2025 (8) TMI 50

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.... Act, 1961 (the Act). 2.1. The facts in brief are that the assessee filed the return of income on 02.12.2021. Thereafter, search u/s 132 of the Act was conducted on 29.01.2021 in the case of Balaji Group, during which various incriminating material were seized. Notice u/s 153A of the Act was issued on 09.10.2021, which was complied with by the assessee by filing the return of income declaring the same income as was declared in the return filed u/s 139(1) of the Act. The ld. AO issued questionnaire along with notice u/s 43A of the Act besides, issuing notice u/s 143(2) of the Act. During the course of assessment proceedings, the ld. AO on the basis of incriminating material and perusal of the submission of the assessee observed that the ass....

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.... to Rs.100,78,804/- and interest of Rs.10,15,049/- was paid thereon. We note that in the case of Everlight Vincom Private Limited from whom loan of Rs.75,00,000/-, interest of Rs.2,14,773/- was paid after TDS at source though the said party was not found on the address given by the party. Whereas in respect of the other two lenders, the AO has not made any addition as replies were received in response to notice u/s 133(6) of the Act. We note that the loan was also repaid at later date. In our opinion, the provisions of Section 68 of the Act cannot be applied where the repayment of loan has been made even in the subsequent year. The case of the assessee also finds support from the decision of Hon'ble jurisdictional High Court in the case of ....

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....so rightly deleted by the ld. CIT (A).So far as the interest amount of Rs.7,26,448/- paid to Rasili Barter Private Limited is concerned, we note that the ld. CIT (A) has recorded the finding that in A.Y. 2015-16, the assessee has taken the said loan from Rasili Barter Private Limited and AO has not made any reverse finding and no addition as made. Accordingly, we do not find any infirmity in the order of the ld. CIT (A). The ground no.2 is dismissed by upholding the order of the ld. CIT (A) on this issue. 4. The issue raised in ground no.3 and 4 are in support to ground no.1 and 2 and therefore, dismissed. 5. The issue raised in ground no. 5 is against the order of the ld. CIT (A) restricting the disallowance of 5% on account of bogus pur....

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....pect of VAT and other additional expenses and therefore,the assessee earns more than the normal profits. In the present case the assessee has duly furnished bills and vouchers and the material was consumed in the manufacturing process. However, since the assessee has failed to offer any cogent and convincing reply about the goods being received by the assessee with necessary evidences, we deem it fit to make a reasonable disallowance of 5% on account of profit element. Accordingly, the order of Ld. CIT(A) is modified and the AO is directed to sustain the addition to the extent of 5% of the bogus purchases. 6. In the result, the appeal filed by the assessee is partly allowed. If the entire purchases were wholly bogus and there was a findin....