2018 (7) TMI 875

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....bai [AO] u/s 143(3) of the Income Tax Act, 1961 on 30/03/2014 wherein the income of the assessee has been assessed at Rs. 118.37 Lacs after certain additions / disallowances as against returned income of Rs. 48.44 Lacs e-filed by the assessee on 29/09/2011. None has appeared for assessee despite notice and no adjournment application is on record. Left with no option, we proceed to dispose-off the same on the basis of material available on record and after hearing Ld. Departmental Representative [DR], Shri Rajesh Kumar Yadav. The effective grounds raised in the appeal reads as under:- 1. " On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in restricting addition of unexplained expenditure of Rs. 3,20....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ssessee failed to submit documents in support of its claim" 2.1 The assessee, being resident firm, was engaged as builder & developer during impugned AY and was saddled with certain additions in an assessment u/s 143(3). The following additions are the subject matter of appeal before us:- No. Name Amount (Rs.) 1. Bogus Purchases 40,00,753/- 2. Valuation of Closing Stock 23,93,082/- 3. Disallowance of Sales Promotion Expenses 5,98,650/-   Total 69,92,485/- The addition of bogus purchases have been made since the assessee could not substantiate the purchases made from an entity namely Global Trade Impex who was found to be suspicious / hawala dealers by Sales Tax Authorities, Maharashtra....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s the fact that the assessee is developing a plot of land wherein some of the shops have been allocated for free to the original owners and the assessee was only supposed to develop the same. If the expenditure is not reduced from the calculation of the closing stock, it would definitely lead to inflated gross profit for the assessee and would not give a true picture of the affairs of the business. I agree with the contention of the appellant that once the land which has been procured for free and has not been considered by the appellant while computing the total cost incurred for the project, then there is no question of considering it as closing stock value. Further the arguments advanced by the appellant as supported by the decision of t....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the same without actual consumption of material. Therefore, we find no infirmity in the stand of lower authority in this regard. Moreover, the issue has already been dealt with by this Tribunal in assessee's appeal wherein the estimation has been found to be reasonable. Ground Numbers 1 & 2 stands dismissed. 6. So far as the disallowance on account of Sales promotion Expenses is concerned, we find that the assessee has miserably failed to substantiate the expenditure with supporting vouchers / documents and all the expenditure was in cash. The complete onus, in this regard, was on assessee which he has failed to discharge. Therefore, the addition to the extent of 20% of expenditure in question i.e. Rs. 5,98,650/- stand confirmed by us. ....