TaxTMI 
TaxTMI 
2022 (3) TMI 67
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....ed its return of income on 25.09.2012 declaring income of Rs. 58,04,170/-. The return was duly processed under section 143(1) determining at the returned income. 2.2. A search under section 132 of the Act was conducted on 28.02.2017 at the business premises of the assessee at various premises from where certain papers/ documents belonging to the assessee were found and seized. In response to notice under section 153A of the I.T. Act, 1961 the assessee filed its return of income on 26.07.2018 declaring income of Rs. 58,04,170/-. 2.3. During the course of assessment proceedings, the A.O. noted that the assessee company has received an unsecured loan of Rs. 10,00,000/- from M/s White Collar Management Service Pvt. Ltd., He asked the assessee to furnish ITR, bank statement highlighting the transaction and confirmed copy of ledger from White Collar Management Service Pvt Ltd for the A.Y. 2012-13 in order to prove the identification, genuineness and creditworthiness. He also asked the assessee to produce the principle officer of M/s White Collar Management Service Pvt. Ltd. 2.4. Since the assessee could not produce the principle officer/director of M/s White Collar Management Se....
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.... 27. He further noted that a search and seizure action was carried out on 13.04.2017 in the case of Mr. Himanshu Verma (Entry Operator) who is maintaining approx. 300 shell companies/concerns for providing accommodation entries in lieu of commission. During the course of search in the case of Mr. Himanshu Verma on 13.04.2017, statement on oath of Mr. Himanshu Verma was recorded under section 132(4) of Income Tax Act. 1961 and he was asked about his modus operandi for providing accommodation entries. He admitted that he provides bogus bills/entry of loans/capital to the beneficiaries and after rotating the amount received from the beneficiary in some of his bogus companies, he ultimately transfers the amount to its beneficiary. 2.8. The A.O. also referred to the statement of Mr. Shree Ram Yadav (dummy director) recorded under section 131(1A) wherein he admitted that he had been a dummy director in a number of bogus companies managed by Mr. Himanshu Verma. He further stated that he was getting Rs. 10,000/- per month for being the director in these companies. He admitted that he had been made director by Mr. Himanshu Verma in various companies totaling to 20 in number. 2.9. I....
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....e regarding genuineness of the transaction. Moreover, the mode of transaction is cash. Further, the assessee could not tally this transaction with its books of account. Therefore, he made an addition of Rs. 4,25,975/- as unexplained expenditure under section 69C of the I.T. Act, 1961. 2.14. During the course of assessment proceedings, the A.O. noted that the assessee company has shown purchases of Rs. 5,34,76,626/- from the following parties during the year under consideration. Party Name Amount Delite Trading Co. 18,82,671 Ganesh Enterprises 19,65,386 Hans Trading Co 52,47,430 India Sales Corporation 68,88,893 Jai Shiv Enterprises 20,07,523 Luxmi Lubricants 1,05,53,090 Narika Enterprises 63,32,048 Navyug Enterprises 27,71,646 Rama Enterprises 1,42,26,757 Shree Shyam Enterprises 16,11,182 Total Purchases 5,34,76,626 2.15. He noted that during the search proceedings original vouchers/ bills of various concerns at premise 17/6. Hanspal Industrial Complex, Mathura Road, Faridabad were found and seized. Purchase parties namely M/s Jai Shiv enterprise. Delite Trading Co, And Ganesh Enterprises are connected wi....
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....t be served by the Ward Inspector who was deputed to serve the same. He, therefore, asked the assessee to explain as to why the purchases made from the above parties amounting to Rs. 5,34,76,626/- should not be treated as bogus and added to the total income of the assessee. 2.17. It was explained by the assessee that it had purchased the material from grey market. It has maintained stock register which tallies quantity wise and no discrepancy was found. Further, it had rendered services to the third parties. Actual stock was also found during the course of search and survey proceedings. It was submitted that no undisclosed asset or wealth relating to the assessee or any of the directors or family members were found. It was argued that the concession of Rs. 18.5 cores made by the assessee during the search operation was wrongly treated as surrender of ingenuine purchases by the department. Relying on various decisions, it was argued that no addition is called for. 2.18. However, the AO was not satisfied with the arguments advanced by the assessee. He noted that the assessee itself has admitted that it has purchased the material from grey market. He was of the opinion that mere....
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....4 5 2017-18 1,05,98,837 2,33,174 3. Before the Ld. CIT(A), the assessee apart from challenging the addition on merit, challenged the validity of the assessment in absence of any incriminating material. However, the Ld. CIT(A) was not satisfied with the argument against the validity of the assessment and rejected the same. So far as addition of Rs. 10,00,000/- being loan from White Collar Management Services (P.) Ltd. is concerned, he upheld the same by observing as under:- "6.1 Vide ground Nos. 4, 5, 6 and 7, the appellant has contested the action of the AO in terms of making the addition of Rs. 10,00,000/- u/s 68 by treating the loan of Rs. 10,00,000/- received from M/s. White Collar Management Services Pvt. Ltd. (Now known as M/s. Mayurika Management Services Pvt. Ltd.) and disallowing the deduction of Rs. 55,726/- on account of interest on these loans. 6.2 The contention of the AR was that the loans were received through banking channels and were repaid. The TDS was deducted on the interest payment. The AR also stated that the AO has relied upon the statement of Sh. Himanshu Verma but Himanshu Verma only stated that he was providing bills for bog....
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....ubt are artificial or juristic persons but they are soulless and are dependent upon the individuals behind them who run and manage the said companies. It is the persons behind the company who take the decisions, controls and manage them.''{ref. Para 30} 6.5 Hon'ble Delhi HC in case of CIT Vs. Nova Promoters & Finlease (P) Ltd. [2012] 18 taxmann.com 217 (Delhi) quoted from its earlier judgments as under, "....there cannot be two opinions on the aspect that the pernicious practice of conversion of unaccounted money through the masquerade or channel of investment as share capital must be firmly excoriated by the Revenue "{ref. Para 36}. 6.6 This is also a case of pernicious practice of conversion of unaccounted money through the masquerade or channel of obtaining (bogus) loan. 6.7 Hon'ble Delhi HC in case of CIT Vs. Navodaya Castles (P.) Ltd. [2014] 50 taxmann.com 110 (Delhi) has held, " Certificate of incorporation, PAN etc., are relevant for purpose of identification, but have their limitation when there is evidence and material to show that the subscriber was a paper company and not a genuine investor." {ref. Para 14}. ....
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....ing Co. 18,82,671 Ganesh Enterprises 19,65,386 Hans Trading Co 52,47,430 India Sales Corporation 68,88,893 Jai Shiv Enterprises 20,07,523 Luxmi Lubricants 1,05,53,090 Narika Enterprises 63,32,048 Navyug Enterprises 27,71,646 Rama Enterprises 1,42,26,757 Shree Shyam Enterprises 16,11,182 Total Purchases 5,34,76,626 8.2. During the present appellate proceedings, the main contentions of the AR were that i) The assessment order indicated that letters were served upon certain parties. This proved their existence. ii) The books of account were audited, iii) The appellant was using the purchase material for doing job work and there was quantitative tally of purchases with the quantities of the material consumed in job work. At any point of time, the total of quantities of opening stock and purchases tallied with total of quantities of the material consumed in job work and closing stock. iv) Payments have been made through banking channels, v) Vide written submission 22.05.2019, the AR produced copy of stock register showing retevant entries of the items received and issued ....
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.... bogus purchases only profit element embedded in such purchases is to be taxed but not total bogus purchases. The relevant portion of the order of ITAT of ITAT Mumbai in case of M/s. Technotrade Impex India Pvt. Ltd. Vs. ACIT - 13(3)(2) in C.O.Nos.158 & 160/MUM/2017 [ARISING OUT OF ITA N0.5383 & 5382/MUM/2016] is reproduced as under: "6. On appeal the Ld. CIT(A) on examination of the submissions, evidences furnished before the Assessing Officer as well as before him and guided by the ratio of Hon'ble Gujarat High Court in the case of CIT v. Simit P. Seth [356 ITR 451] held that when the total sales are accepted by the Assessing Officer then the entire purchases cannot be added to the income of the assessee. Therefore, in view of the decision of the Hon'ble Gujarat High Court he held that only the fair profit ratio would be added back to the income of the assessee. Further Ld.CIT(A) also stated that similar basis was adopted in the case of Shri Kishore Kumar Agarwal for A.Y. 2011-12 and Shri Bimal Agarwal for A.Y. 2010-11 on identical and similar facts as that of the present case as both of them are the persons concerned or connected to the assessee's group. He ....
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....utside the books of account nor pointed out any discrepancy in the Books of Accounts of the assessee. Therefore, we are of the considered view that merely on the basis of third party statement and also on the basis of notices issue u/s. 133(6), an adverse inference cannot be drawn about the purchases and the assessee has filed complete details of purchases. When however, the fact remains that the parties are appearing in the list prepared by the Sales Tax Department as suspicious/hawala operators indulging in providing accommodation entries has not been controverted by the assessee with necessary evidence. Though the assessee has filed purchase bills and payment proof for such purchases, in the backdrop of clear cut finding of the Sales Tax Department the purchases from the above parties cannot be considered as genuine in total. In these circumstances, one has to see what needs to be considered, whether it is the entire purchases from the above parties to be added because they are bogus in nature or only the profit element embedded in such purchases could be added. The issue is no longer res integra. The Hon'ble Gujarat High Court in the case of CIT Vs. Simit P. Sheth (supra) h....
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....he Revenue are rejected. 9. As we have sustained the order of the Ld.CIT(A) the contention of the assessee in the cross objections that there should not have been any addition is rejected and the grounds raised in the cross objection are dismissed. 10. In the result, appeals of the Revenue and cross objections of the assessee are dismissed." 8.8 In the present case, letters issued u/s 133(6) were received back, un-served because the parties are not existing at given address but inquiries have confirmed that some of these parties were existing at the given addresses. Since, the books of accounts are audited and stock has been tallied which is evident from the fact that in-spite of noticing shortage in stock, at the time of survey, no addition has been made on that account. Therefore, the argument of the AR that discrepancy in stock was explained cannot be brushed aside. At the most question can be raised about the rate of purchase. 8.9 I have also observed that the AO has added 25% of bogus purchases stating as under. "8.20 Hon'ble Gujrat High Court in its judgment dated 09-12-2014 in the case of Vijay Protein Limited vs CIT [appeal N....
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....rch or pre-search enquiries, like the statements of S/Shri Dalip Kumar, Vikas Kumar and Ishwar Chand Agarwal etc. These concerns were also admittedly used for procuring bogus Bills, as per the statements recorded by Ms. Jyoti Bisht/Shri Vishnu Kumar Garg. 8.12 Therefore, the disallowance @ 25% is confirmed. However, in my considered opinion, ends of justice would meet if in case of purchases from any party in respect of which disallowance has been made and which were found to be located at the given address (by the Income Tax Inspector) and are not figuring adversely in any of the statements (including statements of Sh. Dalip Kumar/ Vikas Kumar /Ms. Jyoti Bisht/Vishnu Kumar Garg), the disallowance is restricted to 20% of the amount of such purchases. 8.13 In view of the above discussion, these grounds (Nos. 9-12) of the appeal are partly allowed. 3.2. So far as the addition of Rs. 2,94,121/- u/s 69C of the Act is concerned, the Ld. CIT(A) upheld the same by observing as under:- "9.1. Vide ground No. 13, the appellant has contested that the addition of Rs. 2,94,121/- was not maintainable on merits. 9.2. The action of the AO in terms of treating....
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....ect that if any addition is made under any section which requires separate treatment, including special rates, provisions of such section would have overriding effect. 10.3 In view of the above discussion, this ground (No. 14) of the appeal is partly allowed." 3.4. Aggrieved with such order of the ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds:- 1. Because the action for initiation/ continuation and conclusion of assessment proceedings u/s 153A at an amount of Rs. 2/08,99,150/- is being challenged on facts & law. 2. Because the action is being challenged on facts & law for making additions in assessment proceedings u/s 153A when there is no incriminating material/document found during the course of search u/s 132 of the Act for the impugned year. 3. Because the action is being challenged on facts & law for completing the assessment u/s 153A having returned wrong findings of fact & evidence qua the denial / retraction of the surrendered amount, which is even contested since the quantum and relatability of the amount to the impugned year is not according to the document and material. 4. Becaus....
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....dition on account of disallowance of purchases amounting Rs. 1,33,69,157/- (25% of purchases Rs. 5,34,76,626/-) on the basis of Honble supreme court in the case of Vijay Protein Ltd. whereas per assessee the facts of said case law is distinguishable and additionally in the alternative the quantum thereof too is being disputed. 12. Because the action is being challenged on facts and law for making addition on account of disallowance of purchases amounting Rs. 1,33,69,157/- on the basis that no stock details submitted whereas per assessee stock register was duly submitted before AO both quantitatively as well as qualitatively and the stock physically tallied with the books of account on the date of search. 13. Because the action is being challenged on facts and law for making addition of Rs. 1,33,69,157/-on account of disallowance of purchases considering whole purchases amounting Rs. 5,34,76,626/- as bogus purchases whereas per assessee documents in support of genuine purchases has been duly submitted and AO has verified the said parties too and additionally in the alternative the quantum thereof too is being disputed. 14. Because the action is being chall....
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....ries of loan to outside companies. He submitted that in the instant case, the assessee has received the loan through proper banking channel which was also repaid through proper banking channel after payment of interest and due taxes deducted from such interest. So far as the other statement is concerned i.e. the statement of Shri Ram Yadav, which was relied on by the Assessing Officer, he submitted that Mr. Ram Yadav was never a director in M/s White Collar Management Services Pvt. Ltd. Therefore, the statement of Mr. Ram Yadav has no evidentiary value for making the addition. The ld. Counsel for the assessee accordingly submitted that the addition made by the Assessing Officer and sustained by the Ld. CIT(A) should be deleted. 7. The ld. DR, on the other hand, heavily relied upon the order of the ld. CIT(A). He submitted that the assessee failed to substantiate with evidence to the satisfaction of the Assessing Officer regarding the genuineness of the said loan of Rs. 10 lakhs obtained from M/s White Collar Management Services Pvt. Ltd. Therefore, the Assessing Officer has rightly made the addition of Rs. 10 lakhs and disallowed the interest of Rs. 55,726/- and the Ld. CIT(A) h....
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...., has no evidentiary value. The list of the companies named by Shri Ram Yadav, which has been reproduced by the Assessing Officer at page-4 of the assessment order, nowhere shows that he was a director of M/s White Collar Management Services Pvt. Ltd. We further find, the assessee during the course of assessment proceedings has filed confirmation from the said party, copy of which is placed at page 192 of the paper book. The assessee has filed copy of ITR, coy of bank statement of the said party reflecting the receipt and payment of loan and balance sheet as on 31.03.2011 and Form-16 for TDS deducted on interest. Not a single document furnished by the assessee has been proved to be false or untrue by the lower authorities. Under these circumstances and in view of the overwhelming evidences filed by the assessee during the course of assessment proceedings, which are not found to be false or untrue, we hold that the Ld. CIT(A) is not justified in sustaining the addition of Rs. 10 lakh shown by the assessee as loan which has been repaid in the subsequent year and much before the date of search. Accordingly, the order of the Ld. CIT(A) is set-aside and ground of appeal 4, 5 and 6 are a....
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....erial will be used for the above job work. The ld. Counsel for the assessee submitted that the purchasers are bifurcated in to two parts, wherein part-I the material purchased & bills were issued by same vendor, payment to said parties were made through proper banking channel & open for verification and in Part-II, the purchase are made from the grey market vendors who have supplied the material alongwith undertaking the responsibility for giving the grey market material supported with bills and the vendors have issued the bills to the assessee for purchases by charging commission wherein the Sales Tax has been charged separately and the said amount has been retained by the vendor. He submitted that the list of vendors (part-I) having the address, TIN, PAN Nos. along with Income Tax return, audited balance sheet, etc. were already brought before the AO. He submitted that the list of billing grey market vendors having address for the impugned year is as under:- S. No. TIN No. Party Name Party Address Amount Documents attached. 1 06291214187 Shree Shyam Enterprises Plot No.2191, H.B. Colony, Sector-7A, Faridabad 1,611,182 1. ITRV for AY 2010-11 to ....
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....that in the absence of any corroborative evidence, purchases made by the assessee from Hawala dealers cannot be treated as bogus purchases and cannot be added to the total income of the assessee. 19. The Learned Counsel for the Assessee also relied upon the following decisions to the proposition that profit in such cases have been estimated between 0.5% to 2%. 1. Hon'ble IT AT, Mumbai Bench-G in the case of Sai lifestyles P. Ltd vs ACIT in ITA No. 4465, 4310, 4466, 4311, 4467/2010 dated 25.11.2011. 2. Hon'ble ITAT Mumbai Bench-H in the case of ACIT vs K.P. Sanghvi& Sons LLP in ITA No. 2455/2017 dated 28.09.2018. 3. Hon'ble ITAT Delhi Bench-G in the case of Aggarwal Associates (Promoters) Ltd. vs DCIT in ITA No. 787/2016 dated 09.07.2019. 4. Hon'ble ITAT Ahmedabad Bench-C in the case of Sonal Parekh vs ITO in ITA No. 91, 92 and 93 of 2017 dated 09.12.2019. 5. Hon'ble Bombay High Court in the case of PCIT vsRishabhdevTachnocable Ltd. in ITA No. 1330 of 2017 dated 10.02.2020. 6. Hon'ble Bombay High Court in the case of PCIT vs Pinaki D. Panani in ITA No. 1543 of 2017 dated 08.01.2020. 7. Hon'ble Bombay High Court Ju....
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....in case of parties who were located at the given address during the visit made by the Inspector and are not figuring adversely in any of the statements including the statement of Mr. Dalip Kumar, Mr. Vikas Kumar, Ms. Jyoti Bisht and Mr. Vishnu Garg. However, he upheld the disallowance of 25% of such purchases where the parties are not found to be available at the given address. It is the submission of the Learned Counsel for the Assessee that the letters were served upon certain parties proves that they were in existence and this fact is found in the assessment order. Further, the books of account were audited, the payments were made through banking channels, the sales have been accepted and there was quantitative tally of purchases with the quantities of the material used in the job work. The stock register showing relevant entries of the items purchased and issued for consumption in job work shows that these items were tallied. The survey party found physical stock at the time of search and survey. Therefore, it is his submission that disallowance @ 25% of the purchases is highly unjustified and some reasonable profit rate only should be adopted. 23. We find some force in the ....
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....re of the considered opinion that lump sum addition of Rs. 50,000/- on estimate basis under the facts and circumstances of the instant case will meet the ends of justice. We hold and direct accordingly. Ground of appeal number 14 of the assessee is accordingly partly allowed. 27. Ground of appeal no.15 relates to the benefit of telescoping of addition u/s 68, u/s 69C against additions on account out of bogus purchases. 28. After hearing both the sides, we find that it is the submission of the ld. Counsel for the assessee that if any addition is made then the assessee should be given telescopic benefit. He accordingly submitted that if any addition on account of bogus purchases is made then the commission expenses can be met out of such addition on account of bogus purchases or for the commission for purchase of gold coins. Referring to the decision of Hon'ble Delhi High Court in the case of CIT vs.Sonal Construction reported in [2013] 359 ITR 532 (Del.) has accepted the theory of benefit of telescoping. We, therefore, hold that the assessee is entitled to the benefit of telescoping of the addition on account of unexplained expenditure of Rs. 4,25,975/- out of the additions ma....
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....e and additionally in the alternative the quantum thereof too is being disputed. 7. Because the action is being challenged on facts and law for making addition on account of disallowance of purchases amounting Rs. 1,37,29,109/- on the basis that no stock details submitted whereas per assessee stock register was duly submitted before AO both quantitatively as well as qualitatively and the stock physically tallied with the books of account on the date of search. 8. Because the action is being challenged on facts and law for making addition of Rs. 1,37,29,109/- on account of disallowance of purchases considering whole purchases amounting Rs. 5,49,16,434/- as bogus purchases whereas per assessee documents in support of genuine purchases has been duly submitted and AO has verified the said parties too and additionally in the alternative the quantum thereof too is being disputed. 9. Because the action is being challenged on facts and law for making addition on account of commission expenses amounting Rs. 3,02,040/-. 10. Alternatively and without prejudice to above, the action for not allowing telescoping of addition on account of commission expenses ag....
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.... u/s 153A at an amount of Rs. 1,90,83,070/- is being challenged on facts & law. 2. Because the action is being challenged on facts & law for making additions in assessment proceedings u/s 153 A when there is no incriminating material/document found during the course of search u/s 132 of the Act for the impugned year. 3. Because the: action is being challenged on facts & law for completing the assessment u/s 153A haying returned wrong findings of fact & evidence qua the denial /' retraction of the surrendered amount, which is even contested since the quantum and relatability of the amount to the impugned year is not according to the document and material. 4. Because the action for addition u/s 68 amounting Rs. 25,00,000/- is being challenged on facts and law while all parameters for the provision of law required by assessee fulfilled as revealed in findings from acquiescence by silence. 5. Because the action is being challenged since the addition of Rs. 25,00,000/ - has been made without making proper investigation from the other party whereby assessee has discharged the onus by providing all relevant documents. 6. Because the action ....
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....eing challenged on facts and law for making addition on account of commission expenses amounting Rs. 2,55,729/-. 13. Alternatively and without prejudice to above, the action for not allowing telescoping of addition on account of section 68 & commission expenses against addition on account of bogus purchases is challenged on facts and law as both additions cannot be made simultaneously. 14. For any consequential relief and/or legal claim arising out of this appeal and for any addition, deletion, amendment and modification in the grounds of appeal before the disposal of the same in the interest of substantial justice to the assessee. 41. The ld. Counsel for the assessee did not press grounds of appeal no. 1, 2 and 3 for which the ld. DR has no objection. Accordingly, the grounds 1, 2 and 3 raised by the assessee are dismissed as not pressed. 42. Ground No.4, 5 and 6 of this appeal relates to the order of the ld. CIT(A) in sustaining the addition of Rs. 25 lakhs made by the AO. 43. Facts of the case, in brief, are that during the course of assessment proceedings, the AO noted that the assessee company has received an unsecured loan of Rs. 25 lakhs from M/s V....
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.... and genuineness of the transaction. The onus to prove the three factum is on the assessee as the facts are within the assessee's knowledge. Mere production of incorporation details, PAN Nos. or the fact that third persons or company had filed income tax details in case of a private limited company may not be sufficient when surrounding and attending facts predicate a cover up. These facts indicate and reflect proper paper work or documentation but genuineness, creditworthiness, identity are deeper and obtrusive , Companies no doubt are artificial or juristic persons but they are soulless and are dependent upon the individuals behind them who run and manage the said companies. It is the persons behind the company who take the decisions, controls and manage them. "{ref. Para 30} 17.8 Hon'ble Delhi HC in case of CIT Vs. Nova Promoters & Finlease (P) Ltd. [2012] 18 taxmann.com 217 (Delhi) quoted from its earlier judgments as under, "....there cannot be two opinions on the aspect that the pernicious practice of conversion of unaccounted money through the masquerade or channel of investment as share capital must be firmly excoriated by the Revenue "{re....
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....terial emanating from search, all possible additions have to be made to compute total income. The Honb'le Court did not deal with a case where no incriminating material was found during the search conducted under Section 132 of the Act. However, in other cases, where incriminating material was found as a result of search, the Hon'ble court clearly ruled that "total Income" is to be computed like normal assessment. The relevant portion of the judgment is reproduced below: "21. Now there can be cases where at the time when the search is initiated or requisition is made, the assessment or reassessment proceedings relating to any assessment year falling within the period of the six assessment years mentioned above, may be pending. In such a case, the second proviso to sub section (1) of Section 153A says that such proceedings "shall abate". The reason is not far to seek. Under Section 153A, there is no room for multiple assessment orders in respect of any of the six assessment years under consideration. That is because the Assessing Officer has to determine not merely the undisclosed income of the assessee, but also the 'total income' of the assessee in whose case a se....
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....ed in assessment or reassessment orders when the search was initiated or the requisition was made. 22. In the light of our discussion, we find it difficult to uphold the view of the Tribunal expressed in Para 9.6 of its order that since the returns of income filed by the assessee for all the six years under consideration before the search took place were processed under Section 143(l)(a) of the Act, the provisions of Section 153A cannot be invoked. The Assessing Officer has the power under Section 153A to make assessment for all the six years and compute the total income of the assessee, including the undisclosed income, notwithstanding that the assessee filed returns before the date of search which stood processed under Section 143(l)(a). The other reason given by the Tribunal in the same paragraph of its order that no material was found during the search is factually unsustainable since the entire case and arguments before the departmental authorities as well as the Tribunal had proceeded on the basis that the document embodying the transaction with Mohini Sharma was recovered from the assessee. While summarizing the contentions of the assessee in Paragraph 5 of its orde....
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.... well as the persons controlling affairs of the appellant of the appellant company/other group concerns were involved in obtaining accommodation entries in form of unsecured loans and bogus purchases as well as transactions {like advancing cash loans, earning interest, paying incentive in cash, purchasing gold in, cash, paying salary in cash etc.) which were not being entered into the books of accounts. In light of the facts discovered due to search (that the appellant and the people involved in its management were engaged colouring transaction by obtaining accommodation entries in form of loans as well as bogus purchases), the material fact of taking unsecured loan from an nongroup company, coupled with the fact such company was found to be paper company used for providing accomodation entries, certainly becomes incriminating material in respect of this addition and the said material(that the appellant and the people involved in its management were engaged colouring transaction by obtaining accommodation entries in form of loans as well as bogus purchases) certainly emanated from the search. Therefore, on pure facts, the addition has been found to be made based upon the material w....
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.... and has received the payment. 48. The ld. DR on the other hand heavily relied on the order of the AO and the Ld. CIT(A). She submitted that the Ld. CIT(A) has clearly and categorically held as to how the assessee has accepted the accommodation entries from a non-existing paper company. Therefore, the same should be upheld and the grounds raised by the assessee should be dismissed. 49. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) and paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee has accepted the unsecured loan of Rs. 25 from M/s Vigilant Paper Pvt. Ltd. which was repaid on three different dates namely 14.04.2014, 24.02.2015 and 01.03.2015, the details of which are as under:- Part Name mentioned in reasons recorded Date of Receipt of Loan Amount as per Reasons recorded Documents Date of Repayment of Loan Amount Documents Vigilant Paper Pvt. Ltd Interest on laon 23.04.2013 25,00,000/- 4,73,302/- Received loan through Banking Channel (pg. Interest on loan due after deducting TDS ....
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.... grounds raised by the assessee has been partly allowed, wherein, we have directed the Assessing Officer to restrict the profit on such purchases at 2% of the total purchases. Following similar reasoning, we direct the Assessing Officer to restrict the disallowance at 2% of the bogus purchases. The grounds raised by the assessee are accordingly partly allowed. 53. Ground no. 12 relates to the order of the Ld. CIT(A) in confirming the addition of Rs. 2,55,729/- being the commission expenses. 54. After hearing both the sides, the above ground is identical to the ground of appeal no 14 in ITA No.9153/Del/2019, wherein we have directed the Assessing Officer to restrict the disallowance to Rs. 50,000/- lump sum on estimate basis. Following similar reasoning, we direct the Assessing Officer to restrict the addition to Rs. 50,000/-. The above grounds by the assessee is partly allowed. 55. Ground of appeal no.13 relates to the benefit of telescoping. 56. After hearing both the sides we find the above ground is identical to ground no. 15 in ITA No.9153/Del/2019, we have already decided this issue and allowed the benefit of telescoping. Therefore, following similar reasoning, the....
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....ounting Rs. 93,33,960/- on the basis that no stock details submitted whereas per assessee stock register was duly submitted before AO both quantitatively as well as qualitatively and the stock physically tallied with the books of account on the date of search. 8. Because the action is being challenged on facts and law for making addition of Rs. 93,33"960/- on account of disallowance of purchases considering whole purchases amounting Rs. 3,73,35,843/- as bogus purchases whereas per assessee documents in support of genuine purchases has been duly submitted and AO has verified the said parties too and additionally in the alternative the quantum thereof too is being disputed. 9. Because the action is being challenged on facts and law for making addition on account of commission expenses amounting Rs. 2,05347/-. 10. Alternatively and without prejudice to above, the action for not allowing telescoping of addition on account of commission expenses against addition on account of bogus purchases is challenged on facts and law as both additions cannot be made simultaneously. 11. For any consequential relief and/or legal claim arising out of this appeal and....
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....1. Because the action for initiation, continuation and conclusion of assessment proceedings u/s 153A at an amount of Rs. 1,79,20,407/- is being challenged on facts & law. 2. Because the action is being challenged on facts & law for completing the assessment u/s 153A having returned wrong findings of fact & evidence qua the denial / retraction of the surrendered amount, which is even contested since the quantum and relatability of the amount to the impugned year is not according to the document and material. 3. Because the action is being challenged on facts & law for making disallowance of purchases amounting Rs. 1,03,22,034/- @ 25% of Purchases amounting Rs. 4,12,88,138/- by rejecting books of accounts u/s 145(2), hence the basis of addition is against the commercial expediency, business exigency and accepted modus operandi of the business and business operations and additionally in the alternative the quantum thereof too is being disputed. 4. Because the action is being challenged on facts and law for making addition on account of disallowance of purchases amounting Rs. 1,03,22,034/- on estimation basis (25% of purchases Rs. 4,12,88,138/-overlooking and....
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..... 68. The ld. Counsel for the assessee did not press grounds of appeal no. 1 and2 for which the ld. DR has no objection. Accordingly, the grounds 1and 2 raised by the assessee are dismissed as not pressed. 69. Ground no.3 to 7 relates to the order of the ld. CIT(A) in confirming the disallowance of Rs. 1,03,22,034/- being 25% of the purchases amounting to Rs. 4,12,88,138/- by rejecting the books of accounts u/s 145(3) of the Act and directing the Assessing Officer to restrict the disallowance to 20% in cases the parties are found to be in existence by Ward Inspector. 70. After hearing the both the sides, we find the above grounds are identical to grounds of appeal no.9 to 13 in ITA No.9153/Del/2019. We have already decided this issue and the grounds raised by the assessee has been partly allowed, wherein, we have directed the Assessing Officer to restrict the profit on such bogus purchases at 2% of the total purchases. Following similar reasoning, we direct the Assessing Officer to restrict the disallowance to 2% of the bogus purchases. The grounds raised by the assessee are accordingly partly allowed. 71. Ground no.8 by the assessee relates to the order of the Ld. CIT(....
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....R 532 (Del.). Ground no. 9 raised by the assessee is allowed for statistical purposes. 78. Ground no.10 by the assessee relates to telescoping benefit. We have already decided this issue in preceding paragraph. Therefore, this doesn't require adjudication and the ground raised by the assessee is allowed. 79. Ground no.11 being general in nature is dismissed. ITA No.9158/Del/2019 (AY 2017-18) 80. The ld. Counsel for the assessee has raised following grounds:- 1. Because the action for initiation, continuation and conclusion of assessment proceedings u/s 153A at an amount of Rs. 57,92,503/- is being challenged on facts & law. 2. Because the action is being challenged on facts & law for completing the assessment u/s 153A having returned wrong findings of fact & evidence qua the denial / retraction of the surrendered amount, which is even contested since the quantum and relatability of the amount to the impugned year is not according to the document and material. 3. Because the action is being challenged on facts & law for making an disallowance of purchases amounting Rs. 1,05,98,837/- @ 25% of Purchases amounting FIs. 4,23,95,347/- by rejecting b....
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....nged on facts and law for making addition of Rs. 6,00,000/- U/S 69A r.w.s 115BBE on account of unaccounted income overlooking the submissions and books of account of assessee company. 11. Because the action is being challenged on facts and law for making addition of Rs. 13,32,207/- U/S 69C r.w.s 115BBE on account of unexplained expenditure overlooking the submissions and books of account of assessee company. 12. Because the action is being challenged on facts and law for making addition of Rs. 9,80,410/- U/S 69A r.w.s 115BBE on account of unexplained income overlooking the submissions of assessee company. 13. Alternatively and without prejudice to above, the action for not allowing telescoping of addition on account of u/s 69A, 69C & commission expenses against addition on account of bogus purchases is challenged on facts and law as both additions cannot be made simultaneously. 14. For any consequential relief and/or legal claim arising out of this appeal and for any addition, deletion, amendment and modification in the grounds of appeal before the disposal of the same in the interest of substantial justice to the assessee. 81. The ld. Counsel....
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....89. After hearing both the sides, we find during the search at premise 17/6, Hanspal Industrial Complex, Mathura Road, Faridabad, Page-99 of Annexure-A7 was seized which contain the payment received from M/s Defy Motors, Gurgaon. The AO asked the assessee to furnish the details of payment. In absence of any satisfactory explanation from the assessee and observing that during the course search proceedings, Ms. Jyoti Bisht had admitted on oath in her statement that the payment of Rs. 6 lakhs was received from M/s Defy Motors Guragaon as advance but not recorded in the books of accounts of the related concerns, the AO made addition of Rs. 6 lakhs to the total income of the assessee as unaccounted income u/s 69A of the Act. 90. In appeal, the ld. CIT(A) upheld the action of the Assessing Officer. 91. Aggrieved with such order, the assessee is in appeal before the Tribunal. 92. We have heard the rival arguments made by both the sides and perused the records. We do not find any infirmity in the order of the Ld. CIT(A) in sustaining the above addition. Admittedly, the addition was made on the basis of seized document Page-99 of Annexure-A7, which contains the payment of Rs. 6 lak....
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....se 17/6, Hanspal Industrial Complex, Faridabad. One paper containing details of cash received and issued was seized amounting to Rs. 9,80,410/-. The AO therefore asked the assessee to explain the same. The assessee submitted that the said papers contain cash balance & expenses incurred on incentive and salary paid to employees at various places. It was explained that the cash generated out of billing grey market purchases were used for incurring the business expenditure. However, the AO was not satisfied with the arguments advanced by the assessee and noted that the assessee failed to show that the transactions are recorded in the books of accounts. He, therefore, invoked the provisions of section 69A of the Act and made addition of Rs. 9,80,410/-. 98. In appeal, the ld. CIT(A) upheld the addition made by the AO by observing as under:- "26.11. Sixth addition is of Rs. 9,80,410/-. This addition has been made on account of a seized papers having details of cash payments and receipts. During the search an statement of Shri Kuldeep, an employee of the appellant who was having custody of these (seized) paper was recorded. He deposed that these papers were having entries of c....
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.... 6. Supreme Enterprises 620/20, Madanpur, Gurgaon. Shop No.2, Maruti Kunj, Sohna Road, Gurgaon. Address located where Mr. Subhash Chand Aggarwal was present and enquiring with him he claimed to be proprietor in Shree Shyam Enterprises. He was summoned u/s 131(to appear In person ол 07.12.2018 at 12:25 P.M) of the IT AG 1961 on his whatsapp mobile no. 9810111148. His acknowledgement as "OK Sir" received at the same time. As asked, Mr. Subhash Chand Aggarwal replied to file reply, of notice u/s 133(6) Issued earlier, by the end of this week Le by 07.12.2018. Address located, where Mr. Sandeep Gera was present and enquiring with him he claimed to be proprietor in Gebros Petrochem. He was summoned u/s 131(to appear in person on 07.12.2018 at 11:35 AM). of the IT Act, 1961 on his whatsapp mobile no. 9555531000. As asked; Mr. Sandeep Gera replied to file reply of notice u/s 133(6) (ssued earlier, by the end of this week ie by 07.12.2018. Address located. Premise was locked. Neighbour B-205 was vacant and in B- 203 "Shri Ganesh Enterprise" was found. On enquiring it wa....