TaxTMI 
TaxTMI 
2017 (8) TMI 1583
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....ay in filing the appeal should be worked out appeal-wise and each day of delay in filing the appeal should be explained by the assessee. The Assessee filed the petition for condonation of delay in filing the all cross objections, that is, CO. Nos. 70 to 74 /Kol/2016 for A.Y. 2005-06 to 200910, stating that there was delay of 498 days in filing the appeal. In all the assessment years, the assessee worked out the delay of 498 days in filing the cross objection, and stated the reasons of delay in para 6 of the petition, as follows: "6 That there is a delay of 498 days which was due to the ignorance and mistake of the accountant as after CIT(A)`s appeal order no demand left and which may kindly be condoned considering the present legal position." We are of the view that because of the mistake committed by the accountant, the assessee should not suffer. It was the mistake of the accountant for each day, because after getting the order of CIT(A), he thought that there is no demand left and the assessee company is not liable to pay any demand therefore he did not take care to remind the responsible person of the company to file the cross objection. We find it sufficient ....
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....ed assessment even in the cases where nothing incriminating document was found in the course of search. The provisions of Sec.153A neither empowers the A.O. to re-assess income of the completed assessment without having any seized material or asset to that effect nor does it allow the A.O. to review the assessment already completed. As such, the addition made in the order U/s 153A/143(3) is bad in law and need to be deleted." 2.That the Cross Objector craves leave to add, alter, amend or withdraw any grounds of cross objection before or at the time of hearing." 5. Although, in the appeals filed by the Revenue and CO. filed by the Assessee, we notice that there are a multiple grounds of appeals on merits, but at the time of hearing the main grievance of the Revenue and Assessee have been confined as follows :- The AO passed order u/s.153A, when the original assessment was not abated. Since the assessment was admittedly not pending before the AO as on date of search. Therefore, according to Cross objections of Assessee, there were no any incriminating materials found in search, hence no addition can be made. Whereas as per Revenue there were incriminating documents fou....
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....e year in which search & seizure was conducted. In response to the said notice the assessee has filed the return for assessment year 2005-06 on 04.04.2012 declaring total income of Rs.NIL whereas the original return for this year was filed 28.10.2005, u/s. 139(1) of I.T. Act, 1961 declaring total income of Rs. NIL. Then the notice u/s 143(2) of Income Tax Act, 1961 issued and served upon the assessee to assess the case u/s.153A/143(3)of Income Tax Act, 1961. During the assessment proceedings various queries were made by AO, vide notice u/s. 142(1) of I.T. Act, 1961. During the course of search & seizure several books of accounts, other documentary evidences were inventoried and seized /impounded (where survey has been carried out) from various spots/places under the assessee like head office, registered office, gardens etc. Those were verified and compared with reference to the regular books of accounts of the assessee. After comparing the entries available on the seized papers and within the soft copies, different queries were raised from time to time, which were explained by the assessee in respect of its regular returned income. But, in some occasions the assessee has failed to ....
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....was palpable from the relevant portion of the statements given by the suppliers/contractors either in survey u/s.133A or search u/s.132 of I.T. Act,196l. 5.4 The Assessing officer noted that all the persons who lead the warren Tea Group, that is, Pankaj Bagaria, Ramgopal Drolia, Pawan Kumar Goenka, Deepak Jhunjhunwala, Ram Avtar Mittal had retracted their statements recorded either U/s 132(4) or 133A or U/s 132(4) and 133A of the I.T.Act, through affidavits submitted with D.I.T. (Inv.) Kolkata within saven days of initiation of search and seizure and survey, ( in some places survey were conducted). But the said retraction was limited to the admission of providing accommodation entries through bogus biils without undertaking any real work and without supplying and material to the assessee company M/s Warren Tea Ltd. There was also denial of receiving of any commission in exchange of providing commission entries. The Warren Group is mainly engaged in the business of tea production and tea manufacturing. Besides, the group is also having other business activities like running of hotels, development of customized software and ERP systems and travel business etc. The main persons ....
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....rprises, Saket Drolia, proprietor of M/s S.B. Commercial Company, and Smt. Bela Drolia, proprietor of M/s Gopal Timber Trading Co.; statement of Shri Pawan Kumar Goenka, director of M/s P.M. Traders and Holdings Pvt. Ltd. and proprietor of M/s Asia Udyog, Smt. Madhu Goenka, the proprietor of M/s Goenka Industrial Corporation; statement of Shri Anurag Jlhunjhunwala director of M/s Reliable Infratech Developers Pvt. Ltd., Shri Sanjay Jhunjhunwala director of M/s Goldburn Delcom Pvt. Ltd. and Shri Deepak Jlrunjhunwala CEO of M/s Reliable Infratech Developers Pvt. Ltd, and M/s Goldlburn Delcom Pvt. Ltd. were recorded u/s 132(4)/133A/131 of the Act on 28.01.2011 and later on. Further, in the case of Shri Vikash Kasera, proprietor of M/s Metropolitan Transport Company, though no search or survey operation was conducted but his statement was recorded u/s 131 of the Act on 01.04.2011. As per the assessment order, all of above mentioned persons in their statements had confessed that they had not done any actual business transactions of rendering services, supply of goods and materials and execution of work capital in nature for/with the assessee company and that they all had provided accomm....
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....e manner in which they were tortured at their own business premises/houses and they were also asked to explain that as to why witnesses present at the time of search/survey operation did not become party to get the affidavit signed from a notary. The clarification was also sought from the said persons that as why none of them had filed any FIR against the departmental personnel who really forced them to sign the statement and tortured. As per the AO, the replies of the persons were received and placed on record but none of the replies had been found satisfactory and to the point. The AO was of the opinion that non filing of any FIR to the local police station against torture and coercion to sign statement prepared with preconceived notion but filing of affidavits only with the Department to withdraw the stated part which affects adversely to the assessee company out of entire statement through a common notary creates doubt over the contention made by the assessee company. The AO has also mentioned that several show cause letters were issued to the assessee company about disallowing of the expenses on account of bogus claims and the notice u/s 131 of the Act were also issued to all ....
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.... the said retraction through affidavits was not supported with any corroborative materials like copy of FIR with local police station and most importantly affidavits were not signed by the witnesses present at the time of search or survey. Thus, the statements given by all the parties in the presence of witnesses on the date of search/survey may not be overruled by such an affidavit which was completely unilateral in nature. 5.8 Thereafter, the AO analyzed statements of various parties given by them in the course of search or survey u/s 132(4) or u/s 131 of the Act along with the statement of Shri Biswaiit Karmakar, Senior Manager (Finance & Accounts), Assam of the assessee company. At some places, the AO also mentioned that he conducted certain inquiries at personal level or through other officials of the department. According to him, the enquiries were conducted discreetly as the assessments in the cases of suppliers, transporters and contractors were not going on. With respect to M/s Aska Roadways Pvt. Ltd. and M/s Eastern Road Carrier Pvt. Ltd. whose one of the directors was Shri Ram Avtar Mittal, it has been mentioned by the AO that the copies of bills submitted by both the....
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....ent made to M/s Aska Roadways Pvt. Ltd. treating the same as not genuine. Similar view was taken by the AO in the case of M/s Metropolitan Transport Company ( Proprietor Mr. Vikash Kasera) and disallowed 50% of the claim at Rs. 26,07,100/- ( i.e. 50% of Rs. 52,14,200) and added to the total income of the assessee. Total of both the disallowances comes to Rs. 97,09,200/- ( Rs. 71,02,100 + Rs. 26,07,100). The year-wise total disallowance was being ascertained to compute the assessed income for each year on the basis of disallowance made through a common nature of order and then 40% of such composite income will be calculated to find out the central income for the purpose of income tax.Thus, the total disallowance for assessment year 200506 is being ascertained and then 40% of it will be computed to add directly with the computation of income of the assessee. This way, the 40% of the said disallowance of Rs. 97,09,200/- was at Rs. 38,83,680/- which was added by the AO in the returned income already assessed as per order passed U/s 143(3) of the Act on 18.12.2007. 6. Aggrieved by the assessment order passed by the AO, the assessee filed an appeal before the Commissioner of Income Ta....
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....e Apex court has observed in Pullengode Rubber Produce Co. Ltd. vs. State of Kerala, 91 ITR 18 (SC.) that an admission is an extremely important piece of evidence but it cannot be said to be conclusive. It is open to the person who made the admission to show that it was incorrect. The CIT(A) further cited the following judgments: (a) In the case of Pushpa Vihar Vs. ACIT, 48 TTJ 389 (Bom), the Hon'ble Tribunal held as under: "Mere admission can not bedrock or foundation of an assessment. It is always open to the assessee who made the admission to show tthat what he admitted was not correct. Thus, it could be said that the admission made by a person is relevant in deciding the matter, but, it is not always conclusive. The person who admits a fact is at liberty to explain or clarify the circumstances and nature of statement and also correct facts. It is well settled that the effect of an alleged admission depends upon the circumstances in which it is made. Therefore, it can be said that an admission is the best evidence that revenue can rely upon and though not conclusive is decisive of the matter unless successfully withdrawn and proved erroneous." (b) In the cas....
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....ys Pvt. Ltd. was genuine business expenditure and such expenditure was very much required for internal transportation of goods and other things within the large area of gardens like the assessee company has. It was observed that the AO did not dispute the requirement of trucks for internal transportation and that the assessee company is required to incur such type of expenditure for the purpose of its business activities; because in the assessment order AO had mentioned that considering all aspect i.e. reality and necessity of using trucks within gardens of the assessee company in Assam, he disallowed 50% of total payment made to M/s Aska Roadways Pvt. Ltd. in each assessment year from A. Y. 2005-06 to 2010-11. The said ad-hoc disallowance had been made by him for the reason of absence of details of truck numbers and agreements and the manner in which bills were raised By Aska Roadways. The AO had also mentioned that the disallowance @ 50% was being made to keep judicious balance between the statements given by Shri Ram Avtar Mittal u/s 132(4) of the Act. In this manner, for the year under consideration, he made disallowance of Rs,46,09,600/-. The CIT (A) deleted the addition stati....
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....ot supported by any corroborative evidence. The assessee has relied on the following judgments and instruction of CBDT, wherein it was held that addition can not be made merely based on the statements: (i).Taxmann - Instruction: F. No.286/2/2003-IT(INV.II) Instances have come to the notice of the Board where assessees have claimed that they have been forced to confess the undisclosed income during the course of the search & seizure and survey operations. Such confessions, if not based upon credible evidence, are later retracted by the concerned assessees while filing returns of income. In these circumstances, such confessions during the course of search & seizure and survey operations do not serve any useful purpose. It is, therefore, advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income-tax Department. Similarly, while recording statement during the course of search & seizure and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed advers....
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....or the reason that the officer is not authorised to administer oath and to take any sworn statement which alone has evidentiary value as contemplated under law, vide Paul Mathews and Sons. V. CIT [2003] 263 ITR 101(Ker.); (iii).The expression "such other materials or information as are available with the Assessing Officer" contained in section 158BB of the IT Act, 1961 would include the materials gathered during the survey operation u/s 133A, vide CIT v. G. K. Senniappan [2006] 284 ITR 220 (Mad.); (iv).The material or information found in the course of survey proceeding could not be a basis for making any addition in the block assessment, vide decision of this court in T.C(A) No.2620 (between CIT v. S. Ajit Kumar[2008] 300ITR 152 (Mad.); (v) Finally, the word "any" used in section 133A(3)(iii) of the Act, viz., "record the statement of any person which may be useful for or relevant to, any proceeding under this Act", as already extracted above, makes it clear that the materials collected and the statement recorded during the survey u/s133A are not conclusive piece of evidence by itself. For all these reasons, particularly, when the Commissioner a....
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....us, detection or the existence of incriminating material is a must for disturbing the assessment already made and concluded. (iii). [2016] 73 taxmann.com 149(Calcutta) CIT vs. Veerprabhu Marketing Ltd. 6.Mr. Nizamudding, ld. Advocate, appearing for the revenue-appellant submitted that it is true that section 153A proceeds on the basis of search u/s132 or requisition u/s132A. There is no reverence to any survey u/s133A. He, therefore, did not dispute the submission made by Mr. Jain that power u/s153C read with section 153A could only have been exercised in the case of a search and requisition. He, however, added that there was, in fact, a search as also a requisition. He submitted that there has been survey in addition thereto. Therefore, it cannot be said that exercise of power was bad. Admittedly, there was search as also requisition. 7.With respect to the second submission advanced by Mr. Jain, we called upon Mr. Nizamuddin in vain to show us the incriminating material, if any, found either during the search or during the requisition or even during the survey which is or may be relatable to the assessee. Mr. Nizamudding as unable to show ....
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....ements recorded under section 132(4) and statements recorded during survey, then the assessee should have been provided with an opportunity to cross-examine the witnesses and without doing so, the statements recorded u/s132(4) and during survey is fragile for violation of natural justice and cannot be the sole basis for making additions. When we discard the statements recorded u/s.132(4) and statements recorded during survey, there is no other relevant evidence or material to corroborate the allegations made during the statements recorded u/s.132(4) and during survey. When there is no material at all to support the impugned additions, the statements recorded u/s.132(4) and survey cannot be treated as incriminating materials in the facts and circumstances of the case. In the light of the aforesaid facts and circumstances, therefore, for Assessment Year 2005-06 and 2009-10 which were not pending on the date of search, no additions can be made without incriminating materials as held by the Hon'ble Delhi High Court in the case of CIT, Central-III Vs. Kabul Chawla which has been upheld by the Hon'ble Kolkata High Court in ITA no.661 of 2008 CIT Vs. Veerprabhu Marketing Ltd. Therefore....
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....ment shall be made separately for each AY on the basis of the findings of the search and any other material existing or brought on the record of the AO. vii. Completed assessments can be interfered with by the AO while making the assessment under Section 153 A only on the basis of some incriminating material unearthed during the course of property discovered in the course of search which were not produced or not already disclosed or made known in the course of original assessment. 9 The Hon'ble Jurisdictional Calcutta High Court in ITA No. 661 of 2008 Commissioner of Income Tax vs. Veerprabhu Marketing Ltd. has also held as under: "We agree with the view expressed by the Tribunal that incriminating material is pre-requisite before power could have been exercised u/s 153(C) r.w Section 153(A). In the case before us, the AO has made a disallowance of the expenditure, which was held disclosed, for one reason or the other, but such disallowances made by the AO were upheld by the LD.CIT(A) but the Ld. Tribunal deleted these disallowance. We find no infirmity in the aforesaid Act of the Ld. Tribunal. The appeal is, therefore, dismissed". The assessee sub....
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....t Corporation Addition on a/c of revenue expenditure of Rs. 2,32,02,000/- from purchase made from concerns controlled by Sri Pankaj Bagaria and Sri Ram Gopal Drolia Addition on a/c of capital expenditure of Rs. 29,72,645/- for purchase made from concerns controlled by Sri Pankaj Bagaria and Sri Ram Gopal Drolia x x 2009-10 76/Kol/2015 Addition on a/c of transport expenses of Rs. 74,50,440/- in r/o M/s Aska Roadways Pvt. Ltd. and M/s Metropolitan Transport Corporation Addition on a/c of purchase of organic manures of Rs. 1,75,45,129/- from M/s Asia Udyog Addition on a/c of purchase of organic manures of Rs. 1,75,32,753/- from M/s P.M.Traders x Addition on a/c of revenue expenditure of Rs. 4,53,01,292/- from concerns controlled by Sri Pankaj Bagaria and Sri Ram Gopal Drolia 10. The ld DR for the Revenue has reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. However before us he could not point out any incriminating materials unearthed during search which could have enabled him to make additions in non-pending assessment years. 11.In the light of ....
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....from M/s Asia Udyog without considering the facts that the assessee couldn't produce any agreement for purchasing of huge amount of organic manures and the addresses of the suppliers of the manures are fake. 3. That in the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition on account of purchase of organic manures amounting to Rs. 1,60,55,160/- from M/s P.M.Traders without considering the facts that the assessee couldn't produce any agreement for purchasing of huge amount of organic manures and the addresses of the suppliers of the manures are fake. 4. That in the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the disallowance u/s 14A to Rs. 1,466/- without considering the facts the assessee has hugely invested in shares during the year under consideration which has potential of earning exempt income. 5. That in the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition on account of revenue expenditure amounting to Rs. 8,29,62,211/- without considering the facts the that the bills raised by the business entities contr....
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....Rs. 21,10,070/- Addition on a/c of purchase of organic manures of Rs. 1,09,80,298/- from M/s Asia Udyog Addition on a/c of purchase of organic manures of Rs. 89,82,235/- from M/s P.M.Traders x addition on a/c of revenue expenditure of Rs. 4,35,84,350/- from concerns controlled by Sri Pankaj Bagaria and Sri Ram Gopal Drolia 14. It can be seen from the second proviso to Sec.153A(1) of the Act that any assessment proceedings for any of the six assessment years set out in Sec.153A (1) of the Act, which is pending as on the date of initiation of search u/s.132 of the Act, then such assessment proceedings would abate and the AO will make one assessment after considering the original return of income as well as materials found in the course of search. The assessment proceedings which have been completed as on the date of search u/s.132 of the Act will however continue to remain valid. Thus the former proceedings are referred to as "abated assessment proceedings" and the latter proceedings are referred to as "unabated assessment proceedings". First of all, the legal challenge by the assessee that in the abated proceedings also without incriminating material unearthed during ....
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.... really for the purpose of business. The AO also opined that the reality of expenses in respect of so called suppliers of goods and contractors shown accomplished the works was one of the vital factors due to confession of providing accommodation entries without having real business of them with the assessee company in exchange of commission at the time of search and survey, followed by retraction through affidavits. 17. As per the assessment order, para-16, the AO perused the purchase vouchers, bills, books of account and bank accounts of M/s Asia Udyog, Proprietor Shri Pawan Kumar Goenka along with the books of account of the assessee company. The substantial payments were made to M/s Asia Udyog for the A.Y 2009-10, 2010-11 and 2011-12 on account of purchase of organic, the assessee could not produce any requirements/indent sent/forwarded by the respective gardens to the Executive Director's office periodically. The assessee company also failed to provide any evidence of meeting held between Executive Director and Manager Agricultural to finalize any requirement of organic manures for the respective gardens and then forwarding the same to the Corporate Office at Kolkata as....
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....ereas the revenue expenses were claimed as such by debiting in the profit and loss account. As per the Assessing Officer both the groups had worked together for the assessee at several occasions as a substantial quantum of supply of materials/goods to the assessee claimed by any of the concerns managed by Shri Ram Gopal Drolia, debited as expenditure in the books of account of the assessee either as revenue expenditure or capital expenditure claiming depreciation under the head Buildings, Roads and Bridges within fixed assets had been routed through various concerns headed by Shri Pankaj Bagaria. That, in the course of search and survey operations, Shri Pankaj Bagaria three times at three different places had admitted of providing accommodation entries to the assessee company. There were no corresponding purchases to supply the goods to the assessee due to such accommodation entries provided in exchange of commission. It has been mentioned by the Assessing Officer that the said confession was also confirmed by Smt. Neema Bagaria, one of the Directors of M/s Prachi Commercial Pvt. Ltd., his wife Smt. Sunita Bagaria and his mother Smt. Pushpa Bagaria, director of M/s Kalinga Commerci....
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.... disallowance of capital expenditure is concerned, the AO had disallowed the depreciation of the above mentioned amounts in the respective assessment years. 20. Similarly, for the same reasons as mentioned above, in respect of business concerns controlled by Shri Ram Gopal Drolia, Viz; Durga Enterprises, proprietor Ram Gopal Drolia (HUF), Gopal Timber Trading Company, Proprietor Bela Drolia, S.B. Commercial Company, Proprietor Saket Drolia, Dholisati Business Pvt. Ltd. and Ram Gopal Drolia (Individual), the AO disallowed capital expenditure of Rs. 2,19,84,710/- and revenue expenditure of Rs. 2,79,21,600/- in A.Y. 2006-07, capital expenditure of Rs. 2,78,53,063/- and revenue expenditure of Rs. 54,27,000/- in A.Y. 2007-08, capital expenditure of Rs. 2,97,26,450/- and revenue expenditure of Rs. 55,24,800/- in A.Y. 2008-09, capital expenditure of Rs. 4,10,86,815/- and revenue expenditure of Rs. 3,89,40,O32/- in A.Y. 2009-10, capital expenditure of Rs. 84,28,125/- and revenue expenditure of Rs. 4,30,45,561/- in A.Y. 2010-11 and capital expenditure of Rs. 1,65,62,471/- and revenue expenditure of Rs. 2,45,14,850/- in A.Y. 2011-12. As far as the disallowance of capital expenditure in va....
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.... and 2011-12. We shall discuss each ground of lead case for A.Y. 2010-11 as follows: 23.1 Addition on account of Transport expenses amounting to Rs. 1,50,69,900/- in respect of M/s Aska Roadways Pvt. Ltd. and M/s Metropolitan Transport Corporation 23.2 We had discussed the brief facts of this addition, in unabated assessments, that is, A.Y. 2005-06 to 2009-10. The findings of CIT(A) is also given in para 6 of this order. The CIT(A) observed that in the assessment proceedings it was contended by the assessee company that the entire claim of payment to Aska Roadways Pvt. Ltd. was genuine business expenditure and such expenditure was very much required for internal transportation of goods and other things within the large area of gardens like the assessee company has. It was observed that the AO did not dispute the requirement of trucks for internal transportation and that the assessee company is required to incur such type of expenditure for the purpose of its business activities; because in the assessment order AO had mentioned that considering all aspect i.e. reality and necessity of using trucks within gardens of the assessee company in Assam, he disallowed 50% of total paym....
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.... on the order passed by the Ld. CIT(A). The ld DR for the Revenue has fairly agreed with the order passed by the ld CIT(A). 23.4 We heard both the parties and perused the material available on record, we are of the view that addition made by AO was based on guess work and without bringing any cogent material on record. We have also noted the judgment of Hon`ble Supreme Court in DHAKESWARI COTTON MILLS LTD. vs. COMMISSIONER OF INCOME TAX, 26 ITR 775 (SC), wherein it was held that: "Though ITO is not restrained under s. 23(3) by technical rules of evidence and pleading but he cannot make an assessment on pure guess-work without reference to any material or evidence and assessee must be given an opportunity to rebut any material considered by the IT authorities." Therefore, we are of the view that the ITO in estimating the expenses on transportation, did not act on any material but acted on pure guess and suspicion and hence, we confirm the order passed by ld CIT(A). 23.5 In the result, the appeal filed by the Revenue ( on ground No.1), is dismissed. 24. Ground No. 2 raised by Revenue relates to addition on account of purchase of organic manures amounting to Rs. 2....
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....M. Traders. The ld DR for the Revenue has fairly agreed with the submissions of the Counsel. 24.3 Having heard the rival submissions, perused the material available on record, we are of the view that AO had made addition on account of supplies of goods by Asia Udyog and P.M. Traders based on statement recorded, which was, later on retracted. During the course of hearing, the books of accounts, bills, Vouchers, and other details were submitted and the AO did not find any mistake. Details of other parties who supplied the organic manures to the assessee were also submitted before the AO and the AO accepted them. We are of the view that the said additions are purely on guess and surmise and ld CIT(A) had rightly deleted the addition, therefore, we confirm the order passed by ld CIT(A). 25. Ground No. 4 raised by the Revenue relates Section 14A disallowance. As per Revenue the Ld. CIT(A) had erred in restricting the disallowance u/s 14A to Rs. 1,466/- without considering the facts the assesse. 25.1 The brief facts qua the issue are that the assessee company has claimed exempted income and for which interest amount has been debited in the profit and Loss account. The assessee s....
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.... raised by the Revenue relates to the addition on account of capital expenditure amounting to Rs. 58,76,604/-. 26.1 The solitary grievance of the Revenue in ground No. 5 and 6 is that the bills raised by the business entities controlled by Sri Pankaj Bagaria and Sri Ram Gopal Drolia in respect of said expenditure ( capital & Revenue) are bogus and companies are not functioning in real life. Therefore, the revenue expenses Rs. 8,29,62,211/- and capital expenses Rs. 58,76,604/- are bogus expenses. The AO held that Sri Pankaj Bagaria and Sri Ram Gopal Drolia, used to issue the bogus bills and they used to provide the accommodation entries to the assessee company. The AO noted Sri Pankaj Bagaria during the course of survey had admitted that he had given accommodation entries of about Rs. 20 Crores to the assessee company and there was no corresponding purchases to supply the goods to the assessee due to such accommodation entries provided in exchange of commission. But later on Sri Pankaj Bagaria and Sri Ram Gopal Drolia, retracted their statements within seven days of initiation of search. The AO also held that assessee did not mention these purchases in the stock register, therefo....
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..... Ground No.7 raised by the Revenue relates to the issue that in the facts and circumstances of the case and in law, the Ld. CIT(A)'s observation is not based on facts or documentary evidences and he also ignored the facts that the no store register or store ledger was found at respective gardens which could establish that the goods sent from the head office as per bills or the material required to accomplish the work which was against the prevailing system of the company as per agreement given by Mr. Bishwajit karmakar ( Senior manager of M/s Warren Tea; Assam) and he has not retracted his statement. 27.1 This ground relates to general allegations imposed by the Revenue on the ld CIT(A), which we have already discussed in this order. The main allegation of the Revenue in this ground is that no store register or store ledger was found at respective gardens which could establish that the goods sent from the head office as per bills or the material required to accomplish the work. We are of the view that since the assessee has produced all books of accounts and stock register is part of books of accounts and AO had failed to bring any mistake on the record. Besides, in this or....