TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 1015
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....ming the order of the AD rejecting the contention of the assessee that reopening the assessment under Section 147 of the Act and consequent reassessment without complying with the statutory conditions and the procedure prescribed under the law are bad and liable to be quashed. 3. On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in confirming the order of the AO rejecting the contention of the assessee that the reasons recorded for reopening the assessment does not meet the requirements under section 147 of the Act, bad in law and are contrary to the facts. 4. On the facts and circumstances of the case, learned CIT(A) has erred both on facts and in law in confirming the reopening ignoring the fact that there is no live nexus between the reasons recorded and the belief formed by the assessing officer. 5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming action of the AO despite that assessment order having been framed on the basis of material collected at the back of the assessee, without providing adequate opportunity to the assessee to rebut the same in violation of stat....
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....assessee before the AO to show that the purchases and sales were made in the regular course of business. 12. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in rejecting the contention of the assessee that AO has erred in not taking the allegation to the logical conclusion after having held that purchases are not genuine it's the obvious implication would have been made that sales are also not genuine. 13. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in rejecting the contention of the assessee that reasons recorded by the AO are contrary to the report received by it whereby it was clearly stated that purchases made by the assessee are actual purchases and hence there was no reason to believe that income has escaped assessment. 14. (1) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs 2,12,316/- made on account of commission expenses. (ii) That the addition has been made arbitrarily at the rate of 1% of purchases made by the assessee without there being any basis for the same. 15. On th....
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....stock records, books of accounts are audited as per law and nothing adverse were pointed out both by the AO as well as CIT(A) 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition, despite the fact that the amount has already declared by the assessee as cash sales and the action of the learned AO will tantamount to double taxation of the same amount. 5. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of the learned AO in charging the income of Rs. 1,23,77,599/- already offered by the assessee as discrepancy in stock under section 68 read with section 115BBE of the Act. (ii) That the above action of the learned CIT(A) is invalid in total disregard to the fact that the additional income was on account of discrepancy in stock found during the course of survey and is the business income of the assessee and hence cannot be charge to tax under section 68 read with section 115BBE of the Act. (iii) That the learned CIT(A) has erred in ignoring the detailed submissions and explanations and evidences brought on record by the assessee....
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....ng the facts of the case that the assessee has shown big increase in sales on 8th November 2016 in a single day resulting into increase in the cash-in-hand whereas it could not submit complete copy of cash account with narration of entries and details of persons from whom the cash had been received in the required format. v. The Ld. CIT(A) was not justify in law in overlooking the modus operandi adopted by the assessee to take benefit of the situation and circumstances arised due to demonetization wherein the assessee just managed artificial entries of cash sales which is nothing but part of a colorable device, as held by Hon'ble Supreme Court in the case of Mc Dowell & Co. Ltd. Vs CTO 154 ITR 148(SC), to bring the unaccounted cash into the books of account." 7. With regard to the reopening u/s 147, we affirm the order of the ld. CIT(A). 8. The assessee filed its return of income u/s 139(1) on 23.09.2010 declaring an income of Rs. 30,41,790/-. Thereafter on 16.10.2014, a search and seizure operation was conducted on assessee along with Brijwasi Jewellers. Consequent to the search action, notice u/s 153A with respect to A.Y. 2009-10 to 2014-15 were issued. The assessee durin....
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....respectively. They all concurred in the whole modus operandi of issuing bogus purchase bills to parties. It was also revealed that Bhanwarilal Jain Group comprises of about 70 companies who are engaged in booking bogus sales in their books, thereby providing bogus purchase entries to its customers. The firms mentioned below viz., M/s Rajan Diamonds, M/s Mayur Exports and M/s Mukti Exports figure in the list of group firms/companies of Bhanwarilal Jain Group. Consequent upon the search operation, information was received from the Director of Income Tax (Investigation)-II, Mumbai regarding bogus purchase entries provided by Bhanwarilal Jain Group to M/s Neha Jewellers Pvt. Ltd., 1170, Kucha Mahajani, Chandni Chowk, Delhi. As per the information, the bogus purchase entries provided to M/s Neha Jewellers Pvt. Ltd. by the group concerns of Bhanwarilal Jain Group for the Financial Year 2006-07, relevant to the Assessment Year 2007-08 is as under: S. No. Name of the Entry Provider Amount 1. M/s Rajan Diamonds Rs. 44,77,511/- 2. M/s Mayur Exports Rs. 49,94,900/- Total Rs. 94,72,411/- Perusal of the audited balance sheet of the assessee company, it is noticed....
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.... submitted the following documentary evidences to prove the genuineness of the transaction: i. Ledger A/c in the books of the assessee. ii. Copy of purchase Bill and Purchase Account. iii. Stock Ledger in the books of assessee. iv. Bank statement of the assessee highlighting the payment made for purchase. v. Sales Ledger of the assessee showing sales of the goods purchased from the alleged parties. vi. Confirmation of Accounts from the parties from whom purchases have been made. vii. Copy of PAN Card of the alleged parties. viii. Copy of VAT/CST Registration of the parties. ix. Copy of ITR of the alleged parties. x. Bank statement of the parties from whom purchases have been made. xi. Copy of stock Ledger of the parties from whom purchases have been made. xii. Copy of Audited Financial Statements of the above alleged parties. 14. On 05.12.2017, the assessee has provided the sales, purchase and inventory analysis to establish the genuineness of purchases. The assessee vide reply dated 18.12.2017 has also submitted the affidavit from the directors of the above mentioned parties in which they have affirmed the transaction with the assessee. The assessee also con....
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.... assessee has obtained bogus purchase bill from Bhanwarlal Jain and therefore the Ld. CIT (A) confirmed the addition of Rs. 42,46,330/- i.e. 20% of Rs. 2,12,31,648/-. 19. Aggrieved, both the Revenue and the assessee are in appeal before the Tribunal against the order of CIT(A). The revenue filed appeal against the deletion made by the ld. CIT(A) on account of bogus purchases and the assessee is in appeal against the determination of 20% of the purchases as undisclosed income. Since, the issue is inter-connected, it is being dealt by common adjudication. 20. Heard the arguments of both the parties and perused the material available on record. 21. At the outset, it is relevant to mention the following pertinent points: * The AO has re-opened the assessment solely on the basis of information received from the investigation wing. * The AO has not rejected the evidences submitted by the assessee to prove the genuineness of the purchases. * The AO has not rejected the books of account of assessee. * The AO and the Ld. CIT(A) has not doubted the sales made by the assessee. * The AO and the Ld.CIT(A) has not pointed out any discrepancy in the stock of assessee. * The AO has ....
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....rmations and affidavit to the assessee confirming that the purchases were actually made and are totally genuine. * During the course of search operation in the case of assessee in the year 2014, the business operation of the assessee company were verified by the search party. The block period covered in said search included the year under consideration. However, no incriminating material was found during the course of search for the year under consideration. * During the said search action physical stock taking was done of each and every item of stock and reconciled with the books of accounts. 23. The ld. CIT(A) having after held that the genuineness of the parties from whom purchases were claimed to have been made has been doubted, he also held that genuineness of the purchase as a whole cannot be doubted as the assessee has made corresponding sales. Observing thus, the ld. CIT(A) confirmed the addition @ 20% on the alleged purchases as bogus. 24. We find the decision of the ld. CIT(A) is oxymoronic as the ld. CIT(A) having given categorical observation that the diamonds have been indeed purchased, sold, the profit is offered to tax, the name of the assessee has not been men....
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....rm that the transactions of sales made by them to the assessee are genuine, that too, in response to the notices issued by the AO u/s 133(6) of the Act during the course of assessment proceedings, in our view, the said replies cannot be rejected without bringing on record any material to show that they are not true. We notice that the AO did not bring any material on record and he simply relied upon the report given by the investigation wing. As per Ld. A.R., the statement given by Shri Bhanwarlal Jain is a general statement only. The assessee, as stated earlier, has furnished confirmation of ledger accounts and also affidavits to prove the genuineness of transactions. We notice that the AO could not controvert those documents. 12. In view of the foregoing discussions, we are of the view that the assessee has duly discharged the burden to prove the genuineness of purchases. On the contrary, the AO has simply relied upon the report given by the investigation wing. In this view of the matter, we are of the view that no addition is called for on account of alleged bogus purchases. Accordingly we set aside the order passed by Ld CIT(A) on this issue and direct the AO to delete the im....
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....us dates from 06.12.2016 to 30.12.2016 in State Bank of India A/c No. 31021809029 and in A/c No. 000026426830019 Deutsche Bank. The deposit on 10.11.2016 of specified currency note was to the tune of Rs. 4,10,00,000/- in the State Bank of India A/c No. 34355670650. 33. It is a fact that cash deposits during the demonetization period was made in 3 bank accounts of the assessee company. Out of the total cash deposits of Rs. 4,58,30,000/- the old currency notes were amounting to Rs. 4,10,00,000/-which was deposited on 10.11.2016 in SBI Bank account no.34355670650 and the remaining cash deposits of Rs. 48,34,500/- was made in new currency over the period of 06.12.2016 to 30.12.2016 in the other two bank accounts SBI Account no.31021809029 and Deutsche Bank Account no.26426830019. Further, in this regard the assessee had also filed details wherein the assessee had submitted the copy of Form 'Cash Transaction 2016' filed on Income Tax E-filing Portal with respect to the cash deposits made during demonetization period. The copy of said forms with respect to the cash deposits made in all the three bank accounts of the assessee is placed in the paper book. It was submitted that on ....
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....ddition to the extent of cash deposited in new currency notes amounting to Rs. 48,34,500/- is liable to be deleted. 35. The ld. AR argued that the cash sales have been made to the extent of Rs. 8,14,975/- on 08.11.2016 to identified parties having PAN and assessee has given including name, address, PAN of the buyer alongwith the amount of sales and the invoice details against which the said sales were made. Further, cash deposits to the extent of Rs. 97,27,528/- pertains to sales made to identified parties and the assessee has given name, address of the buyer alongwith the amount of sales and the invoice details against which the said sales were made. It was argued that, in view of the same it can be said that the total cash sales made to he identified parties, amounts to Rs. 1,05,69,503/- and the cash deposit cannot be treated as unexplained deposits from unknown sources. Thus, the ld. AR argued that the amount of Rs. 1,05,69,503/- for which the complete sources have been proved and an amount Rs. 48,34,500/- which is deposited in the form of new notes cannot be treated u/s 68 of the Income Tax Act, 1961 under any imagination. 36. With regard to the cash deposits of Rs. 3,04,30,4....
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....996 23,635,714 38. The ld. AR argued that if the monthly average data of first seven months (pre demonetization period) is compared with the last four months (post demonetization period), then it dearly evident that average monthly turnover of the assessee in the post demonetization period is much better that the pre demonetization period. There could be slender variation in the cash sales and deposits. The ld. AR also submitted the details of cash sales for a period of four years to prove that the huge cash sales and cash deposits are a norm in the regular business of the assessee. Hence, the deposits made during the year should not be looked with suspicion for no reason. To prove the normality of cash cash deposits, the month wise details of the cash sales for the F.Y. 2014-15, F.Y. 2015-16, F.Y. 2016-17 and F.Y. 2017-18 have been submitted by the assessee which is as under: F.Y. 2014-15 F.Y. 2015-16 F.Y. 2016-17 F.Y. 2017-18 Month Cash Sales (Ind. Tax) Cash Deposits Cash sales (Ind. Tax) Cash Deposits Cash Sales (Ind. Tax) Cash Deposits Cash Sales (Ind. Tax) Cash Deposits April 17670400 19000000 29244092 27100000 3578487 15000000 23885405 21500000....
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.... the preceding year in the same period (December, 2015 to March, 2016) the variation was 61.34%. Accordingly, it can be said that it was the post demonetization period which has contributed to the decline in overall cash sales in the year under consideration in comparison to the preceding year. It can further be derived from this analysis that at the time of demonetization i.e. on 08.11.2016 there was not much variation in the cash sales/turnover of the assessee company in comparison to the preceding years. 40. Rebutting the arguments of the AO that the average monthly cash in hand balance in the preceding year was Rs. 75,00,000/- however, as on 08.11.2016 the assessee had abnormal cash in hand balance of Rs. 3.40 Crores, the ld. AR submitted that the AO was trying to compare average of cash in hand balance of the assessee company as on last day of every month of financial year 2015-16 with the cash in hand balance as on 08.11.2016. It was argued that the AO has conveniently chosen 12 specific dates last day of each month of financial year 2015-16 and compared with the cash balance as on 08.11.2016. It was argued that the cash in hand balance can never have similar pattern on spec....