TaxTMI 
TaxTMI 
TaxTMI 
2021 (5) TMI 787
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....2. Coming to assessee's sole substantive grievance raised in the instal appeal seeking to revive both the lower authorities' action disallowing the finance charges of Rs. 1,81,07,126/-. 3. Mr.Pandey took us to the Assessing Officer's sole reason that this taxpayer as well as its group companies had taken recourse to accommodation entries only. He next invited our attention to the CIT(A)'s detailed discussion deleting the impugned addition as under: "5.2. I have considered the assessment order and grounds of appeal and submissions made by the AR. It can be seen from the assessment order that the AO has made out the case that the assessee is not conducting any trading activity and hence, the financial charges of Rs. 1,81,07,126/- debited t....
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....stablishes the use and validity of circumstantial evidence a part of which is human probability. These decisions are i) CIT Vs. Durga Prasad (1971) 82 ITR 540 (SC) ii) Sumati Dayal (1995) 80 Taxman 89 (SC) iii) CIT Vs. P.Mohan Kala (2007) 291 ITR 273 (SC) In the case of Durga Prasad More, the Hon'ble Apex court observed that "It is true that an apparent must be considered real until it is shown that there are reasons to believe that apparent is not the real. Party who relies on a recital in e deed has to establish the truth of those recitals, otherwise, it will be very easy to make self- serving statements in documents either executed or taken by a party and rely on those recitals. If all that an assessee who wants to evade ....
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.... the assessee has not debited any expenditure towards handling charges. (v) It is to be noticed that a large number of transactions were with group companies/concerns. (vi) AO, during scrutiny, asked the assessee to produce correspondence with seller / evidence regarding negotiation of rate and evidences as to the manner in which lowest price was accepted as it claimed that after getting orders from various customers, it places order with the supplier. Taking into account the turnover which ran into Crores of rupees / it is not believable that there was no correspondences at all. (vii) It failed to file the evidences regarding procurement of orders from the customers and the manner in which the same was delivered. Similar is the case ....
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....ransaction through letter of credit (LC) can be manipulated, which is quite common. When the purchaser and seller join hands, without real purchase, LCs can be generated and there will be movement of money. In case of availing LC facility, the seller sends his intimation to the buyer of goods who maintains LC account in bank. The seller in turn discounts the same from his banker and gets payment after meeting discounting charges. After the lapse of period of LC, the banker of the seller of the goods realizes the amount from the banker of the purchaser who opened the LC facility With his bank. Apparently, this looks a perfect arrangement. But at the same time the entire device can be so arranged that there will be movement of money without....
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....awn by the Assessing Officer is based on mere presumptions and surmise, rather than evidence. It is evident from the discussion made by the Ld. Commissioner of Income Tax(Appeals) in the impugned order, extracted above, the expenditure incurred by the assessee is fully supported by evidence and also certified by banks and financial institutions. That being the case, there cannot be any reason to doubt the genuineness of the expenditure. In this view of the matter, there being no infirmity in the order of the learned CIT(A), we do not find any reason to interfere with the same. We accordingly reject the grounds of the Revenue in this appeal". 5.5. I have gone through the said decision. It may be pertinent to mention that the theory of circ....