TaxTMI 
TaxTMI 
2023 (6) TMI 256
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....ere never retracted nor anything on the record was brought showing that statements given by them were incorrect 2. Whether on the facts and circumstances of the case in law, the Ld. CIT(A) has failed to appreciate the incriminating material in the form of draft plan for inflation in purchases of grapes which was unearthed during the search action and it had direct relevance to the findings recorded by the Assessing Officer in his assessment order 3. The appellant craves to leave, to add, to amend and/ or to alter any of the ground of appeal, if" 2. Fact in brief is that a search and seizure action u/s 132(1) of the Act was conducted on Samant Group of Mumbai on 23.11.2017 which interalia included the assessee also. The assessee is one of the director of M/s Sula Vineyards Pvt. Ltd. During the course of assessment on perusal of the material seized during the course of search, the A.O noticed that assessee had claimed agricultural income from 3 different farms: (a) Dindori Farm (b) Kadam Farm (c) Samant Farm The A.O also noticed that assessee had shown agricultural receipts in different years as under: 2012-13 1,97,03,628 20....
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.... the stock of the company during the search and seizure action and quantity of grapes supplied by the assessee were actually used for the manufacturing of wine and the purchase of the grapes made by the company from the assessee were actually without any kind of inflation. The assessee has also provided the detail of different farm as follows: Details Amount (in Rs) Total Grapes sold during the year from Dindori Far 565,28,560 Total Expenses incurred on Dindori Farm 50,81,978 Profit from Dindori Farm 14,46,582 Details Amount (in Rs.) Total Grapes sold during the year from Kadam Farm 2,57,29,960 Total Expenses incurred on Kadam Farm 1,55,51,978 Profit from Kadam Farm 1,01,77,982 Details Amount (in Rs.) Total Grapes sold during the year from Samant Farm 9,20,395 Total Expenses incurred on Samant Farm 9,33,945 Profit from Samant Farm (13,550) The assessee also submitted that he cultivated high quality of grapes and was able to harvest the grapes successfully which resulted into the huge profits. The assessee also submitted that in his case the agricultural operations did not only require raw....
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....four different types of evidences were found suggesting that the applicant had been inflating is purchases of grapes for generating cash. These were enumerated as under: i. Katcha slips and Farmer Vehicle Register maintained at the Dindodri and Gangapur units. ii. Two pages seized from Nana Shelke which has a detailed plan of inflating the purchases for generating cash. iii. Compilation of data obtained from Shri Karan Vasani, Associate Vice President (Wine making Department) and data compiled by Shri Vikram Boob of the accounts department as per SAP software. iv. Data provided by Shiri Nana Shelke, (GM Vineyard operations) in respect of forty farmers who were paid excess for grapes and who then returned the cash. The department relying on the Katcha slips and Farmer Vehicle Register maintained at the Dindodri and Gangapur units respectively estimated inflation in the purchases by 27.11% for FY. 15-16 and by 48.08% for F.Y. 16-17 The average of the percentage inflation for the Gangapur and Dindori Units (considering the two F.Ys 2015-16 and 2016-17) was arrived at 37.59%. This average percentage inflation in grapes purchase of 37.59% was....
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.... purchases. The ITSC considered these two documents as most important piece of evidences which gave the direct evidence of cash generation and expenditure. The generation of cash for F.Y. 16-17 is of Rs. 313.98 Lakhs which is arrived at by inflating purchases of grapes for Rs. 265.97 Lakhs apart from other sources of cash generation. The total purchases of grapes in FY 16-17 as per statement of Mr. Shinde was Rs. 40.32 crores. Thus the inflation of Rs. 2.66 crores on account of grape purchase gives inflation of approximately 6.6% Thus, the ITSC has accepted inflation of 6.6% for F.Y. 16-17 for purchase value for cash generation. The ITSC also noted that this percentage is also very near to of inflation worked out based on the data maintained by Shri Karan Vasani as per excel sheet which is maintained mainly for production purposes which is very vital original record and sort of primary record. This percentage is also nearer to the percentage of inflation being 0.07%, based on the data regarding extra booking of grapes in accordance with the working provided by Shri Nana shelke, GM Vineyard Operations from forty farmers. The AO has estimated the inflation ....
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.... in the case of the assessee. He also submitted that two employees whose statement were recorded were not the employee of the assessee but they were the employee of the company. The ld. Counsel further submitted that no difference was found in the stock at the factory and the same was tallied with physical stock records and no unaccounted assets have been found during the search. He also submitted that the assessee was a supplier of grapes to Sula Vineyard Pvt. Ltd. and in its case the same have been verified in detail during the search and no discrepancy has been found pertaining to the case of the assessee. The ld. Counsel also submitted that statement of Shri Raman Bhawar and Shri Vinayak Nehe were not considered as a factual piece of an evidence by the Income Tax Settlement Commission and the data provided by the them was not reliable for the purpose of calculating inflated purchases. The ld. Counsel supported the order of the CIT(A). 9. Heard both the sides and perused the material on record. Without reiterating the fact as elaborated above during the course of search proceedings a list of 30 parties were found from M/s Nana Shelke (General manager of Vineyard operation) wh....