TaxTMI 
TaxTMI 
TaxTMI 
2021 (9) TMI 888
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....hat the addition was made on the basis of information received from DGIT(Inv.) with regard to bogus purchase made by the assessee from dealers without actual supply of goods? C. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in not considering that the assessee could not prove the genuineness and creditworthiness of purchase transactions during the course of assessment proceedings? D. Whether on the facts and circumstances of the case and in Law, the Ld. CIT (A) has erred by not appreciating that onus to justify the claim of expenses is on the assessee and he has failed to discharge it in relation to the purchases made from the non credible vendors? E. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) was correct in not considering the decision of Hon'ble Apex Court in the case of N K Proteins Ltd. vs. DCIT in SLP (Civil) No. 769/2017 dated 16.01.2017 wherein the Court has held that when the purchases are from bogus suppliers the entire purchases are liable to be disallowed. F. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in deleting ad....
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....ed books u/s 145(3). The assessee reflected Gross Profit (GP) Rate of 4.05% in this year as against GP rate of 5.17% in immediately preceding year. Therefore, the additions were estimated @1.12% against these purchases. The assessee must have paid commission to procure these entries which was estimated @2%. Finally, an addition of Rs. 75.22 Lacs was made in the hands of the assessee on account of unproved purchases. 4.4 The second addition was u/s 68 since the assessee had outstanding loans of Rs. 805.01 Lacs at year-end against seven entities as detailed in para 5.1 of the order. These entities were allegedly being run by accommodation entry provider Shri Gautam Jain who was subjected to search proceedings. In the recorded statement, it was admitted that the group provided accommodation entries as per the requests of the parties. Few of the parties were allegedly being run by another entry provider Shri Bhanwarlal Jain wherein similar admissions were made. The summons issued to the parties remains un-responded and the assessee failed to produce the parties. Consequently, in terms of ratio of various judicial pronouncements, the unsecured loans of Rs. 795 Lacs as taken from seven ....
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....considered the submissions of the appellant, perused the assessment order, material on record and duly considered the factual matrix of the case and the legal provisions applicable to the facts of the case. On careful perusal of the balance sheet for the year ended on 31.03.2014 relevant to A.Y. 2014-15 of the appellant, it is seen that no outstanding balances in the name of the above-mentioned parties are reflected in the Balance Sheet which is in conformity with the submission of the appellant that the said funds were borrowed during the impugned assessment year for short duration and the loans were repaid within the same financial year relevant to the assessment year under consideration. Further, as per annexure No.6 to Clause 31 (a) of Audit Report dated 29.11.2014 for the year ended on 31.03.2014 relevant to A.Y. 2014-15, all the aforesaid loans are certified by the auditor to have been taken and repaid by the appellant during the instant assessment year. This is also evident from the bank statements of the appellant as well as of the aforesaid loan creditors. I have observed that there are credit and debit entries in the bank statement of the appellant as well as in the bank ....
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....ogus unsecured loan entries through the business concerns floated by him to the parties as per their requirements and that such companies, M/s. Marine Gems Pvt. Ltd. and M/s. Rajat Diamond Exim Pvt. Ltd. advanced loans amounting to Rs. 10,00,000/-and Rs. 35,00,00,000/- respectively to the assessee issued summons u/s. 131 of the I.T. Act to the above parties and others mentioned at Sr. No. 4 to 7 through Commission to his counterpart in Surat. From the perusal of report dated 29.12.2016, sent by the AO's counterpart from Surat, the AO learnt that the Inspector deputed to serve the notice u/s.131 found the given premises closed and the local enquiries made revealed that no business was ever running from that place and that the said parties do not exist at the given address and are not traceable and nobody had heard any time anything about them. Based on the above, the AO vide order sheet entry dated 29.12.2016 asked the appellant to produce the parties on 30.12.2016 which was not complied with. The appellant expressed inability to produce the parties who are based in Surat within such a short duration. Thus, the conclusion drawn by the AO that the genuineness of loan transaction,....
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....idence by way of bank record to show that loan had been received from a creditor through banking channels. The creditor was not physically traceable, as much time had elapsed and his address had changed. The assessment had been reopened on the basis of third party evidence collected in a search action in the case of a charitable trust. Despite specific request in this regard, the Assessing Officer concerned did not provide to H R Mehta a copy of the appraisal report & third party statement etc. and proceeded to treat the loan as unexplained. The Hon'ble High Court struck down the order of reassessment by observing that revenue was not justified in making the addition without having first giving the assessee an opportunity to cross examine the deponents on the statements relied upon by the ACIT. 8.4.7 Hence, it is to be inferred that in a case where the assessee has supplied all possible information to the Assessing Officer to explain the credit transaction, he has satisfactorily discharged the burden cast on him and it would be for the revenue to prove that the transaction is not satisfactorily explained and provisions of section 68 of the Act are applicable. In the case befo....
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....ved as aforesaid the revenue is in further appeal before us. Our findings and Adjudication 6. So far as the addition on account of suspicious purchase is concerned, upon perusal of impugned order, it could be gathered that Ld. AO could not point out any discrepancies in assessee's documentary evidences. The time allotted to the assessee to produce the parties was inadequate. However, during assessment / remand proceedings, the assessee furnished copies of sale & purchases invoices, confirmation of accounts, affidavits of the suppliers, Income Tax Returns of the suppliers, bank statements, and statements of on-to-one mapping of the purchases with corresponding sales. Notices issued u/s 133(6) during remand proceedings were duly responded to by the suppliers along with documentary evidences as desired by Ld. AO. Further, there was no adverse remark in the remand report regarding the authenticity of documents submitted by the assessee as well as by the suppliers. The three suppliers were well in existence as on-going business concerns. Therefore, the assessee, in our considered opinion, had duly substantiated the purchases transactions and the additions have rightly been deleted by ....