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2020 (9) TMI 1275

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..... Briefly stated the facts of the case are that the appellant is an individual having source of income from house property, business or profession and income from other sources. During the course of scrutiny assessment proceedings, the Assessing Officer issued notices under section 133(6) of the Income tax Act, 1961 [hereinafter referred to as 'the Act' for short] to the following parties: Sr.No PAN Name Amount Remark/Status 1 AGMPA7207P M/S GEETA METAL INDUSTRIES 12036 Confirmed 2 ARLPS6594B M/S J.K. GENERATORS 6375 No response 3 AACCP3274A M/S PDRV ENTERPRISES (P) 6259557  Confirmed 4 AAEPA7698C  M/S PLASTRONICS (INDIA) 8150510  Confirmed 5   M/S PUNEET CARGO SERVICE 15014  C....

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....icer made an addition of Rs.11,86,168/-. 6. The assessee strongly agitated the matter before the CIT(A). 7. The ld. CIT(A) was convinced that the formula used by the assessee is without any basis and is arbitrary. However, the ld. CIT(A) confirmed the additions on account of three creditors, namely, U.V. International, J.P. Industries, and B.P. Chemicals as under: i) U.V. International Rs. 4,176/- ii) M/s J.P. Industries Rs. 5,67,713/- iii) M/s B.P. Chemicals Rs. 2,27,484/-  8. Before me, the ld. counsel for the assessee vehemently stated that the creditors are outcome of the purchases made from them and the Assessing Officer has not drawn any adverse inference in so far as total purchases are concerned. The learned counsel fu....

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....turnover of the assessee. The Assessing Officerhas also not rejected the books of account to estimate profit on these transactions in case it was a firm finding that purchases and sales were bogus. The facts of the case of LA Medica (supra) are different in the sense that detailed enquiries were made into the purchases made by the assessee, which were held to be bogus by the AO. It was found that the purchase consideration got deposited in a bank account of an employee in Calcutta, which was opened with the introduction of the assessee. No such enquiry was made in this case. In the case of La Medica (supra), it was also not the case that sales were effected from the purchases made and, thus, the purchases could not be outrightly termed as b....

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....ceived from another person. It is because of this distinction, a liability for purchase which has been credited in the account ofthe supplier cannot be added under section 68 of the Act, more so when the purchase has been accepted as genuine and a deduction therefore has been allowed." 12. Further, the decision in the case of Jhabua Power Investments Ltd 938/DEL/2018 dated 21.05.2019, which has been authored by me, needs mention wherein it has been held as under: "8. I have carefully considered the order of the authorities below. It is not in dispute that the A.O made impugned addition of Rs. 4,97,5g9/- treating the purchases as bogus expenses. It is equally true that the purchases were debited in the regular books of account of the asse....