TaxTMI 
TaxTMI 
2017 (6) TMI 955
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....ally at the office situated at Vanijya Bhavan, Vadodara. Several documents and papers were seized. Some of these documents were typed, giving details of outstanding amounts payable to M/s.J.K.Enterprises i.e. assessee by the purchasers. On these typed documents, Mr.Jagdish Mehta, 50% partner of the firm, had in his own handwriting made following remark:- "Material sold in cash by J.K. In March, 92 bills has been prepared on these parties name, interest around 6.5 lacs = 3.3 lacs to be paid to J.L.Mehta + profit" 4. The names of the parties, amount outstanding and since when were mentioned in the documents in typed format as under:- Name of the party Amount O/s. Since Arihant Thermowares P. Ltd. 5,00,000 March, 92 Anup Plastic 3,45,446 March, 92 Fozdar Industries 1,42,612 Sept. 92 Flovin Plastic 1,26,608 March, 92 Hi-tech Plastic 68359 March, 92 Plas Colour 2,79,155 March, 92 R.M.P.Plastic Pact 12,00,000 March, 92 Rs.27,69,970 5. The revenue noticed that on the total outstanding amount of Rs. 27.69 Lacs calculated by the assessee, the interest of 6.5 Lacs came to 27.5% thereof. The Assessing Officer noticed that Shri J.L.Mehta in his hand....
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....t the account was opened at the request of Shri J.K.Chaturvedi, who happened to be the partner of the assessee firm. The cash deposits were made by Shri Janak Shah on behalf of the assessee. It was found that as per the ledger of the assessee firm, sales worth Rs. 71.15 Lacs were supposed to have been made to M/s.Devidayal Plastics whereas Shri Balkrishna Devidayal stated that he had not purchased any material from the assessee firm. The Assessing Officer was prima facie of the opinion that the assessee had made such sales in the market and merely created entries in the accounts of M/s.Devidayal Plastics. On such sales also according to the assessee premium of 27.5% of unaccounted cash receipt would have been received. 8. On such premises, the Assessing Officer issued a show cause notice to the assessee and confronted the firm with adverse materials. Shri Jagdish Mehta filed a reply admitting his handwritings on the loose papers but claimed that this did not reflect any cash receipts. Regarding the pay-in-slips of the bank account of M/s.Devidayal Plastics being found from the office of the firm, he clarified that, that may have been done by the mutual consent of the employees of ....
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....les were made exactly on the same day and the payments were outstanding for the same period of time. There was no material to show this. 12. With respect to transactions with Ms/.Devidayal Plastics, the Tribunal though confirmed the ultimate conclusion of the Assessing Officer, took a slightly different route. The Tribunal did not hold that the cash deposited in the bank account of M/s.Devidayal Plastics were made by the assessee, which reflected the assessee's sale outside the books. The Tribunal referred to a remand report during which the crossexamination of Shri Balkrishna Devidayal was carried out but noted that nothing contrary to his initial statement had come out through such cross-examination. The Tribunal held that the sales were made to M/s.Devidayal Plastics but they were not reflected in their books and, therefore, confirmed the premium against such sales also. 13. With respect to M/s.Jhaveri Polymers concerning total sale of Rs. 11.61 Lacs, on which also the Assessing Officer had calculated premium of 27.5% on the ground that the sales were not reflected in the said agency, the Tribunal observed that such sales were reconciled but the premium so received has not....
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....ch came to Rs. 6.65 Lacs. The Assessing Officer thus concluded that the total of Rs. 6.65 Lacs against the total sale of Rs. 26.75 Lacs was to be received in cash. Shri J.L.Mehta neither in his statement nor in his written reply before the Assessing Officer offered any convincing explanation. He merely admitted that the entries were in his own handwriting. His rather vague and general explanation was that the sales were shown in cash to differentiate from on-account sales, where payments would be made later. At a later point of time he changed this theory somewhat and suggested that the bills were not raised, though required and, therefore, the firm had lost sizable amount. He had calculated such amount at the rate of 27.5% per annum and indicated the figure so that the same can be recovered from the errant employees. It has also come on record that none of these sales were reflected in the accounts of recipient agencies. 19. With respect to M/s. Devidayal Plastics material on record suggested that the pay-in-slips of the bank account of the said firm were found from the office of the assessee firm. The statements of Shri Balkrishna Devidayal confirmed that the amounts were deposi....