TaxTMI 
TaxTMI 
2016 (2) TMI 191
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.... vide order dated 11.07.2008 granted substantial relief to the Assessee. Aggrieved by the aforesaid order of ld. CIT(A), Revenue is now in appeal before us and has raised the following grounds:- 1. On the facts and in the circumstances of the case and in Law, the Ld.CIT(A)-III, Surat has erred in deleting the addition of Rs. 1,87,46,519/- made by the Assessing Officer on account of Bogus/ Non-existent Liability. 2. On the facts and in the circumstances of the case and in Law, the Ld.CIT(A)-III,Surat has erred in restricting the addition of Rs. 3,62,875/- to Rs. 1,00,000/- made by the Assessing Officer on account of disallowed carting expanses. 3. On the facts and in the circumstances of the case and in Law, the Ld.CIT(A)- III,Surat has erred in deleting the addition of Rs. 2,39,958/- made by the Assessing Officer on account of Bogus/ Purchases. 4. On the facts and in the circumstances of the case and in Law, the Ld.CIT(A)-III,Surat has erred in deleting the addition of Rs. 7,94,011/- made by the Assessing Officer on account of difference in the balance. 1^st ground is with respect to deletion of addition on account of bogus/non existing liabil....
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....ns of section 145 of the Act have not been invoked. Further, section 41(1) of the Act is also not applicable in this case merely because no details were filed by the appellant or the liability is being carried forward from year to year. However, the quantum of liability is not the same every year and part of it is being paid every year and fresh liability gets added to the outstanding one. I also find that the AO's observation that hundreds of persons were paid on a single day which could not be possible considering the infrastructure available with the appellant, is also misconstrued. The appellant explained that this impression arose because a single entry was passed in the books of accounts in respect of a large number of persons but those persons were not paid directly by the appellant but the collective amount would be given to the manager of the appellant who would make the payment to various persons on different dates. I have also gone through the copies of truck rent payment and find that it mentions the names of the persons, truck numbers, weight of material, amount paid to the said persons and complete details are available in this case. It is also seen that ....
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.... 6. Before us, ld. D.R. pointed to the various observations of the A.O and thus strongly supported the order of A.O. He further submitted that before A.O, Assessee did not furnish the details called for by the A.O nor filed the details about the truck their L.R. numbers and other proof of having incurred the expenditure. He therefore submitted that in such a situation the A.O was fully justified in treating the liability as non existent. He thus supported the order of A.O. The ld. A.R. on the other hand reiterated the submissions made before A.O and ld. CIT(A) and further relied on the decision of Hon'ble Gujarat High Court in the case of CIT vs. Bhogilal Ramjibhai Atara Tax Appeal No. 588 of 2013 order dated 04.02.2014. He also placed on record the copy of the aforesaid decision. He thus supported the order of ld. CIT(A). 7. We have heard the rival submissions and perused the material on record. The issue in the present case is about making addition of on account of non existing liability. We find that ld. CIT(A) while deleting the addition has noted that he has gone through the copies of truck rent payment and it mentioned the name of the persons, truck numbers, weight of mat....
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.... cure for it. Be that as it may, insofar as the orders of the Revenue authorities are concerned, the Tribunal not having made any error, this Tax Appeal is dismissed. 8. Considering the findings of ld. CIT(A) and the decision of Hon'ble Gujarat High Court cited hereinabove, we find no reason to interfere with the order of ld. CIT(A) and thus the ground of Revenue is dismissed. 2^nd ground is with respect to restricting the addition of carting expenses. 9. A.O noticed that Assessee had debited Rs. 14,51,500/- under the head carting expenses in the books of Amar Enterprises. A.O asked the Assessee to furnish the names and address of the recipients of carting expenses and their confirmation letters. A.O noted that Assessee did not file the confirmation letters nor provided their addresses. He therefore considered the carting expenses to be non verifiable and accordingly disallowed 25% of expenditure amounting to Rs. 3,62,875/-. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who restricting the disallowance to Rs. 1 lac by holding as under:- Before me, the Id. AR submitted that the appellant incurred carting expenses in M/s Amar Enterpri....
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....39,958/- (purchases of Rs. 1,32,701/- from Khwaj Traders and of Rs. 1,07,257/- from Gupta Coal India Ltd.) as bogus purchases and disallowed the same. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who deleted the addition by holding as under:- "Before me, the Id. AR submitted that the appellant made purchases from M/s Khwaja Trade for Rs. 1,32,701/- and from Gupta Coal (I) Ltd. For Rs. 1,07,257/-. The appellant supplied copy purchase bills, details of payment, copy of account of both these parties and details of sales made against such purchases. Payment to both these parties was by cheque and sales against purchase from these parties were not disputed and both accounts were squared up. I have considered the submissions. It is seen that the appellant had furnished copy of purchase bill and details of payments made to the two parties and sales have also been made against the said purchases. Merely, because notice u/s 133(6) of the Act was not served on these two parties would not make the entire purchases bogus. There is no evidence to suggest that the payment made reverted back to the appellant and therefore addition on this account....