TaxTMI 
TaxTMI 
2024 (4) TMI 264
X X X X Extracts X X X X
X X X X Extracts X X X X
....s, in form of price difference existed in certain items as supplied by specified vendors/suppliers at Chakan Plant only. 2. That on the facts and in the circumstances of the case, the Ld. CIT (A) has erred in law and on facts in deleting the addition of Rs. 23,30,303/-, made u/s 69A by the AO, without appreciating the fact that Shri Deepak Jain being principal person of the company has offered the income vide statement recorded u/s 132(4) of the Act on 24.12.2017. 3. That on the facts and in the circumstances of the case, the Ld. CIT (A) has erred in law and on facts in deleting the addition of Rs. 39,68,55.017/- made by the AO, without appreciating the detailed reasons given in the assessment order and without appreciating the fact that incriminating documents, in form of valuation details of stock recorded in the seized/impounded document, profit on which was worked out at 30.94% against the margin 19.39% shown by assessee company. 4. That on the facts and in the circumstances of the case, the Ld. CIT (A) has erred in law and on facts in deleting the addition of Rs. 39,68,55,017/-, made by the AO, without appreciating the detailed reasons given in the assessment order and w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....k recorded as the seized/impounded document, profit on which was worked out at 30.94% against the margin 17.04% shown by assessee company. 2. That on the facts and in the circumstances of the case, the Ld. CIT (A) has erred in law and on facts in deleting the addition of Rs. 8,77,96,511/-, made by the AO, without appreciating the detailed reasons given in the assessment order and without appreciating the fact that assessee had suppressed its valuation of stock as on 30.11.2017 which had direct impact on profitability of the assessee. 3. That on the facts and in the circumstances of the case, the Ld. CIT (A) has erred in law and on facts in deleting the addition of Rs. 8,77,96,511/-, made by the AO, without appreciating the fact that Shri Deepak Jain (MD) in his statement recorded u/s 132(4) of the 1. T. Act on 24.12.2017 had voluntarily offered the differential value of stock to be its undisclosed income and pay tax accordingly. 4. That the order of the CIT (A) is perverse, erroneous and is not tenable on facts and in law. 5. That the grounds of appeal are without prejudice to each other. 6. That the appellant craves leave to add, amend, alter or forgo any ground(s) of ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the grounds mentioned above. 6. Ground No.1 & 2 are regarding deletion of addition of Rs. 23,30,303/- made u/s 69A of the Act. The Ld. DR submitted that the Ld. CIT(A) deleted the addition without appreciating the detailed reasons given in the assessment order and without appreciating the fact that incriminating documents in form of price difference existed in certain items as supplied by specified vendors/suppliers at Chakan Plant only. Further submitted that the Ld. CIT(A) has deleted the addition without appreciating the fact that Sh. Deepak Jain being principal person of the company has offered the income vide statement recorded u/s 132(4) of the Act, therefore, sought for intervention of the Tribunal. 7. Per contra, the Ld. AR submitted that the seized paper namely "Adjustment.xlsx", found in from the Laptop of one Mr. Gridhari Lal Goyal an employee of the assessee does not contain any reference to assessment year 2018-19 which has been examined by the Ld. CIT(A), further, the statement given by the said Gridhari Lal Goyal and Ashok Kumar were duly retracted within five days of the search, the amount mentioned in the excel sheet was rough working of Loyalty incentive along w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ade on the basis of assumption of excessive purchase price, which renders the addition to be notional in nature. Further, the AO made addition considering the contents of data available on the desktop of Sh. Gridhar Lal Goyal as the price difference in supplies of goods received at Chakan Plant which was found to be received in cash outside the books of account. The said statement of Sh. Girdhari Lal Goyal and Sh. Ashok Kumar have been reiterated by them vide letter dated 27/12/2017 i.e., within five days of the search, wherein they have stated that they have misinterpreted the impugned sheets under pressure. Apart from the same during the course of assessment proceedings, Sh. Girdhari Lal Goyal was cross examined by the assessee, wherein he has once again re-iterated that he was not aware of the content of the sheet and the statement recorded during survey was a statement under pressure and undue stress. Thus, considering the fact that the statement recorded during the search which has been retracted therefore, no evidentiary value can be given as held in several judicial precedents. 10. It was the case of the assessee that amount mentioned in the excel sheet was rough working of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Counsel has relied on the statement of Sh. Shailender Negi and Sh. Amit Bohra. In the statement of Sh. Shailender Negi, it was nowhere mentioned that he was indulged in any payment of cash outside the books of account to the assessee company on account of over invoicing. The Ld. CIT(A) observed that the said Shailender Negi given confusing version of having received credit notes against so called over invoicing which is illogical since such credit notes neutralized the over invoicing if any, which was duly accounted for the books of account of both the parties. The issuance of credit note by the assessee company wards off any over invoicing and no cash can be deemed to have been received on account of issuance of such credit notes. 12. In so far as the statement of Mr. Amit Bohra, he has not admitted that he has given any cash to the assessee Company. He has only stated that the quantity and the difference of pricing with respect to the impugned items which were contrary to the contents of the sheet found and impounded at Chakan Plant. Initially the said Amit Bohra maintained the stand of not indulged in any over invoicing and later on gave contradictory statement, which did not ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t filed before Ld. CIT(A) is reproduced at page 356 of paper book are duly reproduced at page 21-23 of CIT(A)'s order. After receipt of credit notes and necessary documents from the vendors the loyalty incentive were debited to the respective vendors ledgers. Copies of credit note, ledger accounts in the books of vender and ledger account in the books of the Assessee are enclosed at 103-106 of paper book. Thus, it is apparent and clearly evident from the perusal of above extracts of the regular books of account that the income in respect of loyalty incentive been already recognized by the assessee company in its regular books of account. Considering the above facts and circumstances, we find no reason to interfere with the findings and conclusion of the CIT(A), accordingly the Ground No. 1 & 2 of the Revenue is dismissed. 15. Ground No. 3 & 4 are regarding addition of Rs. 39,68,55,017/- made by the A.O. on account of unexplained investment in stock/suppression u/s 69B of the Act. The Ld. A.O. based on the loose sheet and also based on the statement of Sh. Deepak Jain, M.D, the above addition has been made. In the Appeal filed by the Assessee, the ld. CIT(A) deleted the said ad....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as valuation which was the sole basis of assuming the difference to be unexplained investment, has no legs to stand. 21. During the assessment proceedings, the AO ignored the vital evidences which formed part of the seized material. The evidences that the impugned valuation was wholly and exclusively notional in nature which was prepared for strategic purposes of presentation to prospective investors existed in the seized material itself which were incorrectly brushed aside by the Assessing Officer, which can be corroborated with the Page No. 204 to 221 of the Paper Book which contained 'Brief investors presentation' dated 05/12/2017. 22. The seized paper also establishes that the balance sheet of the assessee was being re casted on certain assumptions as on 30/11/2017. The land and building of the Assessee was also notionally valued as per prevailing market rates according to the discussions with valuers which was subject to actual valuation. Certain other assets were stated to be valued at book cost as on 30/11/2017. In the case of stock specific mention existed on the seized page regarding notional valuation to the extent of Rs. 39.68 crores in items such as CWIPFG and....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... v) PR.CIT vs GLADDER CERAMICS LTD (2018) 401 TTR 205 (Guj HC). 25. Further, Ld. AO placed reliance upon the statement of Sh. Deepak Jain. It is the case of the Assessee before us that there was no clear admission of any unexplained investment or undisclosed income on the aforesaid issue in the statement of Sh. Deepak Jain relied upon the Revenue. The statement of Sh. Deepak Jain states that, the said sheet may have been prepared for the purposes of some strategic purposes and it was only out of pressure and to buy peace of mind that he agreed to offer the differential amount to tax. The said fact has been clarified vide his letter dated 27/12/2017 filed before ADIT (Inv) Unit II, Faridabad produced at Page No. 112- 115 of the paper book. It was stated that the statement recorded during the search was an under stressed statement and the said sheet was prepared for strategic purpose for presenting before prospective investors and the copy of the said letter is enclosed at page 112-115 of paper book. The Ld. CIT(A) was rightly observed that that the act of the AO in placing heavy reliance on the statement of Mr. Deepak Jain recorded during the course of search to make additions is a....