TaxTMI 
TaxTMI 
2024 (11) TMI 236
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....Act‟) was conducted in the hands of the assessee on 17-03-2021 alongwith Rubberwala group and others. Consequently, the assessment for the AY.2020-21 was completed u/s 143(3) r.w.s 153A of the Act. The assessment for the AY.2021-22 was completed u/s 143(3) of the Act. 3. The issue relating to addition made u/s 69C of the Act towards unexplained expenditure is common in AYs. 2020-21 and 2021-22. We shall deal with the same first. 3.1. During the search action conducted at the residence of Shri Dikesh R. Mehta, one of the partners of the assessee herein, the data backup of his phone was taken. It contained some image files and Excel files. During post search investigation, the Assessing Officer (AO) examined those details and took the view that the "image files appear to be invoices" issued by Chinese vendors in the name of "Raj-DK" and the Excel files "appear" to be freight invoices issued by the Chinese suppliers for shipment/delivery of goods to "Raj-DK". The term "Raj-DK" was deciphered as the assessee herein by the AO. The image files, which were considered to be invoices, contained the name of Chinese vendors, name of customer, date of order, description of goods, i....
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....contentions which have been already been dealt in detail above. No evidence has been brought forward by the assessee. It has been just stated that the images found are merely quotations, but the assessee has not been able to bring forward any such party, to whom these quotations were sent. Once the material is seized, the onus of providing explanation for the same lies on the assessee. It has to submit documentary evidences in support of his contentions." Accordingly, the AO assessed the amounts of Rs. 24,02,088/- and Rs. 59,56,592/- as unexplained expenditure of the assessee u/s 69C of the Act respectively in AYs. 2020-21 and 2021-22. 3.5. In the appellate proceedings, the Ld.CIT(A) confirmed the addition of Rs. 24,02,088/- made in the AY.2020-21. 3.6. However, he modified the addition made in AY.2021-22. The Ld. CIT(A), in AY.2021-22, took the view that there may be rotation of funds for making purchases for the whole year. He took the turnaround period as two months. The Ld.CIT(A) also took the view that the addition of Rs. 24,02,088/- made in AY.2020-21 should be considered as capital available to the assessee in the succeeding year. Accordingly, by making his own comp....
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....he name of buyer is mentioned as "Raj-DK" and no address is mentioned. Even though, "Raj-DK" may be linked to the assessee, yet in the absence of full name and address of the assessee, it may not be correct to presume that these documents are „Invoices‟. (c) For the above said reason, the explanation of the assessee that image files are only "quotations" would merit acceptance. (d) The submission of the assessee was that it has never imported goods from China. We notice that the AO has not disproved this claim of the assessee. It is not the case of the AO also that the books of accounts of the assessee show that there were imports from China, so that an inference could be drawn against the assessee. When the assessee has not imported goods from foreign countries, then the burden would shift to the AO that the goods mentioned in the image files were indeed imported by the assessee. However, the AO has not established that the goods mentioned therein have actually been imported and received by the assessee. (e) The Excel files contained shipping details. However, it is not established that the goods mentioned in the Excel files were actually shi....
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....oose papers" are not books of account and the entries therein are not sufficient to charge a person with liability. 3.11. In the case of CIT vs. Lavanya Land (P) Ltd (2017)(397 ITR 246) (Bom), it was held that where entire decision is based on huge amounts revealed from seized documents but not supported by actual cash passing hands, no addition can be made. In the instant case also, the AO has drawn presumptions that the image files and Excel sheets represent import of goods by the assessee. However, the said presumption is not supported by any other evidence to prove that the assessee has actually imported the goods mentioned in the above said files. 3.12. We may note here that the Ld A.R placed reliance on the following case law in order to contend that the documents downloaded from electronic items cannot be relied upon on its face value, but they need to be corroborated with other evidences: - (a) Smt Abba Bansal vs. PCIT (2021)(132 taxmann.com 231) (Delhi Trib) (b) ACIT vs. Shanker Nebhumal Uttamchandani (2024) (161 taxmann.com 536)(Surat Trib) (c) Virendra Singh Ratnawat vs. ACIT (ITA Nos. 179 to 181 (Jaipur Trib) (d) ACIT vs. Shri M....
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....aximum amount of outstanding was shown at Rs. 17,75,92,611/- in one file. The assessee was not asked about this file in the statement taken us to sec. 132(4) of the Act. When enquired about the file in post search enquiries, the assessee submitted that these files do not pertain to the business carried on by it. It was further submitted that they might have been sent by someone to take print outs. However, the AO noticed that some of the names mentioned in the list were found in the contact list of the assessee. Accordingly, the AO treated the same as unexplained money and added the same to the total income of the assessee u/s 69A of the Act. 4.2. The Ld.CIT(A), however, took the view that the entire debtors balance should not be taxed. He took the view that the capital requirement would be of 10 days and hence that amount should alone be taxed. He estimated the same at Rs. 48,65,551/- and directed the AO to assess the same. In addition to the above, the Ld.CIT(A) took the view that the profit element involved in the debtors balance should be assessed to tax. He estimated the same at Rs. 79,56,149/-, calculated @ 4.48% of Rs. 17,75,92,611/- and directed the AO to assess the same....
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....ver of the assessee for the year ending 31.3.2021 was Rs. 2.69 crores only. Hence, the alleged sundry debtors list was not commensurate with the level of activities carried on by the assessee. (f) In any case, the assessee has specifically stated that the same does not belong to it. However, no material was brought on record by the AO to disprove it. (g) The AO did not conduct any enquiry with any of the sundry debtors in order to find out whether they have purchased goods from the assessee. (h) Merely because some of the names found in the Sundry debtors were matching with the contact list of the assessee, it cannot be said that entire list shall belong to the assessee only. The said fact should have been corroborated by the AO by making due enquiries with the sundry debtors, which the AO has failed to do. (i) The Ld A.R also submitted that the search official/AO did not find any whatsapp chat between the assessee and the persons mentioned in the list. It proves that the assessee has not supplied goods to any of them. Further, no other material like copy of invoices, balance confirmation letters, any other correspondence with any of such persons....