TaxTMI 
TaxTMI 
2021 (3) TMI 475
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....ly, both passed u/s. 153A(b) of the Income Tax Act, 1961 (hereinafter called "the Act") by learned Assessing Officer(hereinafter called " the AO") . We have heard both these appeals through video conferencing mode through virtual court. Both these appeals were heard together and are disposed off through this common order. 2. The grounds of appeals raised by assessee in memo of appeals filed with Income-Tax Appellate Tribunal, Allahabad (hereinafter called "the tribunal") for both the assessment year(s), reads as under:- ITA No. 66/Alld/2013-Assessment Year 2005-06 "1. That in any view of the matter order passed under Section 153A(b) of the Income Tax Act is without jurisdiction and by such order the income determined by the assessing officer is highly objectionable and incorrect and her action as partly confirmed by the Commissioner of Income Tax (Appeal) is unjustified and illegal. 2. That in any view of the matter the action under Section 132(1) of the Income Tax Act in consequence to which the notice issued under Section 153A of the act is without any incriminating material or any undisclosed income found during the course of the search the block as....
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....sidered and even reconciliation furnished by the appellant was not taken into accounts in judicious manner hence the addition made is unjustified and unwarranted and the findings and observations of the assessing officer for making the additions are absolutely incorrect and contrary to the actual facts of the case, 3. That in any view of the matter undue / unnecessary weightage has been given to the seized annexure A-5 based on which a profit of Rs. 3,15,17,675.00 as made by the assessing officer and a part of the same i.e. Rs. 1,79,15,749.00 as maintained by the Commissioner of Income Tax (Appeals) is highly unjustified and the reasons recorded for maintaining the part of the addition are incorrect and contrary to the actual facts of the case hence the same is liable to be deleted. 4. That in any view of the matter allegation of the Commissioner of Income Tax (Appeals) that the appellant understated the closing stock to the extent of Rs. 1,79,15,749.00 is highly unjustified and incorrect because the appellant is maintaining complete books of accounts and proviso to section 145(3) of the income tax act was not invoked hence the maintenance of a part of the additio....
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....as challenged the legality and validity of the assessment framed by AO against the assessee u/s 153A of the 1961 Act, as in view of the assessee no incriminating material or any undisclosed income was found during the course of search operations conducted by Revenue against the assessee on 27.08.2009 u/s 132(1) of the 1961 Act, but however, before us no contention were raised by ld. Counsel for the assessee challenging the validity and illegality of the assessment framed pursuant to search on the ground that no incriminating material or undisclosed income was found during the course of search operations. We have observed from assessment order passed by AO that several additions were made based on material /documents seized by Revenue during the course of search and seizure operations conducted by Revenue, u/s 132(1) of the 1961 Act on 27.08.2009. Thus, we dismiss Grounds No. 1 and 2 raised by assessee in memo of appeal filed with the tribunal. We order accordingly. 4. The assessee has vide ground number 3, 4 and 5 raised the contention on the merits of the issue which is a solitary issue raised before us, in which claim is made that the assessee has made a provision for Rs. 14,7....
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....he disallowance. In the alternative, it was submitted by ld. CIT-DR before the Bench that in case if the disallowance of these provision for scheme expenses are not upheld by tribunal, then in that case these provision for scheme expenses claimed by assessee requires verification by the AO and the issue may be restored back to the file of the AO for verification and fresh adjudication . 6. We have considered rival contentions and perused the material available on record. We have observed that the assessee is engaged in manufacturing, producing and processing of Masalas (spices) and other food products. There was a search and seizure operations carried on by Revenue u/s. 132(1) of the 1961 Act on 27.08.2009 in the business and residential premises of the group cases of Kesarwani Zarda Bhandar, Sahson, Allahabad and its partners and Directors. The assessee company is a sister concern of M/s Kesarwani Zarda Bhandar. During the course of search and seizure operations conducted by Revenue against the assessee on 27.08.2009 u/s 132(1) of the 1961 Act, the Revenue, inter-alia, seized Annexure LP-2, in which at page number 12 is a trial balance ending on 31.03.2005, and there was no ent....
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.... . The ld. CIT(A) held that the liability created by assessee @6% of sales towards sale promotion expenses is not justifiable at all. The ld. CIT(A) further observed the said liability is paid in subsequent year which is not examined by AO. The ld. CIT(A) held that the said liability is contingent in nature and not allowable as per provisions of Section 37(1) of the 1961 Act. The ld. CIT(A) held that the assessee has failed to substantiate that the liability created was payable during the year in terms of principles of mercantile system of accounting. Thus, the ld. CIT(A) rejected the claim of the assessee and confirmed the additions as were made by the AO. The copy of scheme stated to have been filed before the ld. CIT(A), has not been filed by assessee before the Tribunal. The assessee has made provisions towards sales promotion expenses to the tune of Rs. 14,77,400/- in its audited books of account for the financial year 2004-05 based on the contentions that these are crystalized liability towards sales promotion expenses based on sales promotion scheme conducted by assessee. The said expenses did not found mentioned in the seized trial balance of the assessee for the financial ....
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....g of targets by buyers and liability crystalized as per scheme run by assessee. The assessee has also not brought on record sales promotion scheme conducted by it before the AO, nor ld. CIT(A) remanded the matter to the file of the AO for seeking remand report from AO as the sale promotion scheme was filed for the first time before ld. CIT(A) as additional evidences. In our considered view keeping in view totality of facts and circumstances of the case and in the interest of justice and fair play, the matter needs to be restored back to the file of the Assessing Officer for fresh/denovo consideration of the issue on merit in accordance with law. The assessee has claimed these expenses in its book of accounts as business expenses, and deduction of these sales promotion expenses from the income is claimed and hence primary onus is on the assessee to prove that they are genuine and bonafide expenses which are incurred wholly and exclusively for the purpose of business of the assessee, thus satisfying the mandate of Section 37(1) of the 1961 Act. The assessee is directed to submit all relevant details/documents before the AO during the course of denovo assessment proceedings before the....
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....aterial etc. but not booked in the balance sheet, as the assessee failed to produce any evidence in support of its contentions. The search and seizure operation was carried on by Revenue against the assessee u/s 132(1) of the 1961 Act on 27.08.2009, while audited accounts were prepared on 05.09.2009. It is not uncommon that while finalizing the audited financial statements, year end adjustment entries are processed to reflect the true and fair view of the accounts in accordance with provisions of the Companies Act, Income-tax Act and other applicable satutes, such as making year end entries for depreciation, income tax, or to adjust for reconciliation of bank accounts, consolidation of various units/branches and eliminating of inter-unit/offices contra entries . It is also observed that assessee has claimed that the consumption entries were not posted in the tally accounts at the time when search operations took place which led to the differences in the balances of the stock. It is also claimed that the assessee has units/offices/branches at Kanpur and/or Allahabad and this trial balance which is extracted is only of Kanpur unit and later on compilation were made and consumption en....