TaxTMI 
TaxTMI 
2020 (3) TMI 686
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....ner of Income Tax (Appeals) erred in holding that addition on account of peak credit is also upheld. 4. The learned Commissioner of Income Tax (Appeals) failed to appreciate that the alleged transactions with three parties were mere book entries and were not supported by movement of goods nor of funds and therefore the same cannot be treated as income. 5. The appellant prays that: i) Addition of Rs. 13,02,88,386/- may be deleted; ii) Proceedings for recovery of disputed demand may be stayed till hearing and final disposal of the appeal; iii) The appeal may be fixed for out of turn hearing; iv) Any other relief your Honours may deem fit. 1.2 The Ld. Authorized Representative for Assessee (AR), vide letter dated 07/02/2020, filed additional ground of appeal which read as under:- The learned CIT(A) ought to have held that the addition made by the Assessing Officer in respect of peak credit is beyond the scope of reassessment and hence, unsustainable. The Ld. AR pleaded for admission of the same by submitting that the adjudication of the said ground does not require appreciation of new facts and raises pure question o....
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....me of the Parties Amount of Purchases (Rs.) AY 1. Saileela Trading Pvt. Ltd. 1271.20 Lacs 2010-11 2. Niddish Impex Pvt. Ltd 157.45 Lacs 2010-11 3. Tulsiani Trading Pvt. Ltd. 117.95 Lacs 2010-11 4. Prateek Enterprises 1.02 Lacs 2010-11 5. H.S.Trading Co. 0.29 Lacs 2010-11 6. Shri Vallabh Traders 0.93 Lacs 2011-12 Total 1548.84 Lacs These 6 concerns were stated to be figuring in the list of entities which were proclaimed by the Sales Tax Department as providers of accommodation bill and their names featured in the list of hawala / suspicious dealers as enlisted by the Maharashtra Sales tax Department. 2.4 During survey proceedings, the statement of one of the directors of the assessee company, Shri Samir Ashwin Sagar, was recorded. The relevant portions of the statements have already been extracted on page nos. 4 to 6 of the quantum assessment order. The said director admitted that bullion was purchased from entities listed at serial nos. 1 to 3 whereas packing material was purchased from the other 3 entities. In response to question nos. 46 & 51, it was admitted that the bil....
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.... assessee but only supplied bills. In the above background, Ld. AO show-caused the assessee to make disallowance of these purchases. 2.7 In response, the assessee submitted documentary evidences such as stock register, purchase bills, sales bill, ledger extracts etc. However, the assessee failed to produce any of the parties for verification of the transactions. 2.8 Vide submissions dated 26/03/2015, the assessee inter-alia, submitted that due to tension and anxiety, it remained to be brought to the notice that purchases to the extent of Rs. 1163.89 Lacs were reversed in books of accounts in subsequent financial year by issuing sales bills to same 3 entities. The details of the purported sale have already been extracted on page nos. 7 & 8 of the quantum assessment order. Therefore, it was submitted that net purchases made from the said parties would be as follows: - No. Name of the Parties Total Purchases (Rs.) Less Transactions Reversed Net Purchases made from the said parties 1. Saileela Trading Pvt. Ltd. 12,71,20,169/- 8,88,48,169/- 3,82,72,000/- 2. Niddish Impex Pvt. Ltd 1,57,45,395/- 1,57,45,395/- Nil 3. Tulsiani Trading....
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....essee has taken accommodation entries from these bogus parties. What is likely that assessee is rotating its funds in the business and the peak theory needs to be applied to work out the unexplained investment u/s 69C of the Income Tax Act, 1961. 2.12 The Peak calculation was made on the following basis: - (i) Cash has been paid on the date on which the bogus purchase bill has been entered in the books of account. (ii) Cash has been received back by the assessee on the date on which the cheque has been issued by it to the bogus parties. (iii) Ledger account of all the 6 parties have been merged to work out the actual cash receipt or payment made by the assessee on day to day basis. Accordingly, Ld.AO worked out incremental credit to the extent of Rs. 1302.88 Lacs and disallowed the same u/s 69C. 3.1 Before Ld. CIT(A), the assessee assailed the stand of Ld. AO by way of elaborate submissions but the same could not find favor with Ld. CIT(A). The Ld. CIT(A) summarily rejected the retraction of statement made by one person by another person. 3.2 During the course of appellate proceedings, remand proceedings were initiated which was duly confronte....
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....la Trading Pvt.Ltd., Pratik enterprises, HS trading co., shri vallabh traders. The total purchases made from these parties was computed at Rs. 15,47,93,006/- for A.Y, 2010-11 and Rs. 93,499/- for A.Y. 2011-12. The assessee has admitted Rs. 12,07,93,006/- for A.Y, 2010-11 and Rs. 93,499/- for A.Y. 2011-12 as unaccounted income. 4. During the course of the survey on 13.12.2012 Shri Samir Ashwin Sagar, director of assessee company deposed voluntarily under oath confirming the figures of bogus purchases by the assessee totaling to Rs. 12,08,86,505/- for various years as mentioned above in answer to query no.54 in his statement. 5.There is no doubt whatsoever that by booking bogus purchase in excess of Rs. 12.07 crore during the F.Y.2009-10 as mentioned above, assessee has inflated its expenses and has shown less Income in return of income. 6. In view of the foregoing discussion, I am satisfied that it is a fit case for re-opening of assessment u/s 147 of the Act as the income chargeable to tax has escaped assessment for A.Y. 2020-11. After going through the contents of quantum assessment order vis-à-vis recorded reasons, we find that the qu....
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....raised by Ld. AR and hence, decline to accept the same. The additional ground raised by the assessee stands dismissed. Adjudication on Merits 5.1 So far as the merits of the case are concerned, the conclusion of Ld. CIT(A) in rejecting the plea of retractation of a statement of a particular person by another person would require no interference on our part since the retraction, in our opinion, should be by the same particular person only, who made the statement. Therefore, the retraction has rightly been disregarded, for all purposes. 5.2 At the same time, additions merely on the basis of statements made during survey proceedings u/s 133A would not hold much evidentiary value unless the same were backed up by some cogent corroborative material. For the same, we draw strength from the decision of Hon'ble Supreme Court in CIT V/s S.Khader Khan & Sons (35 Taxmann.com 413). We find that the additions as made by Ld. AO primarily stem out of the statement made by the director of the assessee coupled with information from Sales Tax Department that the assessee obtained bogus purchase bills from certain entities. 5.3 Proceeding further, it is noted that additions have been made....