TaxTMI 
TaxTMI 
TaxTMI 
2017 (1) TMI 1332
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....from M/s. Accost Impex. The Assessing Officer sought its explanation qua the source thereof. The assessee's reply came on 04.10.2011 along with ledger account of the above stated payee entity. It pleaded to have received the amount in question as the sale consideration of its sister concern M/s. Metal Enterprise Pvt. Ltd. in lieu of various goods supplied. The assessee further pleaded to have paid the amount collected on behalf of its sister concern to the very entity on the same day of the said sums being credited in its account. The Assessing Officer then sought to treat the above cash credits as unexplained cash receipts. The assessee's latter reply dated 12.12.2011 reiterated its earlier submission. This made the Assessing Officer inter alia to observe that the assessee's above reasoning offered in support of its cash credits lacked genuineness since there was no reason as to why the payee entity would not make payment to its seller than crediting the very sums in cash to sister concern. He further noted the assessee not to have filed even a confirmation of the payee entity. The Assessing Officer also issued Section 133(6) notice to the alleged payee entity which was returned b....
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....eness of transaction in respect of Section 68 of Income Tea Act. Thus it is submitted that the Addition of Rs. 1,33,05,000/- be deleted. In continuation of the hearing and written submission filed on 9th December, 2013 and in response to your Honour's query about the genuineness of the transactions of Sale and recovery of such sale in cash the appellant has to respectfully submit as under. 1. The assessee company i.e. Associated Tradecom Pvt. Ltd., is the sister concern of one Metal Enterprise Pvt. Ltd. The Directors of the appellant company and Metal Enterprise Pvt. Ltd., are same and identical. Proof of the same is enclosed herewith by way of copy of Article & Memorandum of Association of both the companies (Page 1 to 50) and Extracts of Master Data with Registrar of Companies. (Page 51 to 53 ) 2. The fact that said sister-concern Metal Enterprise Pvt. Ltd., had sold goods i.e. Metals, Stainless' steel products to one Accost Implex Pvt. Ltd., is not doubted and is not in dispute. Copies of Sales, Invoices have already been filed. 3. Accost Implex Pvt. Ltd., is a Company registered under the Companies Act and if having its registration is proved therefore from the ....
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....oved beyond doubt as assessee company received the cash as well as recovery of its sister concern Metal Enterprise Pvt. Ltd. In view of this, as the assessee has proved and discharged its onus to fullest extent addition u/s. 68 cannot be made. The appellant relies on the following decisions; (1) High Court of Gujarat in the case of CIT vs. Bhanwarlal Sharma reported in 32 Taxman 281 (2) High Court of Gujarat in the case of CIT(A) vs. Hemant Hasmukhlal Shah 33 Taxmann 347 (3) High Court of Gujarat in the case of CIT vs. Ranchhod Jivabhai Nakhava reported in 21 Taxmann 159 (4) Delhi Tribunal in the case ofMoongipa Investment Ltd vs. ITO reported in 30 Taxmann 113 (5) ITAT Agra Bench in the case of Umesh Electricals vs ACIT. reported in 12 Taxmann 5 (Agra)(TM) In view of the above the additions made u/s. 68 of Rs. 1,34,70,822/-be deleted. I have carefully perused the assessment order as well as submissions made by the AR. It is seen that appellant has not been able to explain the cash received in its account amounting to Rs. 1,34,70,822/- which are shown as received from M/s. Accost implex P. Ltd. on behalf of M/s. Metal Enterprises P. Ltd. it has not been explain....
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.... fails." 4. Learned counsel representing assessee strongly argues that both the lower authorities have erred in making the impugned addition in its hands despite its explanation supported by sufficient cogent evidence. He takes us to assessee's paper book comprising of copy of its articles/memorandum of association along with that of its sister concern followed by necessary documentation under Company Law, monthly VAT return of the alleged payee entity M/s. Accost Impex Pvt. Ltd. showing purchases from sister concern M/s. Metal Enterprises Ltd., copy of ledger account of former payee concern in sister concern's books, sale invoices, alleged confirmation from M/s. Metal Enterprise, ledger account of assessee's sister concern in its books and relevant extract of bank statements/bank account to this effect. Shri Talati accordingly prays for acceptance of assessee's arguments by vehemently contending that the credits in question are in fact in the nature of business transactions not covered u/s.68 of the Act. Shri Kurian strongly supports the CIT(A)'s reasoning extracted in the preceding paragraphs. 5. We have heard both the parties. Case files perused. There is hardly any dispute t....