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2020 (5) TMI 513
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....ent proceedings, the notices issued by the AO u/s 133(6) of the Income Tax Act, 1961 have been returned back with the remarks that no such entity exists. Based on the revisit of the notices, the Assessing Officer made addition of Rs. 87,95,000/- being 20% of the purchases of Rs. 4,39,75,000/- from one entity namely, M/s Vaibhav Coal Movers owing to non-substantiation of the purchases made. After passing of the assessment order, the Assessing Officer received information regarding the said purchases along with bank statements based on which the Assessing Officer passed an order of rectification u/s 154. Vide rectification order u/s 154, dated 19.05.2014, the AO has brought to tax the entire amount of purchases of Rs. 4,39,75,000/- made from M/s Vaibhav Coal Movers. 4. Aggrieved, the assessee field appeal before the ld. CIT (A) on the grounds that the action of the Assessing Officer is beyond the scope of powers for rectification u/s 154. 5. The ld. CIT (A) deleted the addition made u/s 154 on the grounds that the Assessing Officer has failed to accord an opportunity while enhancing the assessed income and the order suffers from severe infirmity of denial of natural justice. ....
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....this amount withdrawn from bank and was returned to the assessee company. The relevant details of bank account in both the companies are reproduced hereunder: Sl. No. Date Name Deposit (Amount in Rs.) Cash withdrawal from bank Vijeta Coal Traders 1. 21.07.2010 Vaibhal Coal 6,00,000 6,00,000 2. 21.07.2010 Vaibhal Coal 5,64,863 5,64,863 3. 28.07.2010 Vaibhal Coal 7,00,000 4. 28.07.2010 Vaibhal Coal 6,00,000 5. 29.07.2010 Vaibhal Coal 7,00,000 6. 29.07.2010 Vaibhal Coal 6,00,000 7. 07.08.2010 Vaibhal Coal 5,57,242 8. 09.08.2010 Vaibhal Coal 5,57,200 9. 14.08.2010 Vaibhal Coal 8,00,000 10. 20.10.2010 Vaibhal Coal 9,50,000 11. 20.10.2010 Vaibhal Coal 9,50,000 12. 21.10.2010 Mughal sarai 7,00,000 13. 21.10.2010 Mughal sarai 6,43,270 14 30.10.2010 Vaibhal Coal 8,52,381 15. 01.11.2010 Mughal Sarai 8,52,381 16 18.11.2010 Vaibhal Coal 10,11,640 &nbs....
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.... find out the real nature of the transaction. (ii) The Hon'ble ITAT, Delhi has held in the case of Harsh V. Cbaddha legal heir of Late W.N. Chaddha Vs. DDIT (Intl. Tax), 135 TTJ 513, that the tax liability in the case of suspicious transactions is to be assessed on the basis of tire material available on record, surrounding circumstances, human conduct, preponderance of probability and nature of incriminating information / evidence. (iii) The Hon'ble Supreme Court held in the case of Sutlej Cotton Mills Ltd. Vs. CIT, 116 ITR 1, that the way in which the entries are made by an assessee in his books of accounts is not determinative of the question whether the assessee has earned any profit or suffered any loss, but what is necessary to be considered is the true nature of the transactions. Perusal of above and other judicial decision so that the assessee has been avoiding to reveal true nature of its transactions and transactions were definitely in the nature of suspicious transactions. The material available on records, human conduct preponderance of probability clearly prove that the assessee company has claimed excessive/bogus expenses on account ....
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.... a refund or otherwise increasing the liability of the assessee [or the deductor] [or the collector], shall not be made under this section unless the authority concerned has given notice to the assessee [or the deductor] [or the collector] of its intention so to do and has allowed the assessee [or the deductor] [or the collector] a reasonable opportunity of being heard. (4) Where an amendment is made under this section, an order shall be passed in writing by the income-tax authority concerned. 71[(5) Where any such amendment has the effect of reducing the assessment or otherwise reducing the liability of the assessee or the deductor 72[or the collector], the Assessing Officer shall make any refund which may be due to such assessee or the deductor 72[or the collector].] (6) Where any such amendment has the effect of enhancing the assessment73 or reducing a refund 74[already made or otherwise increasing the liability of the assessee or the deductor 75[or the collector], the Assessing Officer shall serve on the assessee or the deductor 75[or the collector], as the case may be] a notice of demand in the prescribed form specifying the sum payable76, and such n....
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....ptivating a decision. It is the sum of the whole evidence that has gone into the mind of the Assessing Officer to take a decision. The record for income tax purpose is the record of the assessee only but not the record of any other entity unless it is made a part of the record of the assessee in the proceedings relevant to which such record of the other persons has been obtained. The record for the income tax proceedings and for the purpose of Section 154 is the entire proceedings, order sheets, notices, documents, materials collected by the revenue, replies produced by the parties, result of the direct and collateral enquiries conducted by the authorities which are available at the time of passing of the order which is the subject matter proceeding for rectification. 14. Apparent from record signifies, a mistake which is obvious, patent and discernable from the record available which is a subject matter of rectification. Any debatable point cannot be considered as a mistake apparent from record. The word "apparent mistake" denotes an obvious, plain, evident, noticeable or visible error. An apparent mistake is glaring, obvious, self-evident and should be free from debate. 15.....
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....s and plaster and repair of flooring. The other expenditure involves purchase of Fuji filter, which is an imported filter membrane and is frequently required to be replaced in the chamber during the production process. It was also informed that in the earlier assessment years 2006-07 also, this particular part was considered by the AO as a capital expenditure, however, on appeal , the ITAT considered the same as a consumable item and additions on this account were deleted. It was submitted that though the AO had al lowed the cost of the material purchased (Fuji Filter) of Rs. 1,98,795/- but has disallowed the custom duty paid of Rs. 52,909/- on the import of (fuji filter). Further, the additions of Rs. 2,14,720/- was made on ad-hoc basis which was infact replacement of parts of the existing machinery and allowable as repairs to machinery. On perusal of assessment order, we also find that the Assessing Officer has given no reason for disallowance of Rs. 2,14,720/-. The bills have been short listed only an amount of Rs. 5,18,000/-. The short listed bills also consist of bills for repairs, replacement of parts, custom duty, flooring and plaster. Keeping in view the nature of the ex....
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...., and accordingly held that the assessee had used this modus operandi i for reducing its profits. Accordingly, applying the decision of Hon'ble Supreme Court in the case of CIT vs. Smt. Sumati Dayal, 214 ITR 801 (SC), the AO disallowed the excess payment of Rs. 2650 PMT (Rs. 7650-4000 PMT) paid in respect of purchases made from M/s Vaibhav Coal Movers and accordingly, made an addition in respect of purchases amounting to Rs. 3,24,54,139/- u/s 69C. 24. Heard the arguments of both the parties and perused the material available on record. 25. The reason for the disallowance is that the assessee is paying higher amount for purchase of coal from M/s Vaibhav Coal Movers (VCM) of Rs. 7,600/- per metric ton (PMT) whereas the VCM in turn procuring the coal from Aditi Enterprises and Other affiliated dealers @ Rs. 4,000 PMT. The supply of the coal per se has not been in dispute. The assessee has entered into an agreement with VCM for supply of coal at Rs. 7,650 PMT. The agreement is inclusive of al l indirect expenses, labour cost, loading unloading cost, transportation from mining area to the factory premises. The sales tax and the octrai payments are to be borne by VCM as per the....