TaxTMI 
TaxTMI 
2023 (12) TMI 880
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....9; has not been -recorded by AO of the searched person and when there was no incriminating document was found. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in assuming jurisdiction and framing the impugned assessment order u/s 153C, is bad in law and against the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds . 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in exercising his jurisdiction in making addition of Rs. 89,36,4211- (i.e. 5% of Rs. 17,87,28,439/-) on account of alleged commission/brokerage as business income and that too without giving show cause notice in this regard and impugned addition made by Ld. CIT(A) is bad in law as no incriminating material has been found as a result of search warranting such addition and by recording incorrect facts and findings and merely on the basis of surmises and conjectures and without giving the opportunity of being heard and without observing the principles of natural justice. 4. That in any case and in any view of the matter, action o....
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....ngs/ observation as narrated above. Therefore it is crystal clear that M/s Super Connections India Pvt. Ltd. is a paper entity operated by the owner's of M/s Orient Craft Limited for the purposes of evasion of taxes. 6.2 Further, in view of the findings, it is a fit case for rejection of books of accounts and therefore, the books of accounts of the company is hereby rejected is] s 145(2) of the Income. Tax Act, 1961. 6.3 Accordingly the expenses booked by the assessee during the year under consideration are worked out and disallowed which are amounting to Rs. 17,78,99,299/-." 4. Against the above order, assessee appealed before the ld. CIT (A). Ld. CIT (A0 deleted the addition but made protective addition of 5% as under :- "I have gone through the assessment order and submissions of the appellant and following observations are made :- (i) The AO disallowed the total amount of Rs. 17,87,17,045/- in the case of M/s. Orient Craft Ltd. for AY 2013-14 as it was held that these purchases made from M/s. Super Connections India Pvt. Ltd. were not found to be genuine on following grounds as discussed at pre-page 26 & 27 of this order :- (a....
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....raft Ltd. is deleted at any stage, the addition deleted here would revive. (v) Further, addition to the extent discussed hereunder is confirmed in the hands of appellant company in the years under consideration. (vi) As it has been held that the appellant company in the years under consideration was only being used as conduit for booking bogus purchases by M/s Orient Craft Ltd., it is apparent that the appellant company would have been paid commission/brokerage for providing entries for bogus purchases by M/s Orient Craft Ltd. In view of the general practice as seen in the case of entry operators, the commission/brokerage paid to the appellant company is estimated at 5% and addition of Rs. 89,36,421/- to the business income of the appellant on account of the same made by the AO in 2013-14 is sustained to that extent. Similarly, addition @ 5% of the total sales booked in the name of M/s Orient Craft Ltd by the appellant company is also confirmed to the extent in other years under consideration as follows:- AY 2014-15 : 5% of Rs. 26,37,58,427/- Rs. 1,31,87,921/- AY 2015-16 : 5% of Rs. 1,96,74,569/- Rs. 98,37,284/-" 5. Against the above ord....
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....s Orient Craft Ltd. - A Y 2013-14) (PB 101, 154-155). In view of the above findings, it is respectfully submitted that the very foundation of case of the Ld. AO as well as the alleged commission confirmed by Ld. CIT(A) does not survive and therefore it is humbly prayed that the addition confirmed by Ld. CIT(A) may please be deleted. It is not out of place to submit that there is no appeal by the revenue to the best of the knowledge of the appellant. Further, it is respectfully submitted that similar matter in the case of other concerns from whom M/s Orient Craft Ltd. had made purchases have been decided by the Hon'ble Tribunal and the similar addition confirmed by Ld. CIT(A) have been deleted by the Hon'ble Tribunal in the following cases: * M/s Starline Clothing P Ltd. vs. DCIT, ITA No.7657 & 7658/Del/2019 dated 14.07.2022 for AYs 2014-15 and 2015-16 (PB 466, 471; PB 540) * Sh. Subhash Chandra Gupta vs. DCIT, ITA No. 7654, 7655 & 7666/Del/2019 dated 14.07.2022 for AYs 2013-14, 2014-15 and 2015-16 (PB 459, 465; PB 507-508) * Trendy Attire Pvt. Ltd. vs. DCIT, ITA o. 7659 & 7660/Del/2019 dated 30.06.2022 for A Y s 2014-15 and 2015-....
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....bservations made by the first appellate authority. In our considered opinion, assessee has been successful to discharge the burden of proving the purchase from M/s Super Connection India P Ltd. In the result, ground no. 12 & 13 of the assessee's appeal of the assessee are allowed and the addition of Rs. 17,87,17,045/- is deleted." 9. Similarly, ITAT in the case of Orient Craft Ltd. in ITA Nos.3311/Del/2019 & 5038/Del/2019 for AY 2014-15 vide order dated 24.09.2021 deleted the substantive addition in the hands of the aforesaid assessee by holding as under :- "In view of the above pleadings and evidences filed by the assessee the disallowance made in the assessment order and confirmed by CIT(A) is not sustainable on merit. Assessee has proved that the material was purchased from the vendors involved here and payments have been made through banking channel. Other evidences as referred clearly establish the purchase made by the assessee. We do not want to discuss each and every evidence and it would suffice to hold that in the light of these evidences which have not been rebutted with the help of any cogent material, purchases made by the assessee from the above said vendor....