amount of purchases aggregating to Rs. 5,01,88,500 was shown under the head "Sundry Creditors" and no confirmation from the said party has been filed. The learned Commissioner (Appeals) though has accepted the entire transactions of purchase and sales made by the said party but have proceeded to confirm part of addition after applying gross profit rate of 6.5% on the entire turnover. The assessee is basically engaged in trading of various items like H.R. Coils, M.S. Angles, M.S. Bars, M.S. Pipes, M.S. Round, etc. The purchase and sales are made on the same day and during the year, the assessee ha....