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2012 (8) TMI 1232
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....ate Limited company engaged in the business of trading in Paper. The assessee filed its return of income declaring total income at Rs.72,300/- on 15-09-2005. A survey action u/s. 133A was carried out in the case of the assessee on 13-03-2007 and subsequently proceedings u/s. 147 were initiated. The company was also directed to get its accounts audited u/s. 142(2A) of the Income Tax Act and the auditors furnished their report to the AO on 11-04-2008. 3. During the assessment proceedings the AO noted that the assessee has made purchases of 288 Metric Tons of Paper costing Rs.99,89,840/- from the following two persons : 1. Komal Enterprises, 76, Keshavji Naik Road, Ist Floor, Masjid Bunder Road, Mumbai - 400 009. Rs. 2,85,41,447/- 2. Pritam Enterprises, 30, Kaji Sayyed Street, Mumbai -400 009. Rs.1,04,40,94,343/- 4. The assessee claimed to have transported these goods by M/s. Sahil Transport Company. He further noted that all these purchases have been shown to have done only on two days, i.e. on 21-03-05 and 26-03-05. The payments have been done in cash thereafter on 29-03-05 and 30-03-05. The AO had certain doubts as to how the above mentioned two parties sold....
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....se. (iii) The parties from whom purchases have been shown are duly registered under the State Sales Tax Act as well as Central Sales Tax Act. (iv) Expenditure on account of transportation has been duly supported by bills and vouchers, which have been duly debited in the books of accounts. (v) Day to day qualitative stock is maintained. (vi) The sale consideration has been received through the letter of the credit (LC) issued by the BBIL. (vii) The bank that has cleared the LC has physically verified the stock before releasing payments against the LC, which is evident from the sale invoices bearing signature of the bank authority with a stamp of the bank. (viii) Following judicial pronouncements have been cited in favour of the assessee : J.R. Solvent Industries Pvt. Ltd., 68 ITD 65 (Chd) (TM) Balaji Textile Industries Industries Pvt. Ltd., Vs. ITO 49 ITD 177 (Bom) Satlej Cotton Mills Ltd. Vs. ACIT 96 Taxmann 22 (Del) Bansal Steel Rolling Mills Vs. ITO 96 Taxmann 29 (Del) CIT Vs. M.K. Brothers 163 ITR 249 (Guj) (ix) In view of above facts the assessee has requested that the pu....
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....redit cannot be shown at the time of purchases as it was not quantified and issued in the name of the assessee on that day. How BBIL was aware of the value to be quoted in the LC before completion of the transactions is also surprising if the assessee's plea is accepted for the sake of discussion that it has LC before purchasing goods. In case the BBIL has mentioned the value, it means that it is deciding the sales and purchases of the assessee and the assessee is a front company of BBIL. It is surprising to note that the cash has never been withdrawn from the bank by the assessee. It has been withdrawn by one of the employee of BBIL as evident from the photocopy of the self-drawn cheques encashed from the bank. During the course of survey and post survey proceedings, Shri Ramakant Javalgekar has stated that it has given the duly signed self dawn cheques to the Shri Nitin Sontake, MD of the BBIL or Kishore Pilankar, an employee of the BBIL. Initially, it has been stated that these persons have never returned the cash after encashment of cheques but later this fact has been denied in the statements recorded in March 2007 in post survey proceedings. Thus it can be inferred that the s....
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....ce though actually incurred as discussed above. Therefore, the books of accounts are rejected u/s. 145 of the I.T. Act and assessment therefore, is completed u/s. 144 of the I.T. Act. 3.6 In view of the above facts, I hereby draw the inference that since the sales has taken place therefore, the purchases have been done but not from the parties whose name appears in the books. The purchases have been done from some third parties in cash. The payment thereof has been done out of unexplained/unaccounted sources to that parties prior to the date shown in the books of the accounts. Thereafter, the assessee has regularised such expenditure by showing the purchases in the name of the above suppliers as mentioned in Para 03 above. Thus the investment in the unexplained expenses and handling charges is being worked out. Since the quality and quantum of paper sold to the BBIL has been confirmed by the BBIL, therefore, these qualitative and quantitative details are being taken for working of the unexplained/unaccounted purchase price. The average market rate of the above mentioned quality paper and freight charges as shown in the bills of M/s. Tamilnadu Newsprint and paper Ltd and M/....
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....sing Officer on the additional evidence were called for and the learned Assessing Officer has objected to the admission of the additional evidence vide his letter dated 13-02-2009, contents of which are already reproduced hereinbefore. After perusal of material on record, it is clear that the learned Assessing Officer gave appellant more than reasonable opportunities for producing any material in support of its claim relating to genuineness of purchases. The learned Assessing Officer has also provided sufficient opportunity to the appellant for placing its contentions before him. Taking into account all these aspects of the matter and material on record, it is held that the appellant's case does not come within the purview of sub-clause (c) and or (d) of clause (1) of Rule 46A of the Income Tax Rules , 1962. Accordingly, it is held that the additional evidence submitted by the appellant is not admissible within the meaning of sub-clause(c) and (d) of rule clause (1) of rule 46A of the I.T. Rules, 1962 and accordingly, rejected. 4.5 As regards the issue of addition on account unaccounted/unexplained purchases, from the perusal of material on record, following aspects emerge....
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....done transportation work for the appellant. Shri Pande has submitted a letter to the Assessing Officer on 09-06-2008. The operative portion of which is reproduced as under : "This is further to my statement given to you in the above referred from time to time. As desired by you enclosed please find Xerox copies of the following documents : 1. Lease deed in respect of my current place of business at above mentioned address for the period from 20-07-2007. 2. I had been carrying out my business as transporter carrier from the place at the premises of Associated Trader & Engineering at 4th Floor, Shammik Chambers, Baroch Street, Bombay - 400 009. The copy of telephone bill 9MTNL) of the year 1999 is enclosed. 3. The copy of purchase order of Lloyds Steel Industries Ltd. Mumbai dated 25th May 1999 in my name (Sahil Transporter Company) on the address mentioned in Para 2 above is enclosed. 4. Copy of PAN Card is enclosed. 5. My business is being run from new address where name board of Sahil Transport is already in existence. Photograph of the same has already been produced before you today. From the foregoing, I feel that I ....
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....r, Shri Padmanabhan. v) The fact that the authorised person from M/s. Selection Mercantile Co. Pvt. Ltd. and transporter stated that the purchases and transportation have been made, has been recorded by the learned Assessing Officer in para 3.1 of the assessment order. The learned Assessing Officer has mentioned that the two persons failed to produce income tax assessment details, Profit & Loss A/cs and balance sheets of these two concerns. However, if income tax details have not been produced by the two persons, the appellant cannot be held responsible for the same. vi. The case of the appellant was subjected to special audit u/s.142(2A) and the issue relating to genuineness of purchases of the appellant has been examined by the special auditor. According to the special auditor, the purchases effected by the appellant company and its corresponding sale are genuine and duly supported by evidences. The extracts from the report of the Special Auditor have been reproduced herein before. vii. It is clear from Para 3.1 of the assessment order that all these purchases have been made within a period of five days and payments have been made thereafter. Now, the c....
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....ndavia, Shri Ashok Pande and Chief Manager of the Federal bank. 9. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us with the following grounds : "1. On the facts and in the circumstances of the case, the learned CIT(A) erred in deleting the addition of Rs.99,89,840/- made on account of investment in unexplained expenses. 2. On the facts and in the circumstances of the case, the learned CIT(A) erred in not considering the fact that the purchases have been made from some third parties in cash and the payment thereof has been done out of unexplained/unaccounted sources to those parties prior to the date shown in the books of accounts. 3. The order of the CIT(A) may be vacated and that of the AO restored. 4. The appellant craves leave to add, amend, alter any of the above grounds of appeal." 10. The learned DR heavily relied on the order of the AO. He submitted that the AO had conclusively proved that the assessee had not purchased goods from the so called two concerns but might have purchased from some other parties in cash and supplied the goods to an associate concern. The whole exercise is a colourable one and the ....
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....he AO made addition on account of investment in unexplained expenses and freight and handling charges and made addition of Rs.1,01,50,000/- as per Para 7 of this order. 14. We find the learned CIT(A) after considering the statement of Sri Arun P. Madania, authorised person of Selection Mercantile Company Pvt. Ltd., Sri Ashok Pande, partner of Sahil Transport Company and Ramesh Padmanabhan, Chief Manager of Federal bank of India which was providing credit facilitates to Blue Bird India Pvt. Ltd. to whom the assessee has made sales accepted the purchases made by the assessee company as genuine. While doing so, he has also considered the report of the special auditors appointed by the AO u/s.142(2A) who have mentioned that the purchases effected by the assessee company as well as the corresponding sales are genuine and are duly supported by evidences. Under these circumstances and in view of the detailed order passed by the learned CIT(A) which has already extracted at para 8 of this order we find no infirmity in the same. Accordingly, we uphold the same and the grounds raised by the assessee are dismissed. CO No. 30/PN/2010 (By assessee A.Y. 2005-06 ) : 15. Grounds raised by....
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....hat due to non-deduction of Tax from the freight payment and payment of the same to the credit of the Central Government the AO made the disallowance of Rs.1,11,46,319/- u/s. 40(a)(ia) which has been upheld by the learned CIT(A). He submitted that since all payments have been made before 31-03-2006, therefore, in view of the decision of the Visakhapatnam Special Bench of the Tribunal in the case of Merilyn Shipping and Transport Vs. ACIT reported in 136 ITD 23 no disallowance us/.40(a)(ia) is called for. He submitted that the matter may be restored to the file of the AO to verify the same and decide the issue in the light of the Visakhapatnam Special Bench of the Tribunal in the case of Merilyn Shipping and Transport (Supra). The learned DR on the other hand while supporting the order of the CIT(A) submitted that he has no objection if the matter is restored to the file of the AO for deciding the issue afresh and in accordance with law. 22. We have considered the rival arguments made by both the sides. In this case additions have been made on account of non-deduction of tax from the freight payment. It is the submission of the learned counsel for the assessee that all the paymen....