TaxTMI 
TaxTMI 
2024 (12) TMI 496
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....missioner of Income Tax (Appeals) being erroneous in law and on facts deserve to be quashed. 4. The Appellant craves leave to add or alter any or more grounds of appeal as may be deemed fit at the time of hearing of appeal." 3. Brief facts of the case are that the Assessing Officer observed from the documents in possession/information that the assessee has deposited cash of Rs. 74,00,000/- in its bank account maintained with Bank of India, Shikohabad during the year under consideration. The AO issued letter dated 02.02.2018 to the assessee for verification of above deposits and filing of return of income. But, the assessee neither filed return of income nor submitted any reply. Case of the assessee was reopened by the AO u/s. 147 of the Act after recording reasons u/s 147 for escaped income of Rs. 74 lacs, and notice u/s. 148 was issued on 29.03.2018 and was sent to assessee by speed post. Statutory notices u/s. 142(1) were issued by the AO to the assessee, from time to time during reassessment proceedings. The assessee submitted before the Assessing Officer that PAN AAEFG1806C was in the status of firm, while the assessee is a company. It was submitted that in all the bank reco....
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....sessing Officer observed that the potato growers have to mandatorily keep their potato in the cold storage in the nearby area and in fact potato grower approaches the cold storage owner in advance to reserve space for him to keep this crop of potatoes because sometimes if there is bumper crop of potatoes, the cold storage owners deny to keep the potato crop in the cold storage and then the farmers would have suffered. The Assessing Officer observed that the assessee has paid interest on CC account amounting to Rs. 10,33,374/-, which is debited to the profit and loss account and the same was added as income in the hands of the assessee. 4. Assessee being aggrieved filed first appeal with ld. CIT(Appeals). Ld. CIT(Appeals) issued notices to the assessee and assessee filed replies on 10.11.2021 and 11.11.2021. Thereafter, the appeal proceedings were switched over to faceless regime and thereafter, there was no further submissions made by the assessee. Assessee has submitted before the ld. CIT(Appeals) that the assessee has submitted complete list of farmers to whom advances were given along with complete addresses with PANs and the assessee requested the Assessing Officer to summon t....
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....roduced by the assessee during the course of assessment proceedings, wherein the assessee has claimed to have received rent from 549 farmers for keeping 1,69,054 packets of potatoes, for which rent of Rs. 77,76,480/- is stated to be charged by the assessee. The Bench also directed ld. Sr. DR to file copy of audited financial statements. The ld. Sr DR has in compliance filed the documents as directed by the Bench, which are now part of the record of the file. The ld. Sr. DR has also filed written synopsis, which are placed on record in file. 6. I have considered the entire material placed before the Bench and heard ld. Sr. DR. I have observed that the AO had the information/documents in possession that the assessee has deposited Rs. 74,00,000/- in its bank account with Bank of India, Shikohabad. The AO made verification with the assessee, but the assessee did not reply. The AO observed that the assessee has not filed any return of income for the impugned assessment year and has also not replied to the notice issued by the Assessing Officer on 02.02.2018. The case of the assessee was reopened by the AO after recording reasons by invoking provisions of Section 147. Notice u/s. 148 of....
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.... Officer on the ground that interest free advances were given to potato growers out of interest bearing funds raised by the assessee. The assessee has explained that the assessee is running a cold storage and assessee has to keep the farmers tied up with the assessee so that these farmers can keep their potatoes in the cold storage of assessee, and the assessee can earn rent from the potatoes stored in the cold storage of the assessee. Thus, the assessee has claimed that out of business expediency, assessee has given interest free advances to the farmers, so that the farmers are tied up with the assessee and they can keep their crop in the cold storage of the assessee from which the assessee can earn rent. This explanation has been rejected by both the authorities below. Assessee has duly participated in the assessment as well as appellate proceedings. I called for the assessment records to be produced before the Bench. The ld. Sr. DR produced the assessment record before me. The assessee has given complete details of the advances paid to the farmers, during the course of assessment proceedings. Assessee was asked by the AO to produce 20 farmers and the assessee claimed to have pro....
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....quintals. On perusal of the audited financial statements, I have observed that Assessee has raised interest bearing funds from the Banks which were used for granting these advances, as the own funds available are not sufficient. The assessee has paid interest on CC Account to the tune of Rs. 10,33,374/-, which was disallowed by the Assessing Officer. I have observed that the assessee has explained that out of business expediency, the assessee has given interest free advances to the potato growers. The business expediency explained by the assessee being to tie up with the farmers by giving advances so that the farmers become committed to keep their crop of potato at the cold storage of the assessee, so that the assessee can then earn rent from the potatoes kept by the farmers in the cold storage of the assessee. There is no discrepancy pointed out by the AO in the details of rent received by the assessee from the farmers for keeping potato in the cold storage. The AO asked assessee to produce 20 farmers. The 3 farmers were produced by the assessee before the AO who supported the stand of the assessee. The affidavits of the farmers were also filed, which supported the stand of the as....