TaxTMI 
TaxTMI 
2025 (2) TMI 579
X X X X Extracts X X X X
X X X X Extracts X X X X
....profit calculated by the Assessing Officer and profit declared by the assessee was added to the income declared by the assessee determining the total income at Rs. 4,92,17,410/-. 3. Later, a search was conducted on the assessee group on 11.08.2016 under section 132, and an assessment under section 153A was framed for AY 2013-14 on 28.12.2018 in the case of the assessee. In this assessment, the Assessing Officer made an addition of Rs. 93,83,826/- on account of purchases made from M/s Raja Construction, solely based on the fact that the said firm had shown sales of Rs. 93,83,826/- in its return for the relevant year, which were allegedly made to the assessee. When Kapil Tyagi, the director of the assessee company, was questioned about the firm being shown as a sundry creditor in AY 2014-15 in the books of the assessee, he allegedly accepted in his statement recorded under section 132(4) that the said firm was a bogus concern and was used to inflate the purchases of the assessee during AY 2014-15. 4. On appeal before the Ld. CIT(A), the CIT(A) vide order dated 08.06.2021 confirmed the addition to the extent of Rs. 26,10,031/- being the difference of total purchases of Rs. 93,83....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the assessee contrary to the fact that the books were himself rejected by the Ld. AO on the ground that the books of the assessee do not show true results which was accepted by the Ld. CITCA) and income was estimated by applying an estimated GP ratio. 8. That the addition made by the Ld. AO and sustained by the Ld. CITCA) is without considering the submissions made and conclusive and contemporary evidences furnished by the assessee in the form of books of accounts and bills and vouchers, proof of payment through banking channel etc. 9. That the Ld. AO as well as Ld. CITCA) has erred in making the addition on basis of presumption and assumption without bringing on record any evidence that the purchases of Rs. 93,83,826/- made by the assessee were to reduce its profit and are inflated purchases. 10. That the impugned order passed by the Ld. AO is not in accordance with the principle of natural justice. 11. That the penalty proceedings initiated under Section 271(1)(c) of the Act are invalid. 12. That the grounds of appeal are independent and without prejudice to each other." 6. At the time of hearing, ld. AR of the assessee brought ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... b) The reliance made by the Ld. AO, as affirmed by the Ld. CIT(A), upon the statement of Mr. Kapil Taygi for making impugned addition is erroneous and bad in law as it is an uncorroborated and unverified statement; c) That the statement of Mr. Kapil Tyagi as relied upon by the Ld. AO as well as by the Ld. CIT(A) pertains to AY 2014-15 and not to the impugned year i.e AY 2013- 14; d) That the approval accorded by the Addl. CIT(A) u/s 153D of the Act is a mechanical approval without application of mind. A. No addition could be made in a completed year/unabated year sans any incriminating material found during the search upon the assessee 2. That the impugned year i.e. AY 2013-14 became completed/unabated year on the date of search upon the assessee on 11.08.2016, as an assessment u/s 143(3) had already been framed for the impugned year on 31.12.2015. Therefore, as per the settled position of law in the light of judgment of Hon'ble SC in the case of Pr. CIT v. Abhishar Buildwell (P.) Ltd. 454ITR 212 (SC), an addition in impugned year in search assessment u/s 153A could only be made on the basis of incriminating material unearthed during the sear....
X X X X Extracts X X X X
X X X X Extracts X X X X
....M/s Raja Construction? Answer: I don't know Shri Akash Tyagi or M/s Raja Construction and I don't have any relation with them. Q12. In company's books of accounts for A.Y 2014-15, M/s Raja Construction whose proprietor is Shri. Akash Tyagi has been shown as sundry creditor of the company by your A.R. You are an active director in your company and you are telling that you don't know Shri. Akash Tyagi and M/s Raja Construction and you don't have any relation with them. This proves that you are giving false statement because how is not possible that M/s Raja Construction whose proprietor is Shri Akash Tyagi is the sundry creditor of your company M/s. Raja Shyama Construction Pvt. Ltd. in AY 2014-15, and you and your company don't have any relation with them. Also the registration and address of above-mentioned M/s Raja Construction is only Flat No. 507, 5th floor Gulmohar Residency, near Kalyanpur Crossing, Kanpur, UP? Answer: As per my knowledge, M/s Raja Construction which is registered at our address i.e. Flat No. 507, 5th floor Gulmohar Residency, near Kalyanpur Crossing, Kanpur, UP has no existence. The firm has been shown as sun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....M/s. Raja Construction and mentioned that address and registration of M/s. Raja Construction is "Flat 507, Gulmohar Residency, Kalyanpur Crossing, Kanpur" i.e. the site office of the assessee company. c) In this regard it is pertinent to note that this fact mentioned by investigation wing that M/s. Raja Construction's address/registered address is "Flat 507, Gulmohar Residency, Kalyanpur Crossing, Kanpur" is incorrect as the actual address of such firm was "149, Sohanjani Tagan, Muzaffarnagar", which fact can be verified from the following:- * ITR Ack. Of Aakash Tyagi for AY 2013-14 (p.no. 66 of PB) * Ledger Account of M/s. Raja Construction in the books of Assessee (p.no.70 of PB) * Ledger Account of Assessee in the books of M/s. Raja Construction (p.no.72 of PB) * Purchase invoices issued by M/s. Raja Construction to the assessee Company (p.no. 74-94 of PB) * Bank Statement of M/s. Raja Construction (p.no. 102 of PB) C. That the statement of Mr. Kapil Tvagi as relied upon by the Ld. AO as well as by the Ld.CIT(A) pertains to AY 2014-15 and not to the impugned year i.e AY 2013-14 10. Without prejudice to our a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the Ld. AO under section 153A dated 28.12.2018 for impugned year indicates that it was issued after obtaining approval under section 153D from the Addl. CIT, Central Range-Meerut. This approval was granted by the Addl. CIT via letter F.No. Addl. CIT/CR/MRT/Approval/153D/2018-19/2003 dated 28.12.2018. (Copy of letter dated 24.12.2018 written by Ld. AO to Addl. CIT seeking approval is enclosed at P.No. 109 of PB & copy of approval of Addl. CIT dated 28.12.2018 is annexed at P.no. 110 of PB) 14. A perusal of the letter dated 24.12.2018 from the Ld. AO (F.No. DCIT/CC/GZB/VVIP & SSG Group/153D/2018-19/608) to Addl. CIT seeking approval and letter dated 28.12.2018 of Addl. CIT (F.No. Addl. CIT/CR/MRT/Approval/153D/2018-19/2003) granting approval under section 153D reveals the following facts: a) That Ld. AO sought approval in 35 cases, including seven of assessee, in case of VVIP & SSG As per group of cases on which search was conducted on 03.11.2016; a) As per letter dated 24.12.2018 seeking approval, only draft assessment orders in these 35 cases were sent to the Addl. CIT for approval; b) The Addl. CIT approved all 35 cases, including 7 of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....qua "each assessment year". Therefore, such approval is bad in law being mechanical in nature rendering all proceedings consequent to it null and void. E. That the assessee sufficiently discharged its burden to show that purchases made from M/s. Raja Construction were genuine purchases and accordingly shifted the burden on the Department, which it utterly failed to discharge 18. That when the assessee was show caused regarding the purchases made through M/s. Raja Construction alleging it to be bogus purchases, the assessee sufficiently discharged its burden by showing the genuineness of purchases by submitting the following documents: a) ITR for AY 2013-14 of Aakash Tyagi, proprietor of M/s. Raja Construction alongwith its balance sheet, trading results, sale summary, (p. no. 66-69 of PB) b) Ledger Account of M/s. Raja Construction in the books of Assessee (p.no. 70- 71 of PB) c) Ledger Account of Assessee in the books of M/s. Raja Construction (p.no. 72- 73 of PB) d) Purchase invoices issued by M/s. Raja Construction to the assessee Company (p.no. 74-94 of PB) e) Bank Statements of the Assessee Company- evidencing the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h establish the genuineness of the concern. 23. Moreover, non-compliance of summons under section 131 by the suppliers cannot be the concern of the assessee. It is not the case of the revenue that assessee was asked to produce the supplier. As the supplier is separately assessed to tax the issue of the low balance is required to be addressed by it and it cannot be a reason for dis-allowance of the purchases from that party, as many times purchases are also made from bank borrowers. Further, the learned Commissioner (Appeals) confirmed the finding of the learned assessing officer without giving any reason but merely reiterating the findings of the assessing officer. Reliance in these regard can be placed upon the following judgments: a) C.I.T Orissa v. Orissa Corporation Pvt. Ltd., [1986] 159 ITR 78 (SC) b) CIT Vs. Nikunj Eximp Enterprises Pvt. Ltd. 372 ITR 619 (Bom.) c) DCIT Vs. Rohini Builders 256 ITR 360 (Guj). d) Phool Singh Vs. ACIT, ITA 22901/Del/2014, order dated 11.04.2017 In the light of the above-submissions, it is humbly prayed that assessment u/s 153A dated28.12.2018 for AY 2013-14 may kindly be quashed." 8. On the....