TaxTMI 
TaxTMI 
2025 (7) TMI 1488
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....us additions as made by Ld. AO in the assessment order. 2. The Ld. CIT-DR advanced arguments supporting the assessment of Ld. AO and placed on record order of Pr. Commissioner of Customs (import) dated 06-02-2024 in the case of the assessee group. The Ld. AR opposed any interference in the impugned order. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. The assessee being resident partnership firm is stated to be engaged in manufacturing / export of readymade garments. 3. Assessment Proceedings 3.1 The assessee filed regular return of income at Rs. 0.34 Lacs. However, the case was reopened pursuant to search action by Directorate of Revenue Intelligence (DRI), Ludhiana in the case of assessee group in 18-03-2005. Shri Aman Kirpal and Smt. Leela Kirpal were partners in assessee-firm. On the basis of show-cause notices as issued by DRI, various allegations of bogus transactions were made against assessee-group. 3.2 The Ld. AO concluded that no manufacturing activity was being carried out by the assessee and his sister concerns. The assessee arranged for and obtained bogus purchases bills from various firms but purchased ....
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.... non-deduction of TDS on labor job work charges. Even if TDS was not required to be deducted on these payments, the expenditure was to be disallowed since the assessee could not substantiate the same with documentary evidences. On the business receipts, business income was estimated at 5%. The misc. income of Rs. 153.91 Lacs was actual receipt and was to be taxed as such. The Ld. AO proposed disallowance of Rs. 0.20 Lacs u/s 36(1)(va). TDS on job work payment of Rs. 2.24 Lacs was paid laid and accordingly, the amount of Rs. 2.24 Lacs was also disallowed u/s 40(a)(ia). The total income was thus proposed to be computed at Rs. 432.41 Lacs. Finally, the income was assessed at higher figure of Rs. 563.91 Lacs which was subjected to first appeal by the assessee. 3.5 In AY 2006-07, similar assessment was framed u/s 143(3) on 30- 12-2008. The Ld. AO added peak credit of foreign remittances for Rs. 32.96 Lacs u/s 68 along with estimated unaccounted expenditure of 6% of total foreign remittances of Rs. 32.96 Lacs. The assessee reflected misc. Income of Rs. 15.58 Lacs which primarily in the nature of DEPB, Duty drawback and CENVAT credit which was considered as other income. The trading re....
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....end by completing the adjudicating proceedings to raise the demand against the assessee despite the directions of jurisdictional High Court to expedite the proceedings. The assessee also relied on copy of Panchnama drawn on 29-09-2004 when the customs department inspected the assessee's factory evidencing manufacturing as done by the assessee. The independent evidence as collected by the customs department could not be brushed aside as irrelevant. The Ld. AO proceeded to complete the assessment without carryingout any independent investigation to bring on record any evidence to confirm the allegations as contained in the show-cause notice as issued by DRI. The addition was made u/s 68 without verifying the source of the remittance or without giving opportunity to the assessee to do so. The 90% of export proceeds were received through letter of credits which were opened before the goods were exported and backed by bankers of both the exporter as well as the purchaser. The allegations of DRI were yet to be established. The creditworthiness of the person making the payment, in case of L/C, was very clear from the banking transactions itself since only on the basis of parties' credenti....
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.... separate disallowance of Rs. 239.76 Lacs. Further, no separate addition of export incentives would be required. However, the other income which as in the nature of rental income and interest income was not related to normal trading income of the assessee and therefore, the addition to the extent of Rs. 5.63 Lacs was upheld. The disallowance u/s 36(1)(va) was deleted since the payments were made before due date of filing of return of income. The addition of Rs. 2.24 Lacs u/s 40(a)(ia) was sustained. The deduction claimed by the assessee u/s 80-IB would not be allowable on export incentives as per the decision in Liberty India (317 ITR 218). Since the estimated income was less than export incentives, there was no eligible profit on which deduction u/s 80-IB could be claimed. Therefore, no such deduction would be available to the assessee. Aggrieved as aforesaid, the assessee as well as revenue is in further appeal before us. 6. In AY 2006-07, the Ld. CIT(A) deleted the addition made u/s 68 as well as estimated expenditure u/s 69C on the ground that the search was carried out on assessee on 18-03-2005. In this year, no evidence was brought on record by Ld. AO to substantiate the a....
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....ee, whose statement was recorded by the Department of Central Excise, had not been examined by the Assessing Officer. Further, the assessee was not given an opportunity to cross-examine them. Therefore, both the authorities were correct in deleting the additions made by the Assessing Officer. The findings given by the authorities were based on valid materials and evidence and it was a question of facts and not perverse. Further, the revenue had not produced any material evidence to take a view contrary to that of the Tribunal. Hence, there was no error or illegality in the order of the Tribunal warranting interference. The order of the Tribunal was in accordance with law and the same was to be confirmed. 9. During the course of hearing, the revenue, at the outset, has placed on record the copy of order dated 06-02-2024 as passed by Ld. Principal Commissioner of Customs (Import) in respect of 51 noticees including the assessee. A detailed findings have been rendered in this order and the order in respect of assessee entity is contained in para 17.1 of the order which inter-alia include disallowance of DEPB amounts / DEPB scripts purchased and utilized by the importer, imposition ....