TaxTMI 
TaxTMI 
2022 (3) TMI 658
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....cumstances of the case as well as law on the subject, the learned CIT(Appeals) has erred in partly confirming the action of assessing officer in making the disallowance out of job charges by sustaining addition to the tune of Rs. 6704324/- as against addition of Rs. 12259837/- made by assessing officer. 3. It is therefore prayed that additions made by assessing officer and confirmed by Commissioner of Income-tax (Appeals) may please be deleted." 3. Brief facts qua the issue are that assessee is engaged in the business of trading of cloth and sarees. During the course of assessment proceedings, Assessing Officer issued notice u/s 133(6) of the Act in respect of embroidery job work done by assessee. These notices u/s 133(6) were unserved in respect of the following parties: Sr. No Name of the Sale Party Amount ( In Rs) 1 4 X U Fashion 4,98,905 2 Kudrat Creation 6,26,310 3 Satyam Creation 17,01,850 4 Om Art 24,80,333 5 Vraj Fashion 23,07,280 6 Deep Creation 4,49,045 7 Angel Fabrics 10,12,523 8 Darshan Fashion 1,77,180 9 Shree Ganesh Fashion 7,74,870 10 Maruti Nandan Textile 8....
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....ails maintain during F.Y.2013-14. • Please submit copy of resident evidences of all partners submit list of partners movable/immovable assets own by them as on 10.03.2014, with necessary evidences. Submit copy of firm's trial balance as on 10.03.2014, with necessary evidences. Submit copy of Firm's trial balance as on 20.03.2014, with copies of trading account, profit and loss account, and capital account. 3. Please note that if you will fail to comply this notice then you are hereby shown cause, please explain why the discussed amount should not be add to returned income of the firm for the year under consideration." 5.In response to the show cause notice, the assessee has submitted its reply to the Assessing Officer dated 20.03.2014, which is reproduced below: "On behalf of our subject client, we acknowledge with thanks the receipt of your show cause notice dated 15.03.2014 bearing reference No.PAN: AAJFR4447/File No.51 requiring our subject client to produce the parties listed therein whose show cause notices u/s 133(6) have been returned unserved. In this connection, 1. We have furnished the addresses as they appeared ....
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....s maintained item wise, it is absolutely impossible to believe the claim of job work expenses from the above said parties. Therefore, AO treated alleged job work expense,as bogus. 7. In view of the above, sum of Rs. 1,11,84,297/- out of Rs. 1,76,73,760/- was found to be a bogus claim of expense and is accordingly rejected, disallowed and added back to the total income of the assessee. During the assessment proceedings, the assessee has filed three confirmations on 25.03.2014 of Kudrat Creation of Rs. 6,26,310/-, Vraj Fashion of Rs. 23,07,850/- and Om Art of Rs. 24,80,333/-. Therefore, addition is made only for Rs. 1,11,84,297/- out of Rs. 1,76,73,760/-. 8. Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before Ld. CIT(A) who has granted part relief to the assessee by observing as under: "6.1.6. On the perusal of the details, it is found that the appellant was issued a show cause notice on 15.03.2014 and the date of compliance was 20.03.2014 and therefore the appellant was given insufficient time to produce the details. Keeping in view this fact of insufficient time given to produce the details before the AO and the principles of....
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....ndan Textile Embroidery Job Work expenses 8,44,988/- No details furnished Payal Fashion Embroidery Job Work expenses 7,58,290/- No details furnished Radha Swami Creation Embroidery Job Work expenses 1,52,840/- No details furnished Total 25,30,988/- The appellant failed to furnish any evidence pertaining to the above 4 parties of Rs. 25,30,988/-regarding genuineness of the job work expenses inspite of opportunities given during theassessment proceedings as well as appellate proceedings. This amount of Rs. 25,30,988/- is considered to be unverifiable expenses. 6.1.9. In regard to the other 8 parties to whom job work expenses have been paid it is beingdiscussed in the subsequent para. 1. 4XU Fashion: The AO in the remand report submitted that the appellant had filed the confirmation with the PAN regarding the job charges of Rs. 4,98,905/- but no other evidence was given. The appellant submitted that the party has filed confirmation alongwith the complete address and the PAN. The contra account filed by the party matches with the amount debited by the appellant and the payments had been made to this party by ac....
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....ly even the cheque payment of Rs. 17,820/- made through IDBI account on 20.10.2010 has not been accounted by the party in the contra account though the bank statement of Deep Creation shows that the cheque no. 254743 has been duly credited in the account on 21.10.2010. On the perusal of the details, it is observed that no confirmation has been filed by Deep Creation and the contra account figures do not tally with the ledger of the appellant. The contention of the appellant .that the accounts of the Deep Creation are not reliable is without any basis. In absence of any confirmation and the discrepancy in the contra account filed by the appellant, the contention of the appellant is rejected and the addition made by the AO in respect of Deep Creation job work expenses of Rs. 4,49,045/- is upheld. 4.Angel Fabric: The AO reported that the party has filed the confirmation with PAN, but no other documents such as ITR acknowledgment, copy of computation of income and balance sheet, bank statement has been filed. The amount of job charges shown in the appellant's ledger is Rs. 7,39,030/- and in the confirmation filed the amount shown is Rs. 7,39,030/- only on the balance carry....
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.... statements, ITR details, balance sheet etc. and the discrepancy in the contra account filed by the appellant, the contention of the appellant is rejected and the addition made by the AO in respect of Jahanvi Fashion job work expenses of Rs. 37,24,291/- is upheld. 7. Brahmani Creation: The AO reported that the party has filed the confirmation with PAN, along with ITR acknowledgment, copy of balance sheet, has been filed. The amount of job charges shown in the appellant's ledger is Rs. 12,61,495/- and in the confirmation filedshows the balance brought down as per the appellant's books of Rs. 3,70,384/- matches with the figure of the sundry debtors in the balance sheet of Brahmani Creation. The appellant submitted that there is no difference in the ledger account of the appellant and the contra confirmation filed by the Brahmani Creation. On the perusal of the details, the contention of the appellant was found to be correct and the confirmation filed is matches with the ledger account of the appellant and therefore the addition of Rs. 12,61,495/- is deleted. 8. Guru Krupa Fashion: The AO reported that the party has filed the confirmation with PAN, without IT....
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.... the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. Before us, Ld. Counsel for the assessee submits that in respect of M/s Shri Ganesh Fashion, (one of the parties), the payment was made through banking channel and respective bills of job charges are on the record and assessee also submitted contra accounts. Similar arguments were made by the Ld. Counselin respect of M/s Maruti Nandan Textile, M/s Payal Fashion, M/s Radha Swami Creation, and M/s Deep Creation. 11. For M/s Jahanvi Fashion, we note that assessee submitted additional evidences under Rule 29 of the Income Tax Appellate Tribunal Rules 1963. The assessee submitted copy of income-tax acknowledgement, Balance-Sheet, Profit and loss account and capital account for assessment year 2011-12, which are placed on paper book page 133-134. The assessee has requested to admit these additional evidences in respect of M/s Jahanvi Fashion. In this regard, assessee has also filed request letter dated 10.12.2021, before the Bench which is reproduced below: "May it please to your honur 1.The assessee ha....