TaxTMI 
TaxTMI 
2021 (11) TMI 361
X X X X Extracts X X X X
X X X X Extracts X X X X
....mounting to Rs. 16,79,981/- by holding that no event had taken place in the year under consideration to indicate remission or cessation of liabilities, without appreciating the fact that sundry creditors reflected in the Balance sheet of the assessee reveals certain amounts outstanding were not even paid back partly to the creditors"? (3) "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in directing the A.O, to restrict the addition of bogus purchases to 12.5% as against 100% addition made by the Assessing Officer on account bogus purchases without appreciating the fact that parties from whom these purchases were made proven accommodation entry providers, as concluded by Sales Tax Authorities pursuant to the investigation carried out by them"? (4) "Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not considering the latest Apex Court decision in the case of N.K.Proteins Ltd Vs DCIT (769 OF 2017) , wherein the Hon'ble Supreme Court has confirmed 100% addition made on account of bogus purchases ? (5) The appellant prays that the order of Ld. CIT (A) on the above grounds be revers....
X X X X Extracts X X X X
X X X X Extracts X X X X
....year for one unit is calculated at Rs. 24,08,787 (Rs. 2,89,05,446/12)and the cost of one unit comes to Rs. 2,88,80,039/-(2,64,71,252 + 24,08,787). The Appellant had sold one unit for total sales consideration of Rs. 3,01,00,000/- but had not offered any profit for taxation. Therefore, profit from sale Q^ys44p this year comes to Rs. 12,19,961/- and same is added to the total income of the Appellant. The appellant has completed its project and received the payment, he has no risk whatsoever of loss in future. All significant risk and rewards of ownership are also considered to be transferred as per guidance note on recognition of revenue by real estate developers. The builders risk is over when project is complete and payment is received." 5. Upon assessee's appeal Ld.CIT(A) deleted i. The actual profit has been arrived in respect of the said project in AY 2013-14 which is Rs. 2,58,52,940, The same is on record of the AO. Thus, calculation of profit on presumption is erroneous. ii. The AO has not rejected the books of account. When the books of accounts are found to be properly maintained, the figure of profit cannot be varied on basis of bold estimates. iii. Further, the AO h....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... outstanding, it appears that there is absolutely no liability on part of the appellant to pay back the said amount. The amount is just lying idle in the books of accounts as liability. The amount of Rs. 16,79,981/- was disallowed u/s. 41(1) of the Act treating the same as cessation of liability. 9. Upon assessee's appeal Ld.CIT(A) deleted "No event had taken place in the year under consideration to indicate remission or cessation of the liabilities in question, the provisions of section 41(1) could not have been invoked. The Appellant has been recognising the said amount in its books of accounts till date. The same has also been observed by the AO in his assessment order as mentioned above. In view of above facts of the case and respectfully following the decisions relied upon by the Appellant the disallowance made by AO u/s 41(1) of the Act is deleted and the ground of appeal is 'Allowed'." 10. Against the above order assessee is in appeal before us. 11. I have heard both the parties and perused the record. I find that AO has invoked the provision of section 41(1) without bringing on record any cogent material. For how long the account is outstanding and on what basi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llant's regular course of business. On the other hand, the AO has not brought on record any documents / statement / information / report of the Sales Tax Department which categorically states that these parties have provided bogus bills to the Appellant. As per the investigations carried out by the Sales Tax Authorities, the aforementioned parties were found to be involved in giving accommodation entries only without actually supplying the goods. The logical inference is that the purchases made by the appellant would also be in the nature of accommodation entries only. To verify the same, the AO had made enquiries by issuing notices u/s 133(6) which were returned unserved by the postal authorities. This party was found to be non existent at the address given by the appellant. The appellant also failed to provide the latest address of the party. During the scrutiny assessment the appellant furnished details of purchases and corresponding sales. However, the appellant could not produce the party before the AO in spite of opportunity being given. The appellant also failed to produce delivery challans or transportation details. The onus of proving the genuineness of such purchases ....