TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 383
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....nd submitted the relevant informations as called for. 4. During assessment proceedings, AO observed that the assessee has received total contract for transportation of earth at Attibeli Hobli, Anekal Taluk, Bangalore Urban District, Karnataka is for Rs. 18,07,50,932/- whereas assessee has sub-contracted the said work to 17 parties for total amount of Rs. 21,37,36,472/-. He observed that even assessee managed to execute the work order without any escalation or additional cost, it will lose Rs. 3,29,85,540/- on the abovesaid contract. He observed various abnormal features in the result declared by the assessee and in order to investigate, further summons u/s 131 of the Act were issued to several sub-contractors and service of summons were reproduced in the assessment order at pages 5 & 6. The AO observed that out of 17 sub-contractors, 16 were not found at the addresses given by the assessee. The assessee was show-caused as to explain and asked to produce sub-contractors before him. Since assessee has not produced any sub-contractors and also not submitted various documents to satisfy the AO, the AO proceeded to disallow the total expenses claimed by the assessee of Rs. 21.37 crores....
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....n services amounting to Rs. 22,81,51,404/-. This ground of appeal pertains to income earned by the appellant on account of transportation services provided by it as declared in the P&L Account. It is observed that the appellant has claimed transportation/logistic charges separately under the sub-head operational cost which was amounting to Rs. 22,36,82,899/-. 11.5 The appellant submitted following details of receipts and expenditure on account of transportation services (paper book page No.53). ADITI INFRABUILD AND SERVICES LIMITED DETAILS OF TRANSPORTATION AND LOGISTIC CHARGES PAID Sr.No. Name Address PAN No. Amount 1 Shri Krishan Grit Co. 521, Ring Road Mall, Delhi AASPG7488G 12,241,968.00 2 Distribution Logistics Infrasturcure Pvt. Ltd. #484, Laxmi Arcade, 2nd Floor, 27th Main, 17th Cross, HSR Layout, Sec.II, Bangalore AABCV7123P 180,750,932.00 3. Ambit Logistics Pvt.Ltd. Door No.06, 3rd Main, 8th Cross, Venkatapura, Kormangala, Bangalre AABCM3828L 35,158,504.00 Total 228,151,404.00 ADITI INFRABUILD AND SERVICES LIMITED DETAILS OF TRANSPORTATION AND LOGISTIC CHARGES PAID Sr.No. ....
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....unt of transportation services and the transportation expenses claimed thereon have been accounted for by the appellant separately in its P&L account. The transportation services have been treated as a separate stream of revenue and break up was provided in the paper book. The AO did not make any adverse remarks in his remand report with respect to this contention of the appellant. Accordingly, I find that the allegation of the AO in the assessment order that the transportation expenses with respect to transportation services have been claimed under other heads of expenses is unsupported by any evidence and is presumptive in nature. The disallowance of 100% transportation charges on the ground that the sub-contractors were found to be bogus is too harsh. At the same time, I also find that the GP of 1% shown by the appellant is too little and devoid of commercial sense. The appellant has definitely suppressed its income by resorting to bogus bills. The issue of bogus purchases and estimation of suppression of profit through such purchases have been much discussed and debated by the various courts. In many judicial pronouncements on the issue, the courts have taken a view that in the....
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....the case and in law, the CIT(A) ought to have deleted the entire addition of Rs. 21,37,36,472/- made by the AO. 2. On the facts and circumstances of the case and in law, no notice under section 143(2) was served on the appellant within time prescribed under the law and hence the assessment order passed by the AO is illegal, bad in law and without jurisdiction and CIT(A) erred in not holding so." "Revenue's Appeal (ITA No. 1557/Del/2024) 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in partially allowing the appeal of asses see partially without considering the facts and circumstance of this case. 2. That on the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 18,70,19,413/- (out of total addition of Rs. 21,37,36,472) being 12.5% of purchases made from bogus suppliers. 3. The Ld.CIT(A) has ignored the finding of AO during assessment proceedings wherein the parties said to be bogus, did not respond to the notices issued by the Assessing Officer. 4. The Ld.CIT(A) has ignored that the Summon u/s 131 was issued to all the parties asking them to appear before the undersigned and the foll....
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....fore, notice u/s 143(2) could not have been issued after 30/09/2017. 5. Since, the notice u/s 143(2) in this case was issued on 23/08/2018, the same is bad-in-law, without jurisdiction and barred by limitation. 6. The CIT(A) has dealt with this issue in para 10 of his order and has held that notice u/s 143(2) issued was valid. The reasoning given by the CIT(A) for holding so is that original return of income was filed by the appellant on 26/09/2016. This return was found to be defective by the assessing officer and defects were removed and rectified return was filed on 12/07/2017. According to the CIT(A), the notice u/s 143(2) could have been issued upto 30/09/2018, (when reckoned from the rectified return) and, therefore, according to CIT(A), the notice u/s 143(2) issued on 23/08/2018 was valid. 7. Thus, the issue for consideration, is whether the time limit for issue of notice u/s 143(2) is to be reckoned from the date of original return or the rectified return u/s 139(9). 8. The issue is no more res-integra. It is a settled law the once the defects are removed, the same would relate back to the original date of filing of return of income and time limit for issue of notic....
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....r the provisions of section 143(2) of the Act, no notice u/s 143(2) can be served on the assessee after the expiry of six months form the end of the financial year in which the return is furnished. The assessee has raised the above issue before the ld. CIT (A) and ld. CIT (A) has decided that the notice u/s 143(2) is proper. After considering the facts on record, we observed that the issue raised by the assessee is for the purpose of issue of notice u/s 143(2) the date should be reckoned from the date of original return rather finally rectified u/s 139 (9) of the Act. We observed that exact similar issue was considered by the Hon'ble jurisdictional High Court in the case of SMC Comtrade Ltd. vs. ACIT (supra) and they considered the exact similar jurisdictional issue as under :- "9. Significantly, the AO took up the original ROI filed on 14.10.2016 for processing on 22.11.2017, after the defects were removed. Therefore, the AO considered the error-free ROI as the return that was required to be processed. 10. Thus, the submission advanced on behalf of the petitioner/assessee, that the return date relates back to the date on which the original ROI was filed seems to have been the ....
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....hat the return filed by the assessee was accepted by the Assessing Officer as a legally valid return and he had acted upon the same. The Tribunal set aside the order of the Commissioner of Income-tax (Appeals). On a reference made to the High Court, it was held that once the return has been found to be valid and only a defect within the meaning of section 139(9) of the Act was found then the Commissioner of Income-tax (Appeals) was not justified in levying interest. 6. We are in respectful agreement with the view taken by the Division Bench of the Calcutta High Court in the case of Bharat Refineries Ltd., [1986] 162 ITR 652; which has been correctly followed and applied by the Tribunal. The finding recorded by the Tribunal in the instant case that the return was defective in contradistinction to be invalid must be regarded as a question of fact. Moreover, the absence of profit and loss account and balance-sheet from the return is itself has been considered by clause (e) of the Explanation appended to sub-section (9) of section 139 of the Act. Therefore, it cannot be concluded that the return, in fact, was filed on the day when the defect was removed, i.e., on January 3, 1992. The....
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....barred. Consequently, the notice under Section 142(1) of the Act will also collapse. The impugned notices are, accordingly, quashed." 14. Further we observed that in the case of Kunal Structure (India) (P) Ltd. vs. DCIT (supra), the Hon'ble Court has held as under :- "20. In the facts of the present case, as discussed earlier, the petitioner filed its return of income under sub-section (1) of section 139 of the Act on 10.09.2016. Since the return was defective, the petitioner was called upon to remove such defects, which came to be removed on 07.07.2017, that is, within the time allowed by the Assessing Officer. Therefore, upon such defects being removed, the return would relate back to the date of filing of the original return, that is, 10.09.2016 and consequently, the limitation for issuance of notice under sub-section (2) of section 143 of the Act would be 30.09.2017, viz. six months from the end of the financial year in which the return under sub-section (1) of section 139 came to be filed. In the present case, it is an admitted position that the impugned notice under sub-section (2) of section 143 of the Act has been issued on 09.08.2018, which is much beyond the period of ....