TaxTMI 
TaxTMI 
2021 (7) TMI 810
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.... 2.That of the facts and in the circumstances of the case of the assessee the Learned Commissioner of Income Tax (A) 1, Bhopal was not justified in confirming the disallowance to the extent Rs. 7,76,615.00 towards registration expenses. 3.That of the facts and in the circumstances of the case of the assessee the Learned Commissioner of Income Tax (A) 1, Bhopal was not justified in confirming the disallowance to the extent Rs. 9,12,873.00 towards purchase of course material. 4.That of the facts and in the circumstances of the case of the assessee the Learned Commissioner of Income Tax (A) 1, Bhopal was not justified in confirming the disallowance to the extent Rs. 40,72,135.00 towards training material 5.The assessee craves leave to add, alter amend or withdraw any ground of appeal on or before the time of hearing. 3. Revenue has raised following grounds of appeal; ITA No.952/Ind/2019 Assessment Year 2013-14 "On the facts and in the circumstances of the case, the CIT(Appeal) has erred in: 1. "Whether on the facts and circumstances of the case, the Ld. CIT(A) was justified in deleting addition of Rs. 3,60,465/-, when the ....
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....015-16 "On the facts and in the circumstances of the case, the CIT(Appeal) has erred in: 1. "Whether on facts and circumstances of the case, the Ltd. CIT(A) was justified on deleting addition of Rs. 23,00,00,000/-, when the assessee himself declared the expenses incurred on account of purchase of books from vendors at Itarsi amounting to Rs. 23 Crores as non genuine expenses and paid taxes thereon and the Assessing Officer in the assessment order has established the non genuineness of such purchases by highlighting the round tripping of funds through such purchase transactions between assessee and its sisters, concerns, which clearly reflect the non genuine nature of transactions under taken by the assessee." 2. "Whether on the facts and circumstances of the case, the Ld. CIT(A) was justified in deleting addition of Rs. 3,16,358/- on account of disallowance of interest expenses, when the assessee had advanced interest free loans amounting to Rs. 95,44,174/- and therefore, proportionate interest @12% on interest expenses incurred on borrowed funds was disallowed." The appellant reserves his right to add, amend or alter the grounds of appeal on or ....
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....mpany at nominal cost. The main work done by the assessee for the Universities is as under: 1. Management of IT portal of the University, mobilization and registration of students for Universities. 2. Maintaining students database for online and distance education programme for Universities. Supply of course material and course kits including the students bags. Providing e-contract online, etc. 3. Data processing support for result preparation for universities. 4. Provision for learning support through its learning centres and provision of hardware and software and arrangement of skill training centres. E-Return of income filed on 26.9.2013 declaring income at Rs. 4,06,15,880/-. Case selected for scrutiny through CASS followed by serving notices u/s 143(2) and 142(1) of the Act. When the assessment proceeding was undergoing survey was conducted u/s 133A of the Act on 9.10.2015 and 10.10.2015. Statement of Managing Director Mr. Santosh Choubey was recorded where he voluntarily offered Rs. 23 crores on account of inflated purchase in the books. The copy of the statement was provided to the assessee on 20.10.2015. On 10.11.2015 retractio....
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....2 for maintenance of addition of Rs. 7,76,615/-. 1. The Assessee is having various study centres throughout the country through which the students in the local area are provided guidance and counseling of the various courses available in the University. In this process Registration and prospectus fees is collected from the students and forwarded to the University. During this year 76931 students were registered through various centres and the prospectus fess of such students @ 250/- per student = Rs. 1,92,32,750/-was collected and remitted to the Dr. C.V. Raman University. Some of the centre had purchase extra copies of the prospectus and dues of the same was also remitted. 2. The aforesaid details were submitted to the AO on 30.03.2016 in which in reply to a separate query the AO was informed that 41675 students were registered for short term courses. The AO however erroneously concluded that total 41675 students were registered and allowed the expenses for these no. of student and disallowed the balance without appreciating that the total prospectus were issued for 76931 students and only 41675 students were registered for short term courses. The Learned CIT-A o....
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....ies. Thus, the assessee has received sale consideration for sale of books of over Rs. 14 crore from its associate concerns. The assessee has also made purchases from these Universities for the books supplied for other concerns. The assessee has purchased books from the sister concerns of Rs. 3,04,29,100/- and has supplied/sold the books to others. Thus on net basis the assessee has received an income which negates the presumption that these transactions were non genuine or was undertaken with an object of reducing its income. During the year the assessee has shown course material expense of Rs. 5,14,59,665/- out of which purchase of Rs. 3,04,29,100/- were made from associated concerns which have been disallowed by the AO holding that the assessee has failed to establish the genuineness of the claim of expenses. The said belief was formed by the AO on the following reasons as mentioned by him in the assessment order: Sr. No Reasons mentioned by the AO in the assessment order Submissions of the assessee 1 The assessee has not furnished copy of MOU with these concerns for purchase of books. Availability or Non availability of MOU cannot by ....
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....oks/course material to the students. Thus the books are supplied to the students at free of cost by the Universities through the assessee company. The said Universities make payment to the assessee company of the sale price of the books supplied to the students. These books/course materials are supplied by the assessee to the students through its centers and the books are sent by using the services of the postal department. As the books purchased by the assessee have been sold and the sale proceeds are duly shown as income, there was no occasion to treat the purchase of these books from the associate societies as non genuine. If the purchases are doubted then there cannot be any sale. The corresponding sale should have been reduced from the income. The Ld. A.O., however, did not consider the arguments of the assessee and disallowed the whole amount paid to the sister concerns on the ground that the assessee has failed to establish the genuineness of the transaction. The Ld. CIT(A) after considering the submissions of the assessee remarked that the sale of books are not disputed and as such the corresponding purchases cannot be held to be non-genu....
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.... that company to reduce the income is not probable. It may be mentioned that the assessee was having 14900 students for Insurance and Banking courses. The said number is easily verifiable from the details of students submitted during the course of assessment proceedings. M/s SECT Infotech Ltd is approved by IRDA (Insurance regulatory and development authority) for conducting courses on insurance. The said company has been rendering services in insurance sector which will be obvious from the fact that TDS has been deducted by various insurance companies on payments made by them. iii. SECT (Society for electronics & Computer Technology): The said society is running college in the name of SECT College of professional education providing courses like BA, B.Com, BBA, BCA and is affiliated to Barkatullah University, Bhopal. The said society has its own infrastructure and faculty for training which was provided to students by using the infrastructure and faculty of the college. iv. Significant Electronics & Computer Technology P Ltd (SECT P Ltd): The said person is a corporate entity having the same rate of tax applicable to it as is applicable to the assessee c....
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....required by that specific job. 6.6.3(vi) Copy of agreement/MOU with sister concerns not furnished Availability or non availability of MOU will not make any expenses genuine or non genuine by itself. 6.6.4 The assessee has made this arrangement of payment of huge fee on account of training expenses to its sister concerns having exemption u/s 12A and thus entire motive appears to part its funds with these exempted entities. Fees of Rs. 3,10,21,100/- is paid to corporate entities having same rate of tax as is applicable to the assessee. As mentioned in Para 6.6.1 certification work was done by the respective university. AISECT Bhopal is managing a University in the name of AISECT University. Thus payment of Rs. 3,28,27,000/- was made for training/ certification to students. Thus it would be appreciated that fees were paid to the institute who were having adequate infrastructure and faculty available with them. Fees were received from the exempted entities itself for providing training to students and part of the receipt was paid back for providing certification/training as required. Thus the allegation that the assessee has made payments to these entities....
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.... dismiss Revenue's Ground No.1 for the Assessment Year 2013-14. 14. Now the second issue for Assessment Year 2013-14 relates to disallowance of registration expenses. Brief facts relating to this issue are that the assessee runs various study centres across the country for providing guidance and counselling to students for various courses available in the university. Rs. 250/- per student was collected for 76931 students of which 41675 were for short term courses and remaining for long term courses and remitted to Dr. C.V. Raman University. During the assessment proceedings Ld. A.O inadvertently took basis of 41675 students being enrolled during the year and disallowed remaining sum of Rs. 89,96,634/- When the matter came up before Ld. CIT(A) he was again provided details of all the 76931 students along with the details of collection for fees from the students and its remittances to the universities. Based on these documents and appreciating the facts Ld. CIT(A) deleted the addition for Rs. 82,20,019/- but sustained the disallowance at Rs. 7,76,615/- as an adhoc disallowance of 4% on the total expenses incurred during the year based on disallowance made in the previous ass....
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....istered for short term courses as has been specifically mentioned in the written submissions dated 30.03.2016 in Para 3 which was with reference to the query of the AO with regards to expenses shown under the head "fees paid" and was not with reference to the expenses booked under the head "registration, renewal and data processing fees". The query regarding the expense booked under the head "registration, renewal and data processing fees" was replied in Para 2 of the same reply in which the number of students is mentioned as 76931 students. In Para 5 of the same reply the assessee has mentioned that "as explained earlier a total of 76931(as in 4 above) + 41675(short term certificate programme) = 1,18,606 students joined various programs ...." Thus it is seen that the AO ' has picked up the number of students of short term courses' mentioned in the written submission in some other context. Thus' the disallowance made by the AO towards difference in the, number of students was not justified. It is however seen that as per the calculation provided, the assessee was required to have paid Rs. 1,92,32,750/-(Rs. 250 * 76931 students) as against expenses claimed of Rs....
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....ssessment of the assessee in preceding years. All the records pertaining to collection of fees, its remittances of such collection to the university and receipts from the university acknowledging the receipt to the fees are on the record and have not been challenged or found to be incorrect at any stage. Thus such disallowance of Rs. 7,76,615/- was uncalled for. Accordingly we are of the considered view that no addition for Rs. 89,96,634/- was required to be made by the Ld. A.O. We accordingly allow Ground No.2 raised by the assessee and dismiss Ground No.2 raised by the Revenue. 16. Now we take up third issue pertaining to disallowance of purchase made from sister concerns wherein Ld. A.O disallowed total purchase of Rs. 3,04,29,100/- made from sister/associate concerns but Ld. Cit(A) sustained the disallowance only to the extent of Rs. 9,12,873/- out of 3% of the total purchase from sister concerns. The assessee and Revenue are in appeal wherein assessee has raised Ground No.3 challenging the disallowance sustained at Rs. 9,12,873/- whereas Revenue has raised Ground No.3 challenging the finding of Ld. CIT(A) deleting the addition of Rs. 2,95,16,227/-. 17. Facts in brief per....
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....as mentioned in the assessment order is that the assessee has purchased as well as sold books to AIS~CT Ltd which have been done with the object of giving direct/indirect benefit to the said company. Thus in the assessment of the payer as well as the payee the respective AO's have alleged diversion of funds to 'the other party. It would have to be appreciated that both theK parties cannot provide undue Kbenefits to each other in the same transaction. Thus these observations/allegations in absence of any supporting material on record are required to be ignored. The AO had also doubted the purchase as the assessee has failed to submit copy of' MOUI agreement; however availability or 'non availability of MOU cannot be a determinative factor of the genuineness of the transaction. Further in the case of purchase/sale generally no MOU is prepared and in absence of any such MOU the assessee could not have been expected to produce it. As regards not giving any justification for purchase of books from the sister concerns it is noted that the assessee has been supplying/ selling books' to the students of associated universities for which fees has been received by....
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....,000/- 2.72% The AO has not brought out any material on record which suggests that the appellant has incurred the expenses other than business purpose. In the case of International Forest Co. vs. CIT (1975) 101 ITR 721 (J&K) it is held that AO cannot proceed to make an arbitrary addition and base his conclusion purely on guess work. He ought to have related his estimate to some evidence or material on the record as it is now well settled that if . the profits shown by the appellant in his return are not accepted it is for the taxing authorities to prove that the appellant has made more profits than returned. Here the AO failed to bring on record anything which shows that appellant has earned more profit than declared. The AO has not made any enquiry and. arbitrarily made the addition. Considering all the above facts it would be fair and reasonable to restrict the disallowance to 3.00 of the expenses claimed based on disallowance made in past years in the assessments completed u/s 148/143(3). Therefore, the addition, made by the A.O. amounting to Rs. 9,12,873/ - (Rs. 3,04,29, 100 x 0.03) is confirmed. The appellant will get the relief of Rs. 2,95,16,227/-. There....
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....ustained by Ld. CIT(A) at Rs. 9,12,873/- is merely based on the addition made during assessments of preceding years. Had it been a legal issue this would have been different but being a factual matter such disallowance on adhoc basis should be avoided unless and until supported by evidence and proper finding. 20. We therefore in the given facts and circumstances of the case are of the considered view that no disallowance of purchase from the sister concern at Rs. 3,04,29,100/- was called for. The finding of Ld. Cit(A) is set aside to the extent of sustaining the disallowance of purchase at Rs. 9,12,873/-. In the result total disallowance for Rs. 3,04,29,100/- is deleted. Ground No.3 raised by the assessee is allowed and that of Ground No.3 raised by the Revenue is dismissed. 21. Now we take up the fourth issue relating to training expenses incurred by the assessee at Rs. 8,14,42,700/-. During the year following amount was paid/due to be paid to the following concerns towards training expenses incurred during the year:- Name of the sister concern Amount paid (in Rs) AISECT Bhopal 3,28,27,000 Sect Info tech Ltd 1,43,15,100 SECT 1,75,94,600 SECT Pvt....
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....e revenue received from the assessee is part of the income which is taxed at the same rate as that applicable to the assessee. SECT is an approved corporate agent for LIC. 27. We also observe that the above stated facts were considered by Ld. CIT(A) who scaled down the disallowance to Rs. 40,72,135/- and that too of adhoc in nature observing as follows:- 15. Ground No. 6:- Through this ground of appeal the appellant has challenged the addition of Rs. 8,14,42,700/-. During the year the assessee has incurred an expense of Rs. 8,20,31,006/- under the head "Training Expenses" out of which payments of Rs. 8,14,42,700/- was found to have been made to associate concerns which also included payments made to societies enjoying exemption ix] s 12AA of the Act. The AO also observed that the assessee has failed to provide the details of the training and justification of the work done. The assessee also failed to furnish any agreement/MOU with the sister concerns. The AO also observed that the assessee failed to provide details of the faculty involved in the process of imparting training to the students. On verification of the details of the students to whom training was pr....
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....iversity Grant Commission which itself establishes that it has adequate faculty to provide training to the students. The assessee has submitted the copy of Form 26AS and II'R of Sect Infotech P Ltd and Significant Electronics and Computer Technology P Ltd which establishes that these entities are registered with IRDA and LIC for providing training to students in the field of insurance and for appointment of agents and the availability of faculty cannot be questioned. As regards SECT society it is observed that' the society is colleges for various courses and in that case also availability of faculty is established. The AO has also mentioned that the assessee has failed to provide the details of the students trained who were placed n the banking and insurance sector. In this regards the submission of the assessee that it has provided training to the students and whether -subsequently the student got selected or not was outside their purview also carries weight. It is further seen that the assessee has received Rs. 10,84,66,946/ - from AISECT University for providing training to students of various streams(which is included in the fees received by the assessee and is....
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.... case are of the considered view that the expenditure incurred towards training expenses at Rs. 8,14,42,700/- are genuine and has been rightly incurred in the interest of business and thus no disallowance was called for. Accordingly finding of Ld. CIT(A) is confirmed to the extent of deleting the addition of Rs. 7,73,70,565/- and the finding of Ld. CIT(A) is set aside confirming the disallowance of Rs. 40,72,135/-. Thus the assessee has rightly claimed the deduction for training expenses at Rs. 8,14,42,700/-. Thus Ground No.4 of the assessee appeal is allowed and that of Ground No.4 of Revenue's appeal stands dismissed. 29. Accordingly assessee's appeal for Assessment Year 2013-14 is allowed and that of Revenue is dismissed. 30. Now we take up the Cross Appeals for Assessment Year 2015- 16. Brief facts of these appeals are that a survey operation u/s 133A of the Act was carried out on 9.10.2015 at the premises of the assessee. During survey Shri Santosh Choubey, Chairman of the company accepted the discrepancy in purchase of books and agreed to surrender Rs. 23 crores. This statement was retracted on 10.11.2015 contending that no bogus purchase are made. Ereturn of income fil....
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....sions and the paper book running from page No.1 to 469. Main contention of the Ld. Counsel for the assessee was that the surrender made during the course of survey was retracted within a short duration of two months once the assessee was satisfied that all the purchase are genuine. Since the statement given during the course of survey has no evidentiary value and nothing incriminating was found during the course of survey and also during the assessment proceedings Ld.A.O has not made the addition referring to any incriminating material or any other evidence gathered during the course of survey and the disallowance of purchase is purely based on a statement given during the course of survey u/s 133A of the Act. Written submissions of the Ld. Counsel for the assessee are reproduced below:- A survey was conducted in the case of the assessee on 09-10- 2015/10.10.2015. During the course of survey statement of the Mr. Santosh Choubey, the Managing Director of the assessee was recorded u/s 133A on 10.10.2015. In the statement question was raised by the survey team regarding purchase of books made by the assessee company which was duly responded on behalf of the assessee ....
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....being provided by the survey team and any opportunity to verify the books with the alleged incriminating record. Further the assessee had not accepted that the purchases are inflated or the suppliers are not traceable as would be obvious from the statement itself. The Director stated that- "However it is quite possible that some of these parties may not be available at the given address and I may not be able to prove the genuineness of the purchase to the satisfaction of the department". a. The copy of the statement of the director of the assessee company was provided to the counsel of the assessee on 20.10.2015 and was received by the assessee on 21.10.2015. The contents of the statement were verified with the books of accounts and other material available and it was found that the purchase of books under consideration did not disclose any inflated purchases or understatement of income and accordingly the counsel of the assessee appeared before the AO on 29.10.2015 and informed the AO that the assessee has not concealed any income and hence has retracted the statement given u/s 133A. The AO however advised that the retraction should be filed through an a....
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....part of the seized records. Photocopy of seized record along with books of accounts were also produced for ready reference. viii. Copy of audited financial statements, and ITR of Utsav Collection, Vinayak Prakashan, Maa Durga Book Centre, Patel books, Saraswati Agencies, which are the parties mentioned in the statement recorded u/s 133A from whom the alleged bogus purchases were made. ix. Copy of sales tax orders of the aforesaid entities duly confirming the purchase/sales made by suppliers. x. Copy of sales tax order of the assessee company duly confirming the sale of the assessee. xi. Names of all the suppliers, address of the suppliers, name of the contact persons, their telephone Number along with documentary proof of the address. xii. Bank statement of the assessee from where the payments were made for the books purchased by the assessee. It may be submitted that all the payments for purchase were made by the assessee through account payee cheque xiii. Bank statement of the suppliers of the books wherein the payments received by them from the assessee were deposited was also obtained from the respective suppliers a....
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....was also informed that the books purchased of Rs. 43.53 crore under reference are already sold for Rs. 44.51crore to the associate concerns and are included in the total sales of books made by the assessee at Rs. 61.01 crore. Quantitative reconciliation of the books purchased and sold was furnished in the manner desired by the AO. Details of purchase of Rs. 43.53 crore (pg. 95-107 of PB) and sale of Rs. 44.51 crore (Pg109-119 of PB) were also produced for verification to substantiate that the books purchase under consideration has been sold. The sales made by the assessee have not been doubted by the AO. 5. Submission were also made with reference to various deficiencies noticed by the AO in the statement recorded u/s 133A explaining the reason why they cannot be considered as reason for holding the purchase as non genuine. However all the submissions made by the assessee and the fact that the books have also been sold were ignored by the AO and addition were made after making the following observations: a. The above parties have taken TIN from sales tax department of Madhya Pradesh after making such sales to the assessee In this regard it is sub....
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.... The assessee had made payment to the suppliers for purchase of books. These suppliers have also made payments to entities from whom they have procured the books which in some cases happened to be the associated concerns of the assessee. However no negative inference can be drawn from this fact as the books purchased and sold by the assessee is duly accounted and explained as detailed above. e. All the creditors shown to have made only the requisite sale from Assessee Company and not from others except nominal. This observation of the AO only confirms that the purchase made by the assessee is duly confirmed by the suppliers and does not make out any reason to suspect the genuineness of the purchases. f. The assessee specifically surrendered income of Rs. 23 crore. The assessee was put under tremendous pressure by the survey team and was made to believe that the suppliers were not traceable and consequently the genuineness of the purchase is not established and consequently he should make a declaration. No opportunity was provided to him to verify the correctness of the information being given to him and to verify his records. Further the....
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....ot available at the last known address, there was no way the assessee could have presented these suppliers before the AO. Under the circumstances the assessee had no option but to express its inability to produce the suppliers. However subsequently the assessee had made enquiries and has found out the addresses of the suppliers, the details of which were duly furnished before the AO during the assessment proceedings. Copies of proof of address like Aadhar Card, Rent agreement, bank pass book were also furnished. The AO was also specifically informed that the suppliers can be produced for examination of the AO should he so desire. Thus no negative inference regarding the genuineness of purchase could have been drawn from this observation. i. The assessee was confronted with the fact that the amount paid to the parties for purchases made are coming back from such parties to the assessee's other concern. The assessee had made payment to the suppliers for purchase of books. These suppliers have also made payments to entities from whom they have procured the books which in some cases happened to be the associated concerns of the asse....
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.... was passed and the question being addressed by the court were distinctly different from the case of the assessee 2. Rakesh Mahajan V CIT (2008) 214 CTR 218 judgment date 24.09.07. In this case the statement was given in contemplation of death and it was held by the court that a person expecting to die will have no fear and will not give a false statement. Further a opportunity was provided to the person to negate the contents which he failed to negate. Thus the facts of that case are also not having any relevance to the case of the assessee. The ld. A.O. did not accept the contention of the assessee as indicated above. Merely on the basis of declaration made in the statement recorded u/s 133A, he concluded that Rs. 23 crores is an undisclosed income of the assessee. After considering all submissions the ld. CIT(A) allowed the assessee's appeal. The ld. CIT(A) discussed all the submissions made before him and held in para 11 pg.29 that during the survey, no incriminating material or undisclosed income or investment were found. It is stated by the appellant that under the mental pressure, the amount of 23 crores was surrendered. It is und....
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....n the account of assessee and credited in the Bank Account of sellers, had discharged its primary onus, thereafter the onus shifted on the department to rebut the same. Addition under section 69C was held to be not justified. CIT v. Nikunj Eximp Enterprises (P.) Ltd. (2013) 216 Taxman 171 (Mag.) (Bom.)(HC) Sale to government department-Alleged bogus purchases- Sales not doubted, merely because suppliers not appeared before the Assessing Officer or Commissioner (Appeals), purchases cannot be disallowed. DCIT v Shri. Kanakmal Sanghavi (2006) 6 ITJ 760(Indore) "Examination on oath- amount surrendered during survey proceedings later on retracted- material produced to justify the claim- HELD- It is well settled that admission may be relevant and is an important evidence but is not conclusive and may be proved to be untrue or having been made under mistake of facts or law-retraction of disclosure is therefore valid." Ground No.2Deletion of addition of Rs. 3,16,358/-. The ld. A.O. had disallowed interest of Rs. 3,16,358/- on the ground that the assessee has advanced interest free loan of Rs. 95,44,174/-. The said interest is p....
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....cess to its computer system and survey team merely informed that suppliers of the assessee are not traceable at the address appearing in the invoices and purchases are bogus. Under these circumstances, the assessee has claimed that the statement was given under duress and tremendous pressure. The copy of the statement was given on 21.10.2015. Retraction statement with an affidavit was prepared within a short span of 2 weeks on 7.11.2015 and filed before the Ld. A.O on 10.11.2015 submitting that the surrender of Rs. 23 crores made during the course of survey is retracted as all the purchases recorded in the books are genuine. 36. We further note that during the course of assessment proceedings detailed submissions were made to explain the genuineness of purchases and to substantiate the same has filed leger account of purchase of books corresponding to sale, bill wise details of purchase along with quantity, audited financial statements and Income Tax Return of the vendors, copy of Sales Tax orders of these entities from whom assessee purchased. Assessee has also provided the details of contact person and telephone number and bank account details of all the suppliers. The purc....
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....ring the assessment proceedings the appellant has also submitted the copy of ITR, financial statements, Bank statements of the suppliers, copy of sales tax order/returns of the suppliers. It is evidenced from the bank statement of the Suppliers that all the payments made by the appellant are duly received by them. Further the sale reported by the suppliers is either equal to or more than the purchases shown by the appellant from the respective supplier. It is noted that in most of the cases the accounts are audited under the Income Tax act and ITR IS furnished. No material is brought on record by the AO to substantiate that the sale shown by these suppliers in their ITR/sales tax return have been questioned/doubted by any of the authorities. No cash is found withdrawn in the bank accounts of any of the suppliers which may create doubt about the end Use of the funds in the hands of the suppliers. The AO had not doubted the correctness or genuineness of any of the documents submitted. iii. Copy of bank statement of the appellant wherein all payments made to the suppliers are found to have been made through account payee cheques. iv. Invoice wise details of purchase ....
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.... these facts establish the genuineness of the purchases beyond doubt. 2. The A.O has however raised doubt about the genuineness of the purchase on the basis of various observation which are discussed herein below: i. The A.O has stated that the notices issued to the suppliers returned un served. However in view of the fact that the appellant had claimed that the notices were sent to incorrect address and have submitted the address proof/telephone numbers and have also submitted all the details required by the AO in the notice issued and the AO have not doubted the correctness and genuineness of the information submitted. It is also seen that the appellant during the assessment proceedings have offered that the suppliers can be produced before the AO. Reference is made to the written submissions dated 5.4.2017 in Para l.f.a wherein it is mentioned that "the appellant has already provided the complete details of the suppliers and is prepared to produce them before you if you so direct» Under the circumstances no adverse inference was warranted for non serving of the notices. ii. The A.O was also doubt full of the genuineness of the purchase a....
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....ppellant and the transactions are done through banking channels. The initial onus casted upon the appellant to establish the genuineness of the transaction stands discharged. I have also gone through the various judgmenu, relied upon by the appellant. a. In the case of ACIT v. Kishan Lal Jewels (P.) Ltd. (2012) 147 TTJ 308 (Del.) (Trib.) it was held by the Tribunal that in case where the appellant while furnishing necessary information regarding the transactions and the aforesaid parties like purchase bills issued against goods purchased) sales- tax registration numbers of the parties} PANs} their confirmations and Bank statements showing the debit of the amount paid through Account payee Cheques to them in the account of appellant and credited in the Bank Account of sellers} had discharged its primary onus} thereafter the onus shifted on the department to rebut the same. The facts of the case are squarely applicable to the case of the appellant as the appellant has also furnished the all the details of the transaction including the purchase bills, sales tax return/ order, ITR and bank statements. b. In the case of CIT v. Nikunj Eximp Enterprises....
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....nses of Rs. 23.00 crores which may have been inflated in the books of accounts. I offer additional income for A. Y 15-16 and as I have already filed the return of income for A. Y 15-16, I will file revised return declaring the additional income by 31.12.2015 after paying full taxes on the additional income declared. Today I am paying tax of Rs. 40.00 laks online. It is observed that in the statement recorded, the appellant had not accepted that the purchases are inflated or the suppliers are not traceable as is noted from the statement itself wherein it is mentioned by the Director that "However it is quite possible that some of these parties may not be available at the given address and I may not be able to prove the genuineness of the purchase to the satisfaction of the department". On the facts it cannot be said that the appellant accepted any transaction as non genuine. It is also seen that genuineness of the purchases were also doubted as no transportation expenses were found to have been incurred. The appellant has explained that the books were purchased by the suppliers from various concerns at the office site of the appellant and were con....
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....herein it was held by the court that Section 133A does not empower any IT authority to examine any person on oath, hence, any such statement has no evidentiary value and any admission made during such statement cannot, by itself, be made the basis for addition. The Hon'ble ITAT, Indore while deciding the appeals of Shri Sudeep Maheshwari in ITA No. 524/lnd/2013 and 299/lnd/2017 for A.Y. 2010-11 and A.Y. 2008-09 dated 13.02.2019 held as under:- "It is the case of the assessee that during the course of search & seizure, no incriminating material or undisclosed income or investments were found. It is stated that the assessee was under mental pressure and tired. Therefore, to buy peace of mind, he accepted and declared Rs. 3 crores in personal name. It is also stated that the case laws as relied by the A.o. are not applicable on the facts of the present case. The assessee has relied on the decision of the Hon'ble Supreme Court rendered in the case of Pullangode Rubber Produce Co. Ltd. 91 ITR 18 (SC), wherein the Hon'ble Court has held that admission cannot be said that it is conclusive. Retraction from admission was permissible in law and it was o....
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....port the statement. The A.O. failed to bring any material which supports the contents of the statement. The A.O. failed to correlate the disclosure made with the incriminating material gathered during the survey. Therefore, the addition made by the A.O. amounting to Rs. 23,00,00,000/- is Deleted. Therefore, the appeal on this ground is Allowed. 38. The above finding of Ld. CIT(A) is well supported by settled judicial precedents of which few of the decision are of this Tribunal also wherein it has been consistently held that if the Ld. A.O fails to corroborate the disclosures made in the statement given during the course of survey with the incriminating material gathered during the course of such survey, additions cannot be made purely on the basis of statement. Hon'ble Apex Court in the case of CIT v/s S Khader Khan Son (supra) has specifically held with regard to survey action u/s 133A of the Act that "Section 133A does not empower any IT authority to examine any person on oath, hence, any such statement has no evidentiary value and any admission made during such statement cannot, by itself, be made the basis for addition". Hon'ble Delhi High Court in the case of Mahes....
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....y the seller of the goods for the acquisition of which it has already incurred the cost. It is the realisation of excess over the cost incurred that only forms part of the profit included in the consideration of sales". 41. So when the Ld. A.O had accepted the sales then he ought to have given the benefit of purchase against the sales. Without rejecting the book results and without finding anything contrary to the claim of the assessee and not referring to any incriminating material found during the course of survey the addition for income offered to tax during the course of survey at Rs. 23 crores but retracted soon, was thus uncalled for. We therefore in the given facts and circumstances of the case and respectfully following the judgments/decisions stated herein above fail to find any inconsistency in the finding of Ld. CIT(A) deleting the addition of Rs. 23 crores made by the Ld. A.O made purely on the basis of statement given u/s 133A of the Act. Accordingly Ground No.1 of revenue stands dismissed. 42. As regards Ground No.2 of the Revenue's appeal relating to deletion of disallowance of interest expenses at Rs. 3,16,358/-, perusal of records shows that this amount was p....