TaxTMI 
TaxTMI 
TaxTMI 
2021 (1) TMI 561
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....hese appeals, hence all these four appeals and CO were heard together by Division Bench and are disposed of by this common order. These four appeals and CO were heard by Division Bench through video conferencing mode through Virtual Court. 2a. The grounds of appeals raised by assesse in ITA No. 632/Alld/2014 for ay : 2007-08 in memo of appeal filed with Income-Tax Appellate Tribunal, Allahabad (hereinafter called " the tribunal") reads as under : ITA No. 632/ALLD/2014 "1. That in any view of the matter the assessment framed vide Order dated 28.12.2011 U/s 143(3) of the Income Tax Act by the assessing officer and his actions as partly maintained by the Commissioner of Income Tax (Appeals) both are unjustified and illegal on facts of the case and also bad in law, therefore the declared income of the assessee in the return should have been accepted in the facts and circumstances of the case. 2. That in any view of the matter observations and findings of the two lower authorities for making and maintaining additions/ disallowances in their orders are incorrect, general, vague and contrary to the actual facts of the case and hence deserve to be ignored. 3. That in any view of th....
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....ee before making the additions/disallowances under different heads which is highly unjustified and illegal. 10. That in any view of the matter the penal interest charged under various provisions of the Income Tax Act is highly unjustified and illegal in the facts and circumstances of the case. 11. That in any view of the matter the assessee reserves his right to take any further ground of appeal, before hearing of the appeal." 2b. The grounds of appeals raised by assesse in ITA No. 152/Alld/2013 for ay : 2009-10 in memo of appeal filed with tribunal reads as under : ITA No. 152/ALLD/2013 "1. That in any view of the matter since it is an admitted fact on record that a survey u/s 133A of the income tax act was conducted on 27.08.2009 and not any search and seizure u/s 132(1) therefore the proceedings initiated u/s 153A of the income tax act and the entire assessment made u/s 153A(b) are unjustified and illegal and the two lower authorities failed in considering the issue in appropriate manner. 2. That in any view of the matter assessment framed u/s 153A(b) of the income tax act vide order dated 28.12.2011 is bad both on the facts and in law as the entire additions/disallowa....
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....and recorded in books therefore addition maintained by the Commissioner of Income Tax (Appeals) is unwarranted. 8. That in any view of the matter addition of Rs. 1,02,000.00 as made by the assessing officer as per Para 4 of the assessment order and the same as maintained by the Commissioner of Income Tax (Appeals) as per Para 5.2 of his order without considering and discussing the issue is highly unjustified and unwarranted in the facts and circumstances of the case. 9. That in any view of the matter disallowance of Rs. 9,426.00 and Rs. 6,320.00 under the head 'General expenses' and under the head 'Dispensary expenses' a disallowance at the rate of 10% unwarranted because in the income tax act there is no such provision to disallow the expenses on percentage basis hence liable to be deleted. 10. That in any view of the matter the interest as charged under different section of the income tax act is highly unjustified. 11. That in any view of the matter the appellant reserves his right to take any fresh ground of appeal before hearing of the appeal." 2c. The grounds of appeals raised by Revenue in ITA No. 179/Alld/2013 and C.O. No. 16/Alld./2013 filed by assessee arising out....
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.....I.T. (Appeal) as per para 5.2 of his order is not correct as the addition maintained without considering the facts and circumstances of the case. 6. That in any view of matter it not correct to say that the order of C.I.T. (Appeal) being erroneous in law and on facts. 7. That in any view of matter the respondent reserve his right to taken any facts ground of appeal or amend before hearing of appeal. 8. That in any view of matter departmental appeal is bad in law as well as on facts and therefore liable to be dismissed and addition maintained are also liable to be deleted." 2d. The grounds of appeals raised by assessee in ITA No. 633/Alld/2014 for ay : 2010-11 in memo of appeal filed with tribunal reads as under : ITA No. 633/ALLD/2014 "1. That in any view of the matter the assessment framed vide Order dated 28.12.2011 U/s 143(3) of the Income Tax Act by the assessing officer and his actions as partly maintained by the Commissioner of Income Tax (Appeals) both are unjustified and illegal on facts of the case and also bad in law, therefore the declared income of the assessee in the return should have been accepted in the facts and circumstances of the case. 2. That in an....
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....Commissioner Income Tax (Appeal) is unjustified and incorrect in the facts and circumstances of the case, hence the same is liable to be deleted in interest of justice. 9. That in any view of the matter assessment framed and Assessing Officer's actions as partly confirmed are abinito void, unlawful and bad in law, without appreciation of facts and utter disregard of the submissions tendered by the appellant, the lower authorities based on unwarranted presumptions, surmises, conjectures and imagination only without any evidence, therefore the additions/disallowance under different head so made and maintained are unwarranted hence the same are liable to be deleted. 10. That in any view of the matter no reasonable opportunity was provided to the assessee before making the additions/disallowances under different heads which is highly unjustified and illegal. 11. That in any view of the matter the penal interest charged under various provisions of the Income Tax Act is highly unjustified and illegal in the facts and circumstances of the case. 12. That in any view of the matter the assessee reserves his right to take any further ground of appeal, before hearing of the appeal.....
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....tion with the aforesaid search and seizure operations conducted by Revenue against the assessee u/s 132(1) of the 1961 Act, on 27th August, 2009. The copies of Panchnama's prepared during the course of search operations on 27.08.2009 are also filed by Revenue with the tribunal. The counsel of the assessee was also given copies of Warrant of Authorisation drawn by Revenue against the assessee and also copies of Panchnama prepared during the course of Search operations conducted by Revenue against the assessee on 27.08.2009, u/s 132(1) of the 1961 Act . The aforesaid warrant of authorization and Panchanama are placed on record in file. At the opening of the hearing before the Bench, the learned counsel for the assessee at the outset conceded that he has gone through the documents furnished by Revenue in connection with Search and Seizure operations conducted by Revenue against the assessee u/s 132(1) of the 1961 Act, on 27.08.2009 and it was accepted by learned counsel for the assessee that admittedly warrant of authorization were issued against the assessee by Revenue authorizing conducting of Search and seizure operations against the assessee u/s 132(1) of the 1961 Act, and Panchna....
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....to 11 raised by assessee in memo of appeal filed with tribunal, as not being pressed. After considering contentions of both the parties, we dismiss ground numbers 1 to 4 and 6 to 11 raised by assessee in memo of its appeal filed with tribunal, as not being pressed. We order accordingly. 6. This leaves us with ground number 5 raised by assessee in memo of appeal filed with tribunal, which is vehemently argued by assessee, and which requires adjudication by us on merits of the issue raised in the appeal filed with the tribunal. During the course of search and seizure operations conducted by Revenue u/s 132(1) of the 1961 Act against the assessee on 27.08.2009, the Revenue seized a document ( numbered as LP-19, page number 41) from the business premises of the assessee . The said seized document is reproduced by AO in its assessment order dated 28.12.2011 passed u/s 153A(b) of the 1961 Act, at page number 2 ( also placed in paper book filed by assessee at page number 52), which is a letter dated 29.11.2006 written by one Mr. Hulas Sharma of 'Sudama Singh & Sons', of Purani Gurhati, Chapra,, Saran which is written to the assessee by said Mr. Hulas Sharma, and reference is made to a ba....
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....& Sons' and also 'M/s Mukesh Kumar and Company' ware related parties of the same group and even their addresses are same. It is submitted that invoice of Rs. 1,00,002/- for supply of chaff cutter machine and spare parts, was raised in favour of Mr. Mukesh Kumar Singh, Purani Gurhati, Chhapra, Bihar and cash of Rs. 1,00,000/- was received against the said bill, which is duly accounted for in books of accounts of the assessee. We have observed that in the said letter dated 29.11.2006 written by Mr. Hulas Sharma of M/s Sudama Singh and Sons which was seized by Revenue, there is a mention of 'Mukesh' which was later stuck off by said Mr. Hulash Sharma. In this seized letter, Shri Hulash Sharma has asked for receipt of cash of Rs. 1 Lac. It is also observed that assessee is regularly dealing with M/s Mukesh Kumar & Company and payments were also received by cheque during the year under consideration from said M/s Mukesh Kumar and Company. The assessee has raised invoice of Rs. 1,00,002/- bearing number 126, dated 28.11.2006 for supply of chaff cutter and spare parts in favour of Mr. Mukesh Kumar Singh of Purani Gurhatti, Chhapra, Bihar. The said bill is entered into books of accounts of....
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....nted one with bill number pre-printed on the invoice. Further, in the said invoice even the Lorry/truck number is mentioned in which the goods were transported by assessee viz.MP 17/7917 to said Mr. Mukesh Kumar . No enquiry whatsoever was made by Revenue even at first appellate stage. Further Hulash Sharma is seeking for receipt of Rs. 1 Lac paid by them in cash and name of 'Mukesh' is struck off in the said seized letter dated 29.11.2006, which also strengthen our view that this Rs. 1 Lac received by assessee is against the bill no. 126. There are other dealings of the assessee with the said party M/s Mukesh Kumar and Company during the year under consideration and even payments vide cheque was received ( see ledger account of M/s Mukesh Kumar and Company), hence we accept the contention of the assessee on the touchstone of preponderance of probabilities. The assessee has discharged its primary onus and it was for the Revenue to have brought evidence to demolish the story set up by assessee in order to unravel the truth, which Revenue failed to do so. Thus, in the result, we allow the appeal of the assessee because on touchstone of preponderances of probability, we are of the co....
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.... the contentions of the assessee and made addition to the income of the assessee to the tune of Rs. 25,750/- on account of allegations of making sales outside books. Before us, similar contentions were made by the learned counsel for the assessee who submitted that there was a human error in posting made in the stock register wherein the sales were made of 125 chaff cutter machines to M/s Raj Machinery Store, Rajendra Path, Patna, Bihar, vide bill no. 68 dated 24th June, 2009 ( challan number 68 dated 24.06.2009), but due to human error entry was made in the stock register (which was seized by Revenue during search operations ) as 135 Chaff Cutter Machines, and this error was a bonafide human error which was later corrected by assessee suo motu on 31st August, 2009, after the conclusion of search operations. The learned CITDR objected and submitted that the addition be confirmed as the assessee has sold 10 chaff cutter machines out of books and this is an undisclosed income which was rightly brought to tax by Revenue. It was submitted that said undisclosed income was detected only due to search conducted by Revenue against the assessee. We have heard both the parties and perused th....
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.... made by the assessee while posting stock covered by sales in the stock register and we order deletion of addition of Rs. 25,750/- as was made by the AO which was later confirmed by ld. CIT(A). We order accordingly. 11. Now coming to ground of appeal no. 6 raised by assessee in memo of appeal filed with tribunal, we have observed that several loose papers (marked as Annexure LP-6) were seized by the Revenue from assessee during the course of search operations conducted by Revenue against the assessee u/s 132(1) of the 1961 Act, on 27.08.2009, the details of the seized material have been given in the orders of the authorities below . It is observed that there are cash receipt / payments which are recorded in these seized material, and an amount to the tune of Rs. 1,31,880/- is under dispute as is recorded in several loose papers. We have carefully gone through all the said cash receipts / payments as are found mentioned in seized document marked as Annexure LP-6, and it is observed that these are all Kaccha receipts/payments. We have also observed that these cash receipts / payments were not entered in the cash book as is produced before us. The assessee has not chosen to file sei....
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....shown to have been received in cash by assessee on 22.06.2009 is not demonstrated to be reflected in cash book. We are of the considered view that the assessee is not able to justify and/or connect these receipts / payments as are found mentioned in loose documents seized by Revenue, with the transactions sought to be explained by assessee as are recorded in its books of accounts, and the explanation which is made by the assessee are merely an after thoughts to wriggle out of tax ambit. Thus, we reject the contention of the assessee on this issue and uphold /sustain the addition as was made by AO and which was later sustained / upheld by learned CIT(A). We order accordingly. b) There is a loose document in seized Annexure LP-6, where the name of party M/s Saroj Enterprises, Naini is mentioned and there is a mention of amount of Rs. 5000/- and Rs. 9500/- in the said loose document, along with date 30.07.2009. There is also a mention of '3.700' in the said loose document The assessee has stated that the amount of Rs. 14,500/- was received from Saroj Enterprises, Naini as sale proceed on behalf of one Ms Garib Das Jaiswal, Karvi. There is no nexus proved by the assessee between M/....
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....urther, no connection/nexus between 'Santosh' as mentioned in seized document and M/s Badri Prasad Amar Nath is brought on record. We are of the considered view that the assessee is not able to justify and/or connect these receipts / payments as are found mentioned in loose documents seized by Revenue, with the transactions sought to be explained by assessee as are recorded in its books of accounts, and the explanation which is made by the assessee are merely an after thoughts to wriggle out of tax ambit. Thus, we reject the contention of the assessee on this issue and uphold /sustain the additions as was made by AO and which was later sustained / upheld by learned CIT(A). We order accordingly. d) Payment of Rs. 13130/- made on 08.07.2009 as per seized Annexure LP-6 to M/s Shree Harikrishna Road Carriers as advance freight, as is mentioned in the said seized document . The assessee is contending that this payment is reflected in cash book as being made on 16.05.2009, while seized document clearly refers to payment being made on 08.07.2009 by assessee as advance freight to M/s Shree Harikrishna Road Carriers. We are of the considered view that the assessee is not able to justify a....
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....come in appeal before the tribunal for the additions sustained by learned CIT(A). The Cross Objections are filed by assessee in support of learned CIT(A) appellate order granting relief to the assessee, against which Revenue is in appeal before the tribunal. 15. So now coming to the merits of the issue. There was a search and seizure operations conducted by Revenue against the assessee u/s 132(1) of the 1961 Act, on 27.08.2009. There was also an simultaneous survey operations carried on by Revenue u/s 133A of the 1961 Act against the assessee's Chartered Accountant namely M/s. Gupta Sanjay & Associates on 27.08.2009 wherein some documents were impounded by Revenue during the course of survey operations from the premises of aforesaid CA of the assessee . The AO during the course of assessment proceedings observed that there is a difference in purchases, consumption, closing stock of raw materials and finished goods shown in audit report and as per Annexure P-6 impounded from the premises of the aforesaid assessee's Chartered Accountant namely M/s Gupta Sanjay & Associates during the course of survey operations under Section 133A of the Act. The AO observed that the weight of items ....
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....t impounded from the premises of M/s Gupta Sanjay & Associates was with respect to raw material namely Pig Iron and Coal, as is mentioned in the impounded document, but there are several other materials, consumables etc. which were purchased by the assessee and which are used in manufacturing activities carried on by assessee, which are not included in the aforesaid impounded document, while the same are duly accounted for in the books of accounts and consequently in the audit report . The assessee also explained that it is mentioned in the document itself that this document concerns itself with Pig Iron and Coal, and it was explained by assessee that there are other raw material and consumables which are used for manufacturing activities carried on by assessee of agricultural equipment's such as chaff cutters machine, Osai fan, cane crusher and thresher etc. . The explanation offered by assessee was disbelieved by the AO as AO was of the view that when quantity in weight are tallying between the document impounded from the office of CA during survey operations and in the audit report, there is no justification offered by the assessee for variation in the amount of purchase, consum....
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.... M/s Benaras Steel Traders are genuine. The learned CIT(A) confirmed the additions with respect to purchases to the tune of Rs. 3,08,98,592/- on the grounds that the assessee failed to brought on record evidences for purchases such as purchase invoices, vouchers, details of payment, confirmation from relevant parties and evidences in support of transportation of material and stock records, vide appellate order dated 10.01.2013 passed by learned CIT(A). 18. Now, Both assessee and Revenue being aggrieved by the appellate order passed by learned CIT(A) have filed cross appeals before the tribunal. Similar contentions were made by learned counsel for the assessee as were made before lower authorities. It was submitted by learned counsel for the assessee that there was a search and seizure operations conducted against the assessee by Revenue on 27.08.2009, u/s 132(1) of the 1961 Act and simultaneously there was a survey operations conducted by Revenue against the CA of the assessee namely Gupta Sanjay and Associates, u/s 133A of the 1961 Act. There was a document impounded from CA during survey operations conducted on 27.08.2009 u/s 133A of the 1961 Act, marked as Annexure P-6. It was....
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.... were sustained by learned CIT(A) and on assessment order of the AO on the issue on which learned CIT(A) has given relief to the assessee. 19. We have heard rival contentions and perused the material on record. We have observed that the assessee is engaged in the business of manufacturing of agricultural equipment's such as chaff-cutter machine, Osai-fan, cane-crusher and thresher etc., and sale of these agricultural equipment's. there was a search and seizure operations conducted against the assessee by Revenue on 27.08.2009, u/s 132(1) of the 1961 Act and simultaneously there was a survey operations conducted by Revenue against the CA of the assessee namely Gupta Sanjay and Associates, u/s 133A of the 1961 Act. There was a document impounded from CA marked as Annexure P-6. The authorities below had observed that there is a difference in purchases, consumption, closing stock of raw materials and finished goods shown in audit report and as per Annexure P-6 impounded from the premises of the aforesaid assessee's Chartered Accountant namely M/s Gupta Sanjay & Associates during the course of survey operations under Section 133A of the Act. The AO observed that the weight of items in ....
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....ctivities carried on by assessee, which are not included in the aforesaid impounded document, while the same are duly accounted for in the books of accounts and consequently in the audit report . The assessee had also explained that it is mentioned in the document itself that this document concerns itself with Pig Iron and Coal, and it was explained by assessee that there are other raw material and consumables which are used for manufacturing activities carried on by assessee of agricultural equipment's such as chaff cutters machine, Osai fan, cane crusher and thresher etc. . The explanation offered by assessee were disbelieved by authorities below as they were of the view that when quantity in weight are tallying between the document impounded from the office of CA during survey operations and in the audit report, there is no justification offered by the assessee for variation in the amount of purchase, consumption and stock recorded in the impounded document and the books of accounts. The AO observed that the assessee has manipulated its stock and inflated its purchases of material, and it is only because of Survey carried out by Revenue that this fact has come into light . The A....
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....ntions of the assessee, but the grievance of the Revenue is that the assessee has not such as purchase invoices, vouchers, details of payment, confirmation from relevant parties and evidences in support of transportation of material and stock records before the authorities below, which fact is emerging from appellate order passed by learned CIT(A). These details require verification as to whether the expenses were incurred for business of the assessee or not. The assessee is claiming deduction from income towards purchases of raw material and consumables and the onus is on the assessee to prove that deductions are claimed in accordance with provisions of the 1961 Act . The assessee has to justify that these purchases/consumables are used for its business . The manufacturing process is to be brought on record by assessee with respect to manufacturing activities carried on by the assessee and details of raw material and consumables required in connection with the manufacturing process carried on by assessee or for other business needs of the assessee is required to be brought on record. Thus based on material on record, in the interest of justice and fairness to both the rival part....