TaxTMI 
TaxTMI 
2023 (1) TMI 475
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....oid, inasmuch as, no speaking order was passed before completion of the impugned assessment on the objections raised against issue of notice u/s 148 of the IT Act, 1961. The action of the learned Assessing Officer is contrary to the dictates of the Hon'ble Supreme Court. 04. The learned Assessing Officer has grossly erred in making an addition of Rs 2,40,75,750/- by recourse to section 68 of the IT Act 1961, and holding it to be the income from other sources. Reasons assigned for the impugned addition are wrong and contrary to the provisions of law 05. The learned lower authorities have grossly erred in restricting deduction u/s 80HHC of the IT Act 1961, atRs 33,41,195/-only, as against the correct amount of deduction allowable at Rs 1,06,98,507/- The shortallowable of deduction is wrong and contrary to the provisions of law read with judicial proposition: 06. The appellant may please be permitted to raise any additional or alternative ground on or before thehearing of appeal." 2. Brief facts of the case are that the assessee filed its return of income on 01- 12-1997 declaring total income at Rs 22,40,430/-. A survey was conducted by DDIT (Inv), Mumbai on 22-04-1999 in t....
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....ns of the assessee. Assessee raised total 6 grounds of appeal out of those 5 are substantive grounds and ground no 6 is general in nature. Ground no 1, 2,3 related to reopening of the case and about legality of the order passed by the AO u/s 147. We observed that thew AO provided opportunities (as directed by ITAT) to the assessee to file his objection and dealt with the objections by the speaking order vide letter dated 16-02-2008. As per the direction of the ITAT Mumbai copy of the reasons recorded were supplied to the assessee and assessee filed its objection vide letter dated 08-10- 2008. We observed that the AO rightly followed the directions of ITAT by supplying the reasons to the assessee, established valid reasons for reopening and passed a speaking order by bringing all the relevant facts and material on record. In view of the above ground no1,2,3 raised by the assessee is found to be base less hence dismissed. Merits of the reasons supplied we will deal with further in our order while discussing the grounds related to merits of the case. 7. We have thoroughly absorbed the contents in the order of the AO and Ld. CIT (A) with submissions of the assessee. The relevant facts....
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....d up to satisfy the merits of the case. Even before us nothing submitted to substantiate the merits of the case. 9. In view of the above facts, it can be reasonably concluded that assessee entered into fictitious transactions of purchase and sales. We did not find any anomaly in the order of the AO he rightly neutralise the difference amount of profit arisen out of fictitious purchase and sales.We further confirm his action u/s 68 treating the sales receipt amounting to Rs 2,40,75,750/- as cash credit as defined in sec 68. AO rightly observed that in the garb of sales it is assesses own money which he introduced as sales. We further relied on the following judicial pronouncement as under * Roshan di Hatti Vs CIT 107 ITR 938 (S.C) * Kale khan Mohammed Hanif Vs CIT 50 ITR 1(S.C) * CIT Vs M.Ganapathi Mudaliar 53 ITR 623 (S.C) * A.Govindarajulu Mudalair Vs CIT 34 ITR 807 (S.C) In view of the above addition u/s 68 is rightly made and ground no -4 raised by assessee are dismissed. 10. As far as ground no-5 is concerned that has been dealt in detail by the AO in its original order, order of CIT (A) against the earlier assessment order dated 22- 01-2003 (para 5 to 6.1, page 7 an....
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....aid off and no confirmation were ever submitted for sundry creditors against those purchases * Shri Rais Ahmed himself confirmed that all these transactions were only accommodation entries and the goods were never received. Further Mr F.H. Rizvi who was running the vendor concerns never appeared u/s 131 to confirm the transaction claimed by the assessee. * A statement was recorded of Shri F.H Rizvi on 07-12-1998 by DDIT (Inv) Mumbai in connection with search on him u/s 132 of the Act. In his statement Shri F.H. Rizvi admitted that there is no genuine sale purchase transactions in his concerns and he only issues bogus bills without any physical movement of the goods in response to question no 4 of his statement he confirmed that he issues bills to various parties including assessee and get the cheques from them, once the cheque is cleared he withdraw the cash and return the same to the parties. * Assessees own submissions is contradictory in nature, on the one hand he claims the transactions to be genuine on the other hand he himself claim that he entered into deal bogus transaction to enjoy the facility of bill discounting from various banks. * It is also observed through f....
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....m proceedings would not ipso facto result in imposition of penalty. In the instant case, in quantum proceedings which were taken up to the ITAT, the Tribunal had recorded a fact that assessee booked bogus purchase and sales in the books of accounts in the garb of introducing its own money through sales channel, which is chargeable to tax u/s. 68 of the I.T. Act, 1961. Further, in quantum proceedings authorities below and ITAT have concurrently arrived at a finding of fact that the claim made by the assessee with regard to its purchase and sales are fictitious for subject assessment year. These findings of fact are not shown to be perverse in any manner. The legal claim made that once a transaction is shown in the books of accounts, it must follow that it is bona fide, is not understood. The transactions shown in the books are found to be false. The assessee has to show the reason why he believed at the time he filed his books, it was true. No such attempt was even made. 18. Facts relevant to confirm the order of penalty has already been discussed in detail vide our order (supra), hence, there is no need to elaborate the facts of the case (as discussed in quantum appeal) again. Rel....