TaxTMI 
TaxTMI 
2024 (7) TMI 793
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....iders, completely controlled by Shri Chetan Kantilal Shah ? B. Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT has justified in restricting the addition from 100% to 13.05% of the bogus purchases made by the AO ignoring the fact that Shri Chetan K. Shah has admitted in his statement u/s.131(1A) given during the survey proceedings conducted by the investigating wing of department that he has engaged in the business of accommodation entries and hence AO was correct in concluding that the assessee was a beneficiary of the accommodation entry in guise of purchase?" 2. Heard learned Senior Standing Counsel Mr. Karan Sanghani for learned advocate Mrs. Kalpana Raval for the Appellant - Revenue. 3. Brief facts of the case are that the respondent - Assessee is a HUF. It filed the return of income for Rs. 9,64,960/- on 01.10.2017 for Assessment Year 2017-18. The case of the respondent was selected for scrutiny, and during the course of regular assessment, an addition was made on two counts; (1) on bogus purchases of Rs. 75,10,503/- and (2) cash deposit of Rs. 80,00,000/-, by the Assessing Officer while finalizing the total income of Rs. 1,64,75,460/-....
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....sponding sales also need to be ignored but the assessing officer has not done so. Therefore, this leaves with unjustified adjustment in case of the assessee. Therefore, ld CIT(A) noted that many high courts and tribunals have dealt with this issue of bogus purchases in greater details and have upheld that certain gross profit shall be added to total income instead of adding entire purchases (especially when corresponding sales are not challenged).... 11. The assessee has also submitted before ld CIT(A) that the entire amount should not be treated as bogus and reasonable gross profit at the rate of 5% shall be added to the total income of assessee in wake of various judicial precedence pronounced by ITAT. However, it was observed by ld CIT(A) that the assessee's business is recently started and it is into second year of its operations. During the year under consideration the gross profit earned by assessee is 13.05%. Therefore, ld CIT(A) restricted the addition to Rs. 9,80,121/- (Rs. 75,10,503/- X 13.05%). We have gone through the above findings of ld CIT(A) and noted that there is no infirmity in the conclusion reached by ld CIT(A). That being so, we decline to interfere ....
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....emonetization. The assessee had cash on hand of Rs. 61,19,899/- as per the cash book on 29.09.2016 and the same was further increased to Rs. 83,03,182/- on 08.11.2016. The assessee had sufficient cash on hand of Rs. 83,03,182/- on 08.11.2016 out of which Rs. 80/- lacs were deposited during the demonetization period. The assessee used to maintain quantity details/ account and the same was filed alongwith tax audit report which lies on page 31 to 33 of the paper book. We note that assessee has already covered huge amount of Rs. 1.10 crores under PMGKY scheme against the doubtful transactions. The assessee urges that the said disclosure covers all the irregularities and, therefore, further addition of Rs. 80/- lacs being the amount of cash deposit in the demonetization period is unjustified. We note that amount of Rs. 80,00,000/-(being cash deposited during demonetization) is a part of disclosure of 1.10 Crores by the assessee, in the scheme of Pradhan Mantri Garib Kalyan Yojana, hence further addition should not be made. The said fact has been examined by the ld CIT(A) also. Therefore, we find that there is no infirmity in the order of ld CIT(A). The conclusions arrived at b....
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....sources of credits in the cash book. Therefore, in absence of any concrete details or evidences with respect to the so-claimed cash sales/cash deposits made by the Assessee, the same cannot be accepted. It has to be construed that the Assessee has not been able to substantiate with cogent details and evidences, the genuineness of its claim with respect to cash deposits amounting to Rs. 80,00,000/- and therefore, this amount requires to be brought within the ambit of taxation. 2.4 2.4 The Assessee had deposited cash amounting to Rs. 80,00,000/- (a part form amount disclosed in PMGKY) in its bank accounts maintained with ICICI Bank Ltd. during the Demonetization period (09/11/2016 to 30/12/2016). Repeated notices have been issued to the Assessee however, the Assessee had not been able to substantiate its claim. Inquiries have been undertaken to gather and collection information pertaining to the income and transactions of the Assessee. The statement of the bank accounts maintained with ICICI Bank Ltd. during the Demonetization period (09//11/2016 to 30/12/2016) held by the Assessee has been called for and analyzed. xxx xxx xxx In light of the above, the aggregate of cash dep....