2017 (12) TMI 1409

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....e Act in connection with the couple of additions made in the regular assessment order made u/s.143(3) of the Act. The appeal-wise adjudication is given in the following paragraphs. ITA No.463/PUN/2015 (By Assessee - A.Y. 2009-10) 2. Briefly stated relevant facts of the case include that the assessee is a company engaged in the business of manufacturing of press components, assembly of Diesel Genset and Engineering Workshop. During the year under consideration, assessee has taken interest bearing secured and unsecured loans and claimed interest expenditure. Assessee gave certain interest free advances too. AO issued show cause notice to the assessee to explain as to why interest debited to the profit and loss account may not be d....

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....rs Appeal No: 463/PN/ 15 pertains to levy of penalty u/s 271(1)(c) on assessment u/s. 143(3). The appeal against the additions made in the assessment u/s. 143(3) were decided against by the CIT(A) vide order dated 17/12/2012. Hon'ble Income Tax Appellate Tribunal, B Bench, by order dated 31/3/2015 has restored the appeal back to the CIT(A) regarding the disallowance of unverifiable creditors. Copy of the said order is enclosed. The penalty proceedings arise out of the disallowance in regular assessment of (1) interest on borrowings Rs. 15,47,000 and (2) unverifiable creditors of Rs. 4,56,45,562. It is prayed that as the quantum appeal has been restored to the CIT(A), the appeal against penalty may also be restored back to CIT(A)." 4.....

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....rector of the company. It appears similar bogus purchases was reported involving the other assessment year and other group concerns. Eventually, the reassessment was completed by the AO making the addition of Rs. 6,68,56,448/- only as per the discussion given in Para 7.4 of the assessment order. Some of such purchases relating to other parties are required to be treated in some other years and other good concerns. Therefore, the addition was only around Rs. 6.69 crores (rounded off) against the discovery of Rs. 8.77 crores (rounded off). The fact is that AO made the entire such bogus purchases as additional income of the assessee. AO rejected the request for restricting the addition to the segment of such bogus purchases. Further, the asses....

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....o.126 of the paper book, we find the GP rates of the assessee vary from 7.59% in the A.Y. 2008-09 to 23.5% in the A.Y. 2007-08. It is the prayer of the assessee that the average of the gross profits for the 3 years in the past may be considered to restrict the GP lined addition accordingly. Further, referring to the information about filing of the appeal by the other group concerns before the Settlement Commission, Ld. Counsel for the assessee mentioned that these facts and outcome from ITSC should also be considered while deciding the grounds of appeal of the assessee. Ld. Counsel for the assessee submitted that the decisions mentioned above should be considered and direct the AO to resist making entire purchases as additional income of th....