AI Drafter 
TaxTMI 
TaxTMI 
2015 (5) TMI 112
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.... Assessing Officer on account of expenses on packaging material. In the Revenue's appeal (ITA No.3953/Del/2011), the solitary issue that is raised is whether the CIT(A) is justified in deleting the addition of Rs. 12,00,000/- made by the AO u/s 68 of the Act on account of unexplained share application money. We shall first take up for adjudication the assessee's appeal. Assessee's appeal ITA No. 3739/Del/2011 3. Brief facts with regard to assessee's appeal are as follows. The assessee had debited in its P&L account a sum of Rs. 67,21,611/-, being expenses incurred in purchase of packaging material from M/s. S.R. Enterprises. The Assessing Officer had issued notice u/s 133(6) of the Act to M/s S.R. Enterprises in the address furnished ....
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....ng to the AO, the contention of the assessee that M/s Enterprises had sales tax no. did not make the transaction genuine, particularly when the assessee was specifically confronted with the adverse evidences gathered by the Department. The ld.AO further drew an inference that M/s SR Enterprises had not been paid during the year even though purchases were made as early as 2nd April, 2004 (beginning of the financial year). Accordingly, the AO disallowed the expenditure for purchase of packing material amounting to Rs. 67,21,611/-/ 5. Aggrieved by the addition of Rs. 67,21,611/- being unexplained expenses, the assessee preferred an appeal before the CIT(A). Before the CIT(A), assessee submitted an affidavit of Shri Rajnish Tyagi detailing t....
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....f its owner Shri Rahul Aggarwal. On enquiries uls 250(4), the reports of the Inspectors, yet again drew a blank. They could not trace M/s SR Enterprises. Enquiries from the bank also revealed that the owner of M/s SR Enterprises was not Rahul Agarwal but Shri Vijay Gupta. Addresses obtained from the bank also proved futile in as much as one of the notices was returned undelivered. The second notice issued at Kavi Nagar, remained uncomplied with, though. 12. The assessee is repeatedly stating that he has no connection with M/s SR Enterprises. This may or may not be true. However, page 4 of the impugned order clearly suggests that there was a close connection between the assessee and M/s SR Enterprises. Out of the 36 bills raised by M/s SR....
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....accounts u/s 145 of the Act. The assessee fails in ground of appeal No.1. Addition of Rs. 67,21,611/- is upheld." 6. The assessee being aggrieved is in appeal before us. The Ld. counsel submitted that the CIT(A) had erred both on facts and law in confirming the addition and holding the transaction of purchase of packing material from M/s S.R. Enterprises was a bogus transaction. It was submitted that all material and evidences were placed on record to prove the genuineness of the transaction. It was further contended that the CIT(A) has erred both on facts and law in considering material/remand report of the AO without giving an opportunity to the assessee to rebut the same. The Ld. DR on the other hand, strongly relied on the findings/c....
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....r. Some payments were made in the subsequent year to M/s SR Enterprises and as mentioned earlier the beneficiaries of these payments could not verified. The findings of the Income Tax authorities have clearly established that so called purchases made by the assessee from M/s SR Enterprises are nothing but bogus transactions, just to inflate the expenses. These findings of the lower authorities have not been dispelled by the assessee by placing on record any material/evidence. Therefore, we confirm the orders of the Income Tax Authorities and reject the grounds raised by the assessee. 8. Revenue's appeal ITA No. 3953/Del/2011 In revenue's appeal, the solitary issue that is raised is whether the CIT(A) is justified in deleting the addition....