TaxTMI 
TaxTMI 
2024 (8) TMI 936
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....ed in law in holding that addition of Rs. 50,00,000/- under Section 69C, being unaccounted speed money payments, cannot be made when the assessee has not claimed the expenditure in the books of accounts? iv. Whether the ITAT has erred in holding that the source for said payments is withdrawals from bank accounts without appreciating that if it had been so, the payments also would have been accounted in the books of accounts in some form or other? v. In the facts and circumstances of the case, whether the ITAT has erred in deleting the addition made towards difference in purchases under Section 69C amounting to Rs. 5,67,68,336/-? vi. Whether the ITAT has erred in not considering that the assessee has furnished a different purchase figure of Rs. 31,09,77,347/- for the period till the date of search as against the figure of Rs. 36,77,45,683/- disclosed by the assessee in the Settlement Application furnished by the assessee for the Assessment Years from 2003-2004 to 2008- 2009 which is almost matching with the purchase figure for the period of Rs. 36,79,45,683/- adopted by the Assessing Officer and that the assessee has not reconciled this discrepancy? 2. ....
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.... 1, Chennai. 6. As far as the Remand Report No.AAAFT2536L/A.Y.2009- 2010/ACIT/CC-1(1)/CHENNAI dated 20.11.2020 is concerned, it reads as under:- "Issue 3: Unexplained expenditure u/s 69C towards difference in purchases of Rs. 5,69,68,520/-: i. In respect of the issue of unexplained purchases, the assessee vide para 12 of the written submissions stated that the assessee is not aware of the data set out at page 5 of the assessment order. The date mentioned in page 5 of the assessment order is reproduced as below: Description Amount (Rs.) For the F.Y. Ending 16.10.2008 (date of search) Raw material Packing material 31,87,05,659 + 4,92,40,024 = 36,79,45,683 ......(a) After search till 31.03.2009 As per purchase vouchers produced by assessee 19,83,98,625 .......(b) Shown in P&L account filed along with R/I 50,93,75,389 .......(c) Difference (a) + (b) - (c) 5,69,68,520 ii. In this connection, it is submitted that the difference in the quantum of purchases as per the Profit & Loss Account filed as per the Return of Income and the quantum of purchases made during the periods "from 01.04.2008 to till th....
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.... basing on the seized material and that on the same basis, the value of closing stock as on 31.03.2009 would also be revised. (A copy of the letter dated 31.08.2010 of the assessee is enclosed herewith for ready reference as per the Annexure-3). iv. Further, it is submitted that during the course of the assessment proceedings, the assessee vide letter dated 30.12.2010 stated that it is not possible for the assessee to comment on this issue unless source of information is given to the assessee. However, the assessee filed two trading accounts for the periods "from 01.04.2008 to 20.10.2008" and "from 21.10.2008 to 31.03.2009" showing details of purchases, instead of furnishing trading accounts for the required periods "01.04.2008 to 16.10.2008 (Date of search)" and "17.10.2008 to 31.03.2009". (A copy of the assessee's letter dated 30.12.2010 is enclosed herewith for ready reference as per Annexure-4). As seen from the Trading Account for the period from 21.10.2018 to 31.03.2019 filed by the assessee, the total of purchases works out to Rs. 14,13,38,945/- as noted below: Raw Material :: Rs. 6,84,51,080 Packing Material :: Rs. 1,80,94,493 Excise Duty ....
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....and report of the Assessing Officer and same is available at page 64 of the ld. CIT(A) order. 8. The Appellate Tribunal has further held that even the Assessing Officer did not have the benefit of relevant workings of stock difference arrived at during the course of search by the Investigation Wing and that the Assessing Officer has completely erred in making additions towards difference in stock in trade as unexplained expenditure u/s. 69C of the Act. 9. Under these circumstances, the Assessing Officer was directed to delete the additions made towards difference in stock in trade u/s. 69C of the Act. Paragraphs 16 and 17 of the Appellate Tribunal Order reads as follows:- "16. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The sole basis for the Assessing Officer to make additional towards unexplained expenditure, being difference in stock in trade at Rs. 5,69,68,520/- is on the basis of working of stock in trade as on the date of search after taking into account purchase of raw material and packing material. The Assessing Officer has worked out difference in stock in trade at Rs. 5,69,68,520/-,....
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....r the period 01.04.2008 to 31.03.2009, amounting to Rs. 50,93,75,389/- to the total purchases worked out by the Assessing Officer at Rs. 56,63,44,300/- without any details as to what is the opening stock, closing stock, purchase returns and purchase of capital goods, as considered by the assessee in its reconciliation. From the above, it is clear that as alleged by the assessee there is no basis for the working of difference computed by the Assessing Officer towards stock in trade and this fact has been further strengthened by a letter written by ACIT, Central Circle-1(1), to the CIT(A) on 16.04.2015, where the Assessing Officer categorically admitted that there is no details available with regard to stock difference worked out by the Investigation Wing and further he has written a letter to the Investigation Wing to clarify the basis for adopting stock difference of Rs. 5,60,68,520/- in appraisal report. From the observations of the Assessing Officer in his letter dated 16.04.2015 submitted to the ld. CIT(A) during appellant proceedings, it is clear that the Assessing Officer has made additions towards difference in stock in trade/purchases as unexplained expenditure u/s. 69C of t....