TaxTMI 
TaxTMI 
2020 (12) TMI 859
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....T(A) has erred in hiding that no addition can be made to the income of the assessee if the expenditure is not claimed in the P&L account. 4. On the facts and in the circumstances of the case, the CIT(A) has erred in hiding that the AO is at liberty to examine the allowability of purchase in the assessment year 2012-13 when the transactions has been undertaken in the A.Y. 2011-12 and has been found to be bogus. 5. On the facts and in the circumstances of the case, the CIT(A) has erred in ignoring the fundamental cannons of principle of taxation that the determination of income and examination of accounts under the Income Tax Act is qua assessment year wise. 6. On the facts and in the circumstances of the case, the CIT(AS) has erred in deleting the addition of Rs. 6,25,00,000/- made by the AO on account of unverifiable purchases. 7. On the facts and in the circumstances of the case, the CIT(A) has erred in holding that the creditworthiness, genuineness and identity of the creditor shall be examined while examining the case of Grugal Developers Pvt. Ltd. when amounts were found credited in the accounts of the assessee. 8. On the facts and in the circumstances of the case, th....
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....on account of unverifiable purchases. Further submissions of the assessee that when assessee is following percentage of completion method for declaring its income, the claim of expenditure by way of above purchases in only to that extent is also not acceptable because in the project work in progress, entire purchases are debited." 7. On perusal of the record we find that on identical set of facts for the same parties the AO in A.Y. 2010-11 in assessee's own case had made addition of Rs. 7,86,21,320/-. The quarrel travelled upto the Tribunal and the Tribunal in ITA No. 4907/Del/2014 vide order dated 13.08.2018 has dealt with the disallowance as under:- "14. We have given thoughtful consideration to the orders of the authorities below. The facts on record show that a search and seizure operation was carried out in the appellant's group on 11.3.2011, It is pertinent to mention here that no incriminating material was found during the course of search proceedings. The AO chose four parties from whom building construction materials were purchased. It would not be out of place to mention that the fair market value of the project situated at Paramount Symphony, NH - 24, Ghaziaba....
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.... recycled back to the assessee and accordingly, held that addition was not called for. In that case also, the AO had disallowed some expenditure treading the purchases as bogus and made the addition. 18. The Id. DR Has strongly relied upon the judgment of the Hon'ble Gujarat High Court in the case of N.K. Proteins Ltd. 2016-TIOL 3165- AHM-IT wherein the facts show that during the course of search proceedings at the office premises of NKPL, blank signed cheque books and vouchers of number of concerns were found. Further, endorsed blank cheques of NKPL by these concerns were also found wherein the endorsement was on the back of the cheques. Accordingly, the purchases made from these concerns were treated as bogus purchases by the AO. 19. The facts of the case in hand are clearly distinguishable from the facts of this case in as much as there; was nothing of such documents, as referred, were found from the possession of the assessee even during the course of search and seizure operation. The Id, PR has also placed reliance on some other judicial decisions, but the facts are totally different from the facts of the case in hand. 20. As mentioned elsewhere, total estimated valu....
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....shown to have received share application money from all these parties mentioned here in above. 12. The assessee in its reply before the AO stated as under:- "During the year under consideration to argument the need of working capital we had obtained loans from certain parties through RTGS/Banking channels. The funds so obtained were however returned through account payee cheques drawn on our disclosed bank accounts within same accounting year. AS required by your goodself, the complete details and addresses of such parties alongwith their respective statements of accounts were already placed on record. "It is also a matter of fact on record as borne out by the search proceedings as well that nothing on the contrary is found suggesting that the share application money is otherwise not genuine. Nothing in this connection have been confronted to us in either the assessment or search and later post search proceedings. It is also a matter of fact borne out by the assessment proceedings that till date nothing on the contrary is communicated to us." 13. Reply of the assessee did not find any favour with the AO who proceeded by making addition of Rs. 6.25 crores u/s. 68 of the Act. ....