TaxTMI 
TaxTMI 
2020 (6) TMI 694
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....e addition by AO of Rs. 55,69,337 on account of commission/min guarantee. 4. That the CIT (A) erred on facts and in law in confirming the addition by AO of Rs. 2,39,210/- on account of advertisement expense and Rs. 3,06,885/- on account of other expenses. 5. That the CIT(A) erred on facts and in law in confirming the action of the assessing officer in this regard without considering the contemporaneous/circumstantial evidence furnished by the appellant and without appreciating that the transactions were supported by proper details/ documents /vouchers." 3. The return of income was filed on 28.09.2011 with an income of Rs. 4,36,460/-. The case was taken up for assessment u/s 143(3) of the Income Tax Act, 1961 and the case was adjourned at the request of the assessee. Later, several opportunities were provided on 15.07.2013, 14.08.2013, 17.09.2013, 28.10.2013, 09.01.2014 and 03.12.2014. Owing to non-submission of any details and compliance, the Assessing Officer completed the proceedings determining the total income at Rs. 3,94,12,151/- on 18.02.2014. 4. The assessee filed appeal before the ld. CIT (A) on 19.03.2014 who has completed the proceedings on 01.02.2....
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....and is submitted. From which it cannot be arrived at that the gift was given to the assessee or not. No any occasion of gift is explained by the assessee. Assessee was asked to produce the above three persons. In response only Sh. Ranbir Singh father of the assessee attended and his statement was recorded Placed on record) and he produced copy of his salary bank account and stated that he has given cash gift out of his GPF withdrawal and payment received from his office. When asked about the occasion of gift he stated that gift was given for the birthday of his grandsons i.e. children of the assessee. But when asked about the date of birthday. He stated that birthday of the children are in the month of May and July. But the date of withdrawal of amount from his account is in the month of January. Hence no any proof of gift/source of addition of capital of Rs. 45,00,000/- is submitted by the assessee and the same stands unexplained." b) In report-2, dated 17.12.2015 on this issue the Assessing Officer furnished no further comments but reiterated the comments earlier submitted vide report datedm17.12.2015. c) In report-3, dated 27.05.2016 it was reported th....
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....uction of new capital amounting Rs. 49,55,216/-. During Remand Proceedings, documents relating to addition in capital through gifts from relatives have been filed with Ld. AO and it has been submitted before AO that part, of addition was on account of gift from Mr. Sushi! Kumar, asses see's husband amounting Rs. 2,50,000/-, Sh Telu Ram, Assessee's Father-In-Law amounting Rs. 12,50,000/- and Sh. Rajbir Singh, assessee's Father amounting Rs. 4,50,000/- for which confirmation were submitted with Ld. AO Sh. Rajbir Singh Father of assessee visited the office of Ld. AO and recorded his statement and the same has been taken on record by Ld. AO in remand report dated 15.07.2015. Sh. Telu Ram visited the office of Ld. AO three times on 16.05.2016, 19.05.2016 and 23.05.2016. Despite being not carrying good health (As he is more than 80 years of age) his statement was not been recorded in first two visits. In his statement he has confirmed that he had gifted Rs. 12,50,000/- for supporting the business vide Rs, 3,00,000/- from bank and Rs. 9,50,000/- in cash. Sh. Telu Ram repeatedly told to Id. AO that the total family expenses as on date are apr....
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....ce of fund of the donor. I have considered the factual metrics and find that it is not important for the donor to remember the dates particularly when the source of fund has been fully explained. The gift from such close relative has to be accepted. iii. Gift from Father - in - law: It has been reported by the Assessing Officer that the statement of this person was recorded where he admitted that total earning per annum from the agricultural income is about Rs. 8.00 lakhs only. Even in this income, there is a component of lease rent received which could not be proved in the course of remand proceedings. The total income as claimed above has not be substantiated in the statement. Further, it has been stated that gift to the appellant has been given from two sources, one is out of Bank Account from where Rs. 3 lacs were withdrawn and the remaining amount of Rs. 9.5 lacs has been given from the agricultural income. Even though the Assessing Officer has proposed that nothing could be substantiated but I find that the Assessing Officer did not conduct further enquiries in respect of gift made out of bank balance to the extent of Rs. 3.00 lacs. It has been specifically stated th....
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....proceedings when no explanation was filed. 6.1. In the appeal proceedings, the appellant has given additional evidence explaining the source of loans as below: (a) PNB CCA/c Rs. 74,34,788/- (b) Andhra Bank Rs. 28,60,136/- (c) Security Deposit from Dealers Rs. 1,07,00,000/- Total Rs. 2,09,94,924/- 6.2. Remand Reports: The Assessing Officer has examined the additional evidence and contentions of the appellant. After due consideration submitted the following reports: a) In report-1, dated 30.06.2015 the following was reported that: As per Balance Sheet assessee has shown liability of Rs. 1, 07,00,000/- on account of security deposit. During remand proceedings also assessee only submitted copy of agreement with many parties from which it is not clear that the actually the transaction have taken place or not. Though asked specifically assessee has not given any detail/proof/bank account statement etc. in this regard. Hence additional evidence towards addition of Rs. 1,07,00,000/- on account of liabilities stands unexplained. 5. As per Balance Sheet assessee has raised loam through banks of Rs. 1,07,0....
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.... 8. M/S Paul Brothers 308 dt. 25.04.2016 4,00,000 - Received unserved as no such Firm. 9. M/S Jai Garments 307 dt. 25.04.2016 3,00,000 - 10. M/S Giriraj Fashion House 306 dt. 25.04.2016 4,00,000 - 11. M/S Singh's Collection 305 dt. 25.04.2016 3,00,000 - Received unserved as no such Firm. 12. M/s Shakti Sales 304 dt. 25.04.2016 1,25,000 -do- 13. M/s Anil Dahiya HUF 303 dt. 25.04.2016 2,00,000 - 14. M/s Ambika Garments 302 dt. 25.04.2016 5,00,000 - Received unserved as unclaimed 15. M/s Singla Collection 301 dt. 25.04.2016 1,20,000 NIL 16. M/S Sahid Kid Point 300 dt. 25.04.2016 1,50,000 Received unserved as no such Firm. 17. M/S Rama Store 299 dt. 25.04.2016 5,00,000 - 18. M/S New Style Apparels Prop. Ram Kumar Duhan 298 dt. 25.04.2016 5,00,000 5,00,000 19. M/S Malik & Sons 297 dt. 25.04.2016 5,00,000 5,00,000 20. M/S Vidhi Fashion 296 dt. 25.04.2016 5,00,000 5,00,000 21. Sh. Da....
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.... not intimated their names in the list of persons from whom they have received securities. Keeping in view the above facts, the matter may kindly be decided on merits. 6.3 Response of the appellant: All the above reports were given to the appellant and finally a written submission was filed on her behalf on wherein the following was submitted: 3. The AO has erred on facts and in law while making addition on account of Secured and Unsecured Loans. That Details of Secured and Unsecured Loans are as below: (a) PNB CCA/c Rs. 74,34,788/- (b) Andhra Bank Rs. 28,60,136/- (c) Security Deposit from Dealers Rs. 1,07,00,000/- Total Rs. 2,09,94,924/- Secured Loans During Remand Proceedings, Bank Statements from Punjab National Bank and Andhra Bank was called for by Hon'ble Assessing Officer (here-in-after called AO) which revealed that your appellant was liable to pay to Punjab National Bank Rs. 74,34,788/- and to Andhra Bank Rs. 28,60,136/-. The above fact has been confirmed by Ld. AO in 1st Remand Report dated 15.07.2015. Security Deposits The security deposits from dealers are basically the d....
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..../c Rs. 74,34,788/- and Andhra Bank Rs. 28,60,136/- as explained which leaves behind the component of addition pertaining to "Security Deposit from Dealers" to the extent of Rs. 1,07,00,000/-, 6.4.1. In the remand proceedings, the Assessing Officer conducted complete enquiries about Security Deposit from Dealers of Rs. 1,07,00,000/- and after such enquiry came to a conclusion that the following deposits have been confirmed: S. No. S. No. of Remand report Name Amount 1 1 M/s Aeri Apparel Inc. 20,00,000/- 2 18 M/s New Style Apparels Prop. Ram Kumar Duhan 5,00,000/- 3 19 M/s Malik & Sons 5,00,000/- 4 20 M/s Vidbi Fashion 5,00,000/- It is also reported that in respect of some other persons there is a discrepancy in the figures reported by the respective parties and further some of the parties confirmed certain balances despite the fact that no notice under section 133(6) of Income Tax Act was issued to such persons. 1 am in agreement with the Assessing Officer that these confirmations do not inspire confidence, particularly in view of the fact that the appellant has not discharged initial onus of producing the....
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.... Based on the additional evidences filed, enquiries were conducted during the appellate proceedings also by the ld. CIT (A) which could not lead to any substantiation of existence of sundry creditors. Owing to such enquiry, only three creditors have given their confirmation. The details of three parties are as under: (page no. 22 para 8.5.1) Sl. No. Name Amount (i) Gujarat Cott. Fab 3,80,826/- (ii) Santosh Fine Fab Ltd. 7,18,428/- (iii) Ahmadabad Cotton Mfg Co. 1,56,470/- 12,55,724/- 16. The ld. CIT (A) confirmed the remaining amount owing to non substantiation of the amounts received. 17. We have gone through the order of the ld. CIT (A) in the rationale given while confirming the addition. We find that the ld. CIT (A) deleted the amount of Rs. 35,00,000/- based on three remand reports dated 30.06.2015, 17.12.2015 and 27.05.2016 from the Assessing Officer, the inputs of which is duly considered while adjudicating the issue. We have gone through the entire order in detail and find that the ld. CIT (A) has rightly given remission of Rs. 35,00,000/- and confirmed the amount of Rs. 72,00,000/-. For the sake of ready refe....
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....M/s Ruchi Enterprises 3. M/s S.R Enterprises and sought for adjournment and case was adjourned to 10.12.2015 with the directions that the further adjournment will be disallowed. On 10.12.2015 neither anybody attended the proceedings nor was any written submission received. Letters were issued for calling information u/s 133(6) of the I.T. Act, and confirmation of the balances to the following parties: S. No. Name of the party Letter/Dispatch No. Date 1. AERI Apparel Inc. 8367 08.12.2015 2. M/S Ruchi Enterprises 8373 -do- 3. M/S S.R. Enterprises 8374 -do- 4. M/s Gujarat Cotfab 8375 -do- 4. M/s Goyal Traders 8376 -do- 5. M/s Nirmal Textiles 8377 -do- 6. M/s Ahmadabad Cotton Mfg. Co. 8378 -do- 7. M/s Santosh Fine Fab Ltd. 8379 -do- No response from any of above said parties has been received till date. Therefore, it is clear that the transactions made by the assessee with above said parties are not genuine and claim of the assessee required not to be entertained. On 11.12.2015 again letter was sent to the assessee for submission of documentary....
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.... koi praptkarta nahi hai. 2 M/s S.R. Enterprises, 3085, Sunder Nagar, Near Bikaner Sweet, Ludhiana -141001. Support Address, No. Street No. 3 M/s Ruchi Enterprises, 88, 2 nd Caved Cross Lane, Room No. 14, Td Floor, Dadeseth Agiary Lane, Kalba Devi, Mumbai-2. Not Known 2. You are hereby given an opportunity to produce these persons in support of your claim. The case is fixed for hearing on 13.01.2017. In response nothing was submitted. 8.5 In order to give substantial justice to the appellant, this office in the course of appellate proceedings issued letters/ notice under section 133(6) of Income Tax Act to the following parties for confirmation of the credit amount. These notices remained un-served with the following remarks: i. Is nam ka koi praptkarta nahi hai. ii. Support Address, No street No. iii. Not known. It can be seen from the aforesaid, that the creditors of the appellant are not genuine and therefore the contention remains unsubstantiated. The appellant by order sheet dated 16.01.2017 was provided with an opportunity to produce the aforesaid 3 creditors but no such creditor was produced bef....
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.... para 9.4) "9.1 Additional evidence: In the appeal proceedings, the appellant has given additional evidence for explaining the contention that the said amount consists of "commission paid' amounting Rs. 16,01,337/- and minimum guarantee amounting Rs. 39,68,000/- paid to / shop-owners / showroom-owners / dealers (being reimbursement of expenses incurred On shop/showroom by dealer as per the terms of agreement). The appellant appointed various dealers as their exclusive brand franchisee and they were allowed to deal in all merchandises of the appellant through their showroom. The appellant would dispatch and deliver the goods to dealers on consignment basis at the showroom premises and in turn those dealers after deposit of certain amount as security deposit as per the agreement for the due performance of the terms and condition of the agreement. In return of services, a particular sum of amount was to be paid by the appellant to registered dealers on monthly basis as reimbursement of expenses. The dealers were entitled to commission as per the terms of agreement. In support of contention copies of some of the Agreements were filed. During Remand Proceedings, a part....
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....heir showroom. M/s Bru International was supposed to dispatch and deliver the goods to dealers on consignment basis at the showroom premises. Those dealers were supposed to deposit certain amount as security deposit with M/s. Bru International as per the agreement for the due performance of the terms and condition of the agreement. That a particular sum of amount was to be paid by M/s Bru International to registered dealers on monthly basis as reimbursement of expenses. The dealers were entitled to commission as per the terms of agreement. Agreements substantiating the above claims had already been filed with your honour in our submission dated 20.02.2015 page no. 39 to 150 of the page book. During Remand Proceedings, complete list of persons to whom commission had been paid, have been filed with Ld. AO along with copy of agreements containing complete address of payees. The Ld. .40 has not given any comment in his remand report regarding payment of commission to dealers which shows that the Ld. AO has nothing to comment in this regard. Your honor will appreciate that during the captioned year approx. Rs. 5,25,00,000/- had been paid from various banks for....