TaxTMI 
TaxTMI 
2010 (8) TMI 1004
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....solid windowtext .5pt; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-border-insideh:.5pt solid windowtext; mso-border-insidev:.5pt solid windowtext; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin; mso-fareast-language:EN-US;} Shri Shailendra Kumar Yadav (JM) and Shri D. Karunakara Rao (AM) For the Assessee : Shri Nithin Pathak For the Department : Ms. Manju Ajwani ORDER Per D. Karunakara Rao AM These are the cross appeals and both these appeals are filed against the order of the CIT(A) dated 13.3.2007. ITA No. 702/PN/ 2007 is filed by the assessee and the grounds in this appeal raise three issues relating to (i) addition of Rs. 1,60,512/- in respect of the purchases from M/s Anirita Trade Links (wife's concerne); (ii) disallowance of supervision fees of s 2.18 lakhs paid to Mr Shriharsh L Joshi (brother of the assessee) and (iii) addition of Rs. 2,80,476 u/s 41(1) of the Act. The grounds of the revenue raised ITA No. 972/PN....
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.... promised to be produced by 3.2.2006. This statement of Mrs. Anita H. Joshi was recorded in the presence of the assessee. The Assessing Officer then proceeded to record statement of the assessee on oath u/s 131 of the Income Tax Act, 1961, the relevant portion of which was reproduced on page 3 of the assessment order. In response to question no.3 suggesting that the transactions with the assessee were only paper transactions and no amounts were either payable or receivable, it was stated that no comments could be made as no records/documents were available to support the findings. The assessee then agreed to the additions on the findings made. The Assessing Officer, therefore, proceeded to make an addition of Rs. 3,21,556/- on account of purchases made and also made an addition of the opening balance of Rs. 5,78,914/- as per provisions of section 41(1) of the Income Tax Act, 1961 as there was no liability outstanding. Further, the assessee had debited an amount of Rs. 2,18,500/- as payable towards site provision charges to M/s. Pratibha Enterprises. M/s Pratibha Enterprises is the proprietorship of assessee's real brother Shri S.L. Joshi. Shri S.L. Joshi was not filing the return o....
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.... she filed the extracts of the accounts of the assessee when called for by the Assessing Officer on the basis of information from the husband Shri H.L. Joshi. The auditors have not disclosed these transactions which they were required to disclose in the audit report u/s 40A(2)(b) of the Income Tax Act, 1961. There is no documentary evidence that any goods had infact been purchased from M/s ATL. The assessee's contention that the purchases of very small amounts was made from M/s. ATL as compared to the total sales made is irrelevant in so far as the purchases made by the assessee have not been proved either by receipt of these items, their further consumption or sale or even by payment of the amount. I, therefore, agree with the observation of the Assessing Officer that the filing of the time barred returns by the assessee's wife was an afterthought to justify the purchases made by the assessee. The filing of the sales tax returns by M/s ATL does not prove in any way that the purchases had in fact been made from M/s ATL. In any case, the order of the sales tax officer for the A.Y. under consideration are dated 13.2.2006 for all the three years. Further, the contention of the assesse....
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....ale tax returns filed by the said concern is not a clinching evidence and in the absence of valid purchase or sale bills, the said returns are rightly rejected by the Revenue. Considering the above factual position we find that the assessee failed to discharge the onus in respect of the claim and therefore, we find no reason to interfere with the impugned order of the CIT(A). Accordingly, this part of the ground of the assessee is dismissed. 6. Regarding the revenue's appeal, the grounds 1 to 6 are messy and they are not as per the relevant rules. Assessee's counsel filed a note explaining the grounds vide para 5 to 7 of the note. Considering the said note and the grounds, we find that the revenue is aggrieved against the decision of the CIT(A) in granting relief in respect of the additions of (i) 1,61,054/- out of Rs. 3,21,556/- and (ii) Rs. 5,74,914/-. Relevant grounds of the revenue have to be dismissed considering the remand proceeding granted by the CIT(A) and also the detailed reasoning given by him in the impugned order. In so far as the invoking the provisions of section 41(1) of the Act are concerned, we find the detailed discussion and decision given in the context of ....
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....e has to be allowed and the order of the CIT(A) has to be reversed in this regard. Accordingly, this part of the grounds are allowed. 10. Addition of Rs. 2,80,476 u/s 41(1) of the Act: In this regard, it was mentioned that it is part of the figure of Rs. 4,21,038/- and the CIT(A) confirmed the addition to the extent of Rs. 2,80,476/-. Further it was stated that the relevant creditors were regular moving accounts ie. Parties from whom purchases were regularly being made over the last many years. The difference had arisen due to discounts given, rejection made by the assessee which were accepted by the supplier without any express intimation to the appellant. As payment is made sometimes on account and not with respect to specific bills the discounts, rejections etc which had been accepted by the suppliers did not come to the knowledge of the assessee's accountant. As the above difference were not reconciled on year to year basis it was only on account of Assessing Officer's intimation that the above differences were noticed. It was stated that for the year ending 31.3.2006 the above amounts had been written back and the assessee was willing to offer the said amount to tax if the ....
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.... the total income for A.Y. 2006-07 as the same had already been taxed in order u/s 143(3). The details of Rs. 2,80,476/- was as under: Name of the party Rupees Sugandhtara Electricals 12,482 Indian Cable Corporation 2,45,621 Ajantha Electricals 11,750 Powercraft Engineers 10,623 Total 2,80,476 Finding of the CIT(A) as given in para 2.4 is as under: "2.4 I have gone through the facts of the case from the assessment order, remand report of the Assessing Officer and the rejoinder submitted by the appellant. Regarding cessation of liability of Rs. 4,21,238/-, ground of appeal no.(v), it was submitted that the assessee has made a payment of Rs. 1,03,300/- by an account payee cheque on 21.8.2003 to M/s Kiran Electrotechnic. Further the amount of Rs. 32,229/- was reconciled in F.Y. 2004-05 and offered to tax for A.Y. 2005-06 as against Rs. 37,273/- taxed by the Assessing Officer in A.Y. 2003-04. It is seen that the return of income was filed on 29.11.2003 for the assessment year under consideration. The account payee cheque to M/s Kiran Electricals was issued on 21.8.2003 i.e. before the filing of return. As the Assessing Officer had c....