TaxTMI 
TaxTMI 
2015 (4) TMI 1080
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....e following additions: a) Unexplained expenditure relating to purchases of Rs. 63,87,826/- and b) Adhoc addition from out of purchases - Rs. 4,72,034/-. 3. The assessee filed the cross-objection only to support the order passed by the ld.CIT(A). 4. The facts relating to the above said issues are stated in brief. The assessee is engaged in the business of supply of sand to various builders. The first issue relates to the addition made out of purchase expenditure u/s 69C of the Act treating part of purchase expenditure as unexplained expenditure. During the course of assessment proceedings, the AO asked the assessee to furnish the list of persons from whom the sand was purchased. The AO noticed that the assessee has pu....
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...., incurred expenditure on such purchases which is not explained. The purchases are not being treated as bogus or sham rather the expenditure incurred on such purchases is treated as unexplained. 4.5 In view of the above facts and findings in the paragraphs mentioned above, the aggregate of the purchases detailed in para no.4.4 above, totaling Rs. 63,87,826/- is treated as unexplained expenditure u/s 69C and added to the total income of the assessee. Penalty proceedings u/s 274 r.w. 271 (1)(c) are separately initiated for concealing particulars of income" 5. The Ld.CIT(A) noticed that the assessing officer has not disputed the fact of purchase of goods and further they have been duly recorded in the books of account. He further noticed th....
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....see made purchases to the tune of Rs. 38.69 lakhs from two parties named M/s Umiya Sales Agency Pvt Ltd and M/s Mercury Enterprises, whose names found place in the list provided by the Sales Tax Department. The AO placed full reliance on the enquiries conducted by Sales Tax Department in respect of the parties, referred above. Accordingly, the AO took the view that the purchases to the tune of Rs. 38.69 lakhs have to be treated as unexplained expenditure. Accordingly, he assessed the same u/s 69C of the Act. 11. The ld. CIT(A) deleted the addition and hence the Revenue is in appeal before the Tribunal. 12. The ld. DR strongly placed reliance on the order of Assessing Officer. 13. On the other hand, the ld. AR subm....
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....ssee has discharged its primary onus of showing books of account, payment by way of account payee cheque and producing vouchers for sale of goods, such an addition could not be sustained. The Ld CIT(A) has also appreciated the contentions of the assessee that he was not provided with an opportunity to cross examine the sellers, which is required to be given as per the decision of Hon'ble Kerala High Court in the case of Ponkunnam Traders (83 ITR 508 & 102 ITR 366). Accordingly, the Ld CIT(A) has deleted the impugned addition. On a careful perusal of the decision rendered by Ld CIT(A) would show that the first appellate authority has analysed the issue in all angles and applied the ratio laid down by the High Courts and Tribunals in deciding....
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....ing officer has made this addition without giving opportunity to the assessee. Further, it was submitted that he had already requested the purchase parties to send confirmation letter directly to the AO. The Ld CIT(A) held that the assessing officer has made this addition without rejecting the books of account and accordingly deleted this addition. 9. We notice from the assessment order that the assessing officer has made adhoc addition only on the reasoning that the assessee has failed to furnish the details. The case of the assessee before the Ld.CIT(A) was that he was having all the relevant details. We notice that the first appellate authority has deleted this disallowance without verifying those details. Since this addition was made....