TaxTMI 
TaxTMI 
2024 (5) TMI 1610
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....he parties have agreed that all the issues involved in the above group appeals are the subject matter in the AY 2018-19 which is under challenge by the Assessee in ITA No. 981/Del/2022 and the Revenues Appeal in ITA No. 930/Del/2022, therefore, the Appeals for the AY 2018-19 same has been taken as lead matter and the respective parties have made submission on all the captioned Appeals. For the sake of convenience the Grounds of Appeal the Assessee in ITA No. 981/Del/2022 for AY 2018-19 and the Grounds of Appeal of the Revenue in ITA No. 930/Del/2022 in the case of Parmanand & Sons Food Products Pvt. Ltd. for AY 2018-19 are considered which reads as under:- "1. That the Ld. CIT(A) grossly erred in law and in facts of the case in holding the purchases of the assessee company to be non-genuine only due to alleged non-compliance of summons by suppliers. 2. That the Ld. CIT(A) grossly erred in law and in facts of the case in not accepting genuineness of purchases from alleged bogus supplier despite the fact that the said suppliers had duly complied to the summons issued and the acknowledgement of the same was furnished before the Ld. CIT(A) during the course of appella....
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....make further payment to agriculturists ignoring the fact, that, Ahartiyas in general are also involved in making advance payments/financing to agriculturists. 4 The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by holding that there is no opening and closing stock in the books of Ahartiyas, which is in complete variance to the prevalent market practice in many markets where Ahartiyas hold the stock with themselves till the completion of cleaning, weighing and transportation activities. 5. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee by differentiating between genuine and bogus purchases merely on the basis of submission of financials and bank statements by the suppliers. 6 The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee ignoring the fact, that, neither the assessee nor the suppliers were able to produce any stock register of the goods purported to have been traded. 7. The Ld. CIT(A) has erred on facts and in law in allowing the appeal of the assessee ignoring the fact, that, there were major suppliers, who remained non-compliant to the not....
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...., where 25% margins are common-place. 13. The Ld. CIT (A) has erred on facts and in law in not appreciating, that, the facts in the instant case are similar to the facts in the cases of PIT vs. Synbiotics Ltd. (R/Tax Appeal Nos. 1209to 1213 of 2018) Gujarat and Vijay Proteins Ltd. vs. Commissioner of Income Tax (1. T. Ref No 139 Of 1996, Tax Appeal No. 243 of 2002, Dec 9, 2014) Gujarat. 14. The Ld. CIT(A) has erred on facts and in law in applying the GP rate of earlier Assessment Years, thereby effectively ignoring the findings and evidences gathered during the search in the case of the assessee and during the surveys conducted on the various suppliers. 15. The Ld. CIT(A) has erred on facts and in law in deleting the addition of Rs.37,00,000 by considering that the amount on account of unexplained money u/s 68 of the Act without appreciating the fact that the AO has clearly delineated the modus operandi of the assessee, wherein huge amounts of cash were routed back into their coffers by inflating its purchases. 16. The Ld. CIT(A) has erred on facts and in law in presuming the cost of Chani Kant Refraction at Rs. 2,000 per quintal, when no such ag....
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....de from the parties other than those mentioned in the books of account. That being the position, the Assessing Officer held that on the basis of principles laid down by the judicial authorities from time to time, entire purchase price cannot be disallowed but only the profit element embedded in such purchases to be added to the income of the assessee. Holding thus, the Assessing Officer held that the next question is, that what should be the fair profit rate out of the purported bogus purchases which should be added back to the income of the assessee. Based on the show cause notice and considering the material pertaining to transport company or agent along with bill and invoices of suppliers which were blank, statements of the two of the accountants who have explicitly given statement on oath that they don't maintain stock register, based on the discrepancies in the inventory furnished by assessee and the audit reports, based on the other prominent companies engaged into the similar business as that of Assessee Company who have earned the gross profits between 10 to 12 percent, the Assessing Officer concluded that 25% of the total purchases were treated as bogus purchases. Accordin....
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....tiyas accounts are also not audited on the basis of his turn over rather on the basis of commission he earns. iii. Ahratiyas only issue the bills for the agreed quantity and rate. iv. Ahratiyas are not responsible for transporting the goods to the premises of the buyer. Actually, goods are directly delivered by the agriculturists at the premises of the buyer, mostly through his on vehicles. Therefore, there is a good chance that bills issued by Ahartiya may not be accompanied with transport bills. 5.3 The above practice has also been recognised by the CBDT while issuing Circular though it was in regard to Audit of Accounts. The relevant part of the Circular No. 452 dt. 17/05/1986 are as under: "Sec. 44AB IT Act, 1961-Applicability in the cases of commission agents, arahtias, etc. -Clarification regarding AUDIT OF ACCOUNTS S 44AB Sec: 44AB of the IT Act, 1961, as inserted by the Finance Act, 1984, casts an obligation on very person carrying on business to get his accounts audited, if his total sales, turnover or gross receipts, as the case may be, exceed Rs. 40 lakhs in any previous year relevant to the assessme....
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.... of such parties whose transactions were considered as suspicious. They were required to appear before the AO along with the sales documents, purchase documents, bank account statements, bill copy and other transportation documents. Various parties appeared before the AO in response to the summons and submitted the following documents: i. Copy of audited financial statement and TAR showing secured loans from scheduled commercial banks. ii. Copy of acknowledgement of ROI showing GTI. iii. Copy of bank Statement showing receipt of payment from Assessee Company. iv. Copy of Account of assessee company in the books of accounts." 6. In view of the modus operandi, the ld. CIT(A) was of the considered opinion that wherever Ahartiyas/Billing agents have provided the above documents, there transaction with the assessee is held as genuine transaction. Only in those cases where Billing agents/Ahartiyas have either not provided the above documents or not responded at all, purchases from them are considered as bogus purchases. The ld. CIT(A) held that no fault was found in the documents, therefore the Ld. CIT(A) was of the opinion nothing more can be produced by an....
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....unal confirmed the profit @3% on bogus purchases. In the case of ACIT- 22(3), Mumbai vs Vipul Diamond and (Vice-versa), ITA No 2793/Mum/2018, G.O.N0.121/Mum/2019 the Tribunal confirmed the profit @ 3% on bogus purchases. In the context of this case, the observations of the Co-ordinate Bench of ITAT Delhi in the case of Manoj Sharma Versus ITO, Ward-39 (5), New Delhi ITA No.:4342/Del/2018. (Dated:- 28 January 2019) has observed as under :- " 10. Once the quantity of opening stock and purchases on the debit side; and sales and closing stock in the credit side in the books of account has been accepted, then to hold that the some quantity of purchases recorded in the books are unexplained or outside books of account, is very difficult proposition to accept. Because, the quantitative details of stock, purchases, sales have not been discarded or any defect has been found, then purchases as debited in the books of accounts cannot be added u/s 69C. Here in this case, even balancing figure of the gross profit shown by the assessee has not disturbed. Even if it is to be accepted that the purchases made from the three parties were in the nature of accommodation entries, then it has t....
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....he result on merits addition made by the AO is deleted and consequently assessee 's appeal is allowed." 9. The ld. CIT(A) has also relied on the order of the ITAT Delhi in the case of Assistant Commissioner of Income Tax Circle-22 (l) New Delhi Versus M/S. Sanvik Engineers India Pvt. Ltd, ITA No.3201/Del/2015. (Dated:- 30 May 2019) wherein ITAT has observed as under :- " 15. However, it has been held in various decisions that even if the purchases are held as bogus, the entire purchase amount cannot be added when the department has not disputed the assessee's sales and the Assessing officer has not rejected the books of accounts and has not granted opportunities of cross examination. In such case only gross profit element embedded in such bogus purchases can be added. for the above proposition, we find support from decision of Hon'ble Bombay High Court in the case of PCIT Vs. Mohd. Hazi Adam vide ITA No. 1004/M/2016 and other connected appeals vide consolidated order dated 21.02.2019... 16. Since in the instant case the Assessing Officer has not disturbed the sales and has not rejected the books of accounts, therefore, the entire amount of bogus pur....
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.... 246160667 11. Thus, the critical point was while the AO himself considered 25% of the total purchases as bogus, the ld. CIT(A) determined profit @ 5.67% on the unsubstantiated purchases. 12. Aggrieved, both the assessee and the revenue are in appeal before us. The Revenue is in appeal against deletion of the addition made by the Assessing Officer on account of 25% of the total purchases and the assessee is in appeal against the confirmation of profit @ 5.67% on the unsubstantiated purchases of Rs.24.61 Cr. 13. Before us, the ld. DR supported the Assessment Order and the ld. AR while supporting the order of the ld. CIT(A) argued that the bogus purchases have been wrongly computed by the ld. CIT(A). 14. The bogus purchases determined by the ld. CIT(A) are as under: Sl. No. as per para 5 of Assessment order Name of seller party PAN Purchase Amount in Rs. Reply by the seller party 15 Sunil Kumar Sanjay Kumar & Co. AKSPB3461E 64722744 No reply 29 Matadin Sumit Kumar AWNPM4068 11429661 No reply 32 Rupal Traders RAAAPT4567B 138301128 No reply 39 Poonam Dal & B....
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....be seen at page- 3374-3375 forming part of paper book, vol-2. 2018-19 40 ETG Agro Pvt. Ltd. AACCE6163B 2014-15 It can be seen that Invoices and Dharam Kanta receipts substantiating purchases were found and seized which is also forming part of record at Pg. 249-250, paper book, vol-1. 2017-18 2018-19 44 Hare Krishna Traders AGPPG9273A 2017-18 The supplier was found to be existing at address in field enquiries a fact admitted by the assessing officer in terms of page 59 of the assessment order. 2018-19 45 Lord Krishna Trading Co. AFCPA7958L 2017-18 It can be seen that Invoices and Dharam Kanta receipts substantiating purchases were found and seized which is also forming part of record at Pg. 278-315, paper book, vol-1. 2018-19 2017-18 52 Rajat & Company Commodities Pvt. Ltd. AAFCR2108E 2016-17 The supplier had furnished its reply in response to the summon dated 08/12/2019 issued by the AO but it was not considered by AO. The reply can be seen at page- 33763378 forming part of paper book, vol-2. The supplier was also found to be existing at address in field enquiries a fact admitted b....
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....d as bogus and following the rationale given by the ld. CIT(A), and in the presence of evidences for sale of such goods, the method determined by the ld. CIT(A) has to be applied to these parties. Hence, the following additions are sustained: Sl. No. Name A.Y. Amount G.P. (%) G.P (Amount) 1. Singhal Food Products 2017-18 3622500 4.6% 1,66,635 2. Rohit Trading Co. 2016-17 446431 4.4% 19,642 19. Further, reliance is being placed on following Judgments:- (i) In the case of CIT Vs. Vijay M. Mistry construction Ltd. 355 ITR 498 (Guj.) the Hon'ble Gujarat High Court has held as under: "Held, dismissing the appeal, that the conclusion arrived at by the Tribunal was based on concurrent findings of fact recorded by the Commissioner (Appeals) as well as the Tribunal. It was not the case of the Revenue that the Tribunal had taken into account any irrelevant material or that any relevant material had not been taken into consideration. In the absence of any material to the contrary being pointed out on behalf of the Revenue, the order of the Tribunal could not be found fault with." (ii) Further in the case of CIT Vs. ....
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....sue is whether the purchase price paid by the assessee is reflected as receipts by the recipients. The assessee has, by set of evidence available on record, made it possible for the recipients not being traceable for the purpose of inquiry as to whether the payments made by the assessee have been actually received by the apparent sellers. Hence, the estimate made by the two appellate authorities does not warrant interference. Even otherwise, whether the estimate should be at a particular sum or at a different sum, can never be an issue of law. In the aforesaid set of facts and circumstances of the case, the impugned order of the Tribunal is an order which is made in accordance with law and does not require any interference. The questions referred at the instance of the assessee as well as the Revenue are, therefore, answered in the affirmative, i.e., in favour of the Revenue and against the assessee in relation to the questions at the instance of the assessee, and in favour of the assessee and against the Revenue in relation to the questions at the instance of the Revenue." (iv) In the case of Vijay Trading Co. vs. ITO reported in (2016) 388 ITR 377 (Guj), the Hon'ble G....
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....the entire amount of purchase of Rs.61.40 lakhs. The Commissioner (Appeals) found that though the purchases were not made from the parties from whom the assessee claimed, there was complete quantitative tally of the materials purchased and sold. He was of the view that such materials were purchased from the open market incurring cash payment and bills were procured from various sources. He added only the profit element and not the entire amount of the purchases, for the limited addition to 30 percent of the total amount and reduced the amount to Rs.18.42 lakhs. The Tribunal allowed further relief to the assessee and retained the addition to the level of twelve and half per cent in pursuance of the various purchases. On appeal: Held, dismissing the appeal, that the assessee was a trader and the Tribunal having retained twelve and half per cent of the purchase towards its possible profit, there was no reason to interfere in the order of the Tribunal." (vii) In the case of CIT Vs. Simit P. Sheth the Gujarat High Court reported in (2013) 356 ITR 451 (Guj) wherein the Hon'ble Gujarat High Court has held as under: "The assessee was engaged in the business of trading ....
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.... incurred expenditure, for which there were no dispute. This being a finding of fact, we have to proceed on such a basis. The contention of ld. D.R. is that such logic cannot be applied. In our opinion, since the department has not disputed the Assessee's sales and also for that matter, the purchases (AO never doubted the purchases per se) and there was no discrepancy in the sales declared, the purchase cannot be rejected without disturbing the sales and only gross profit embedded with the bogus purchases to be considered. 21. Further, the Hon'ble Karnataka High Court in the case of Shri Ganesh Shipping Company Vs. ACIT in ITA No.366 of 2015 dated 6.2.2021 held as under: "5. We have considered the submissions made on both sides and have perused the record. From perusal of the order passed by the authorities, it is evident that the authorities have accepted the books of accounts produced by the assessee. The Assessing Officer, in its order, has admitted that the payment of speed money is a trade practice which is followed by the assessee and similar business concerns functioning for speedy completion of their work. However, the disallowance of 20% of the expenses is made....
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....ars as follows:- A.Yr Disallowance by AO Restricted to 10% 1 2006-07 Nil Nil 2 2007-08 Rs.1,74,38,149/- Rs.17,43,815/- 3 2008-09 Rs.35,52,611/- Rs.3,55,261/- 4 2009-10 Rs.40,40,000/- Rs.4,04,000/- 5 2010-11 Rs.33,27,170/- Rs.3,32,717/- 6 2011-12 Rs.50,71,250/- Rs.5,07,125/- 7. 2012-13 Rs.1,81,74,006/- Rs.4,54,350/- (Restricted to 2.5%) 8 2013-14 Rs.2,52,34,742/- Rs.6,30,869/- (Restricted to 2.5%) 6.1 The main reason for disallowance by AO was that payment Labour Charges supported by self-made vouchers and have no signature of recipients. These expenditures mainly pertain to iron ore loading and unloading transit/site marshalling charges and other casual labour charges. According to the assessee, these expenditures incurred at various stages of iron ore movements. These expenses are pertaining to wages paid to various parties, such as workers manually handling iron ore from lorries/railway vehicles to the exporter's yard, those engaged to counter pilferage of iron ore at railway yards, export yards and other casual labourers engaged for cleaning purposes. It wa....
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....ect this plea of the revenue authorities. In our opinion, considering the nature of the business of the assessee, we can take the judicial notice of the fact that if the AO had any doubt with regard to genuineness of any one of the voucher produced by the assessee, he could have drawn sample vouchers and called upon the assessee to produce the concerned recipient to establish the genuineness. Without doing so, making any adhoc disallowance is not legally sustainable. If the Ld. CIT(A) also without carrying on any enquiry, certain percentage of the labour payment at 10% in assessment years 2007-08 to 2011-12 and 2.5% in assessment years 2012-13 & 2013-14 was sustained. This act of Ld. CIT(A) is not justified. In our opinion, the impugned expenditure in fact claimed to have been incurred by the assessee wholly and exclusively for the purpose of its business and it cannot be said that this expenditure is bogus or fictitious and cannot be said that it has not been incurred by the assessee for the purpose of business. We do not see remotely there is any mention of rationale in arriving at the percentage of disallowance in the present case, and secondly, we find force in the claim of ass....
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.... on, the decision rendered by this Court in KONKAN MARINE AGENCIES, supra. It is pertinent to note that in CLIFFORD D'SOZA, supra, payment was made to the sub-contractors in cash as well as by Cheques. In the absence of any challenge to the entries made in the books of accounts by the authorities, in our opinion, the finding recorded by the Assessing Officer as well as the Tribunal that it denied the claim of the assessee for expenditure to the extent of 10% on account of payment of speed money, is perverse as the same is duly supported by the documentary evidence. Insofar as the submission made by the learned counsel for the revenue that in paragraph 4 of the order of the Commissioner the assessee himself had restricted the payment of speed money to 10% is concerned, it is pertinent to note that the restriction was made by the assessee in respect of Assessment Year 200405 and from the grounds of memorandum of appeal before the Tribunal, we find that the assessee had challenged the aforesaid finding which is evident from paragraphs 1 and 2, therefore, the aforesaid submission is of no assistance to the revenue. 6. In view of aforesaid preceding analysis, the substantia....
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....E of the I. T. Act, 1961 is applicable in the assessee's case. Accordingly, a sum of Rs.37,00,000/- is added to the total income of the assessee on count of unexplained money deposited during the demonetization period by the assessee relevant to the A. Y. 2018-19. " 27. The ld. D.R. relied on the above observation of the ld. AO. On the other hand, the A.R. has explained that the amount of Rs. 37,00,000/- credited to bank account No. 50200007144045 on 18/12/2017 operated and maintained by the assessee company with HDFC Bank was not a cash deposit. Rather the said amount was an internal transfer from bank account No. 50200014631352 operated and maintained by Assessee Company with HDFC Bank itself. That the account No. 50200014631352 was a current account and the account No.50200007144045 was an overdraft account and any surplus funds lying in Current Account are transferred to overdraft account to save interest cost. The same was done on 18/12/2017. 28. The assessee produced the copy of relevant bank account before ld. CIT(A) as follows: 29. The ld. A.R. submitted that from these statements it can be observed that, i). On 18.12.2017, amount of Rs. 37,00,000/- wa....
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.... assessee and in support of his claim he produced the copy of Cash Book. However, the claim of the assessee cannot be accepted as at the time of search, the assessee could not complete the cash book of this company up to the date of search. Therefore, this claim of the assessee can at best be considered as an afterthought as no explanation was given at the time of search and no substantiation was made during assessment proceedings. Further, the explanation of the assessee was not even substantiated properly during the assessment proceedings. Therefore, addition made by the AO of Rs.9,72,150/- was confirmed and this ground of appeal was dismissed by the ld. CIT(A). 34. We have heard the rival submission and perused the materials available on record. In this case, on this issue it is admitted fact that there was a cash book found during the course of search action which was not completed as on the date of search. The lying physical cash balance found during the course of search not tallied with the cash book on that date. Hence, it was presumed by the AO that this cash was found over and above the entries found in the cash book. However, on later occasion, the cash book was comple....
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.....100 per kg which comes to Rs.1,15,83,000/- (Rs.82,55,000 + Rs.33,28,000) for the relevant f.y. 2017-18 14.1 In response to show cause notice dated 28.12.2019 the assessee has not furnished any satisfactory reply with respect to these two items and no supporting documents is furnished. Accordingly, on the perusal of documents available on record, it is concluded that after providing proper opportunity of being heard assessee again failed to furnish any reply/satisfactory reply to substantiate its bogus material/items as discussed above, and has concealed the complete facts of the case for the relevant A. Y. 2018-19. Also, the identity, genuineness, creditworthiness is not established with respect to the bogus muterialie. Chani Kant Refraction and Matar Flour as claimed by the assessee in its Inventory for the relevant F.Y. 2017-18. Further, the assessee failed to discharge the onus which lies upon him. Hence, it is assumed that assessee has nothing to say on it. Considering all these facts and circumstances, assessee has concealed the true facts of its income for the relevant A: Y: 2018-19. 14.2 1n view of the above facts and circumstances of the case it is clear ....
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....ems i.e.Chani Kant Refraction and Matar Flour for 825.5 and 332.8 quintals respectively which has been estimated @ of Rs. 100 per kg which comes to Rs.1,15,83,000 (Rs.82,55,000 + Rs.33,28,000) for the relevant FY 2017-18." Since the Ld. AO never raised said questions during the assessment proceedings the addition made by him is not tenable and deserves to be deleted. However, to explain the purported differences highlighted by id. AO; the following is submitted: iv. As evident from the show cause notice issued (Pg. 478, PB) and the inventory reconciliation (Pg. 474, P B); the item Mutar Besan mentioned in Tax Audit report. was mentioned as Matar Flour in inventory records and the said fact was duly acknowledged by Ld. 10 in the show cause notice issued. However, since the acceptance of said fact was leading to minor addition of Rs. 14262/- being GP on unaccounted sales; the Ld. 10 changed his opinion and proceeded to opine that Mutar Besan and Matar Flour are different items and made addition on account of unexplained investment in Matar Flour which was otherwise duly explained and recorded in the books of account. v. That the tax audit report ha....
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....quintal while as pers Inventory records the quantity of Chilka Churi is 410.3 quintal. This means the stock as per Audit report is short by 824.7 quintal. However, there is another item appearing in the Inventory records and that is Chani Kant refraction. The quantity of Chani Kant refraction is 825.5 quintal which is very close to short stock of Chilka churi. But there is no evidence that Chani Kant refraction is same as Chilka Churi and both have the same valuation so that can be clubbed together. He has also checked the Audit reports of earlier years and found that no item in the name of Chani Kant refraction appear there. Therefore, stock of Chani Kant refraction is considered as excess stock not appearing in the audit report and thus not forming the part of closing stock. However, the valuation of Chani Kant refraction is taken as Rs.2000/-per quintal which is the then market price. AO has also not given any. reason/justification behind taking this price as Rs.10,000/- per quintal, This results into the addition of Rs.16,51,000/(825.5*2000) on account of undisclosed investment in the stock. 40. Accordingly addition of Rs.l,15,83,000/- is restricted to Rs.16,51,000/- as unex....
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....ile had details of amount recoverable from the customers of M/s Parmanand and Sons Food Products Private Limited and none the transactions mentioned on said images were executed by him in his personal capacity. The assessee had also furnished copies of ledger account of customers from the books of account of M/s Parmanand and Sons Food Products Private Limited. The assessee is one of the assessee of PAN Brand group and is duly engaged in family business. In this era of modernization and digitalization finding of business transactions from mobile of a person is natural and no adverse cognizance can be drawn on the basis of the same. One has to objectively look upon the nature of transactions. M/s Parmanand and Sons Food Products Private Limited was also being assessed in the jurisdiction of ld. AO himself and he has simultaneously passed assessment order in the case of M/s Parmanand and Sons Food Products Private Limited also. Thus, the ld. A.R. submitted that the ld AO cannot claim that he was unaware that the assessee was engaged in family business or was unaware about the transactions recorded in images found from his mobile. All the transactions recorded in the images found from....
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....in the case of M/s. Globus Agrofoods Private Limited, the Ground with regard to sustaining addition of Rs.49,21,568/- out of Rs.2,54,85,394/- and Rs.83,31,932/- out of Rs.13,67,70,799/- which has been made in the assessment years 2017-18 and 2018-19 respectively on the basis of loose sheets found during the search operation in the case of assessee. 50. Facts of the case are that sustaining addition of Rs.49,21,568/- out of Rs.2,54,85,394/- and Rs.83,31,932/- out of Rs.13,67,70,799/- has been made in the assessment years 2017-18 and 2018-19 respectively on the basis of loose sheets found during the such operation. Facts in both assessment years are same. We will consider the facts in assessment year 2017-18. 51. The ld. CIT(A) observed that the addition of Rs.2,54,85,394/- was made on the basis of entries on loose sheets found during search operation. To ascertain the veracity of what assessee is stating the reply filed by the assessee for each entry is examined by the ld. CIT(A) in the following table: 52. The decision "Contention of the assessee is found to be correct" has been arrived by ld. CIT(A) after duly verifying: i. Such entries recorded in Books of M/s. ....
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....on took place. Therefore, there is no adverse inference could be drawn on the basis of these unsupported loose slips. 56. Further, no corroborative evidence was brought on record to confirm that the entries in seized material were actually reflects the transactions in the form of cash payment between the assessee and others. In the seized material, there was no concrete proof regarding the payment of cash loan between these parties. Even otherwise, it does not suggest the amount of involved, either in the form of cheque and cash, date transaction and other details and also there was no circumstantial evidence to suggest all these things. The department is relying on only the unsubstantiated loose slips to suggest the transactions. In our opinion, the addition made by the ld. AO only on the basis of conjectures and surmises and presumption and money was transacted between the parties. The above conclusion drawn by the ld. AO is contrary to the elementary understanding of the contact between the parties. As per the trade practice, we cannot come to the conclusion that an assessee will transact such huge amount without a piece of paper to support the transaction. Hence, there was n....
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....ded over to the Assessing Officer of the person to whom the said document "belongs". In the present cases it has been urged on behalf of the petitioner that the first step itself has not been fulfilled. For this purpose it would be necessary to examine the provisions of presumptions as indicated above. Section132 (4A) (i) clearly stipulates that when inter alia any document is found in the possession or control of any person in the course of a search it may be presumed that such document belongs to such person. It is similarly provided in Section 292C (1) (i). In other words, whenever a document is found from a person who is being searched the normal presumption is that the said document belongs to that person. It is for the Assessing Officer to rebut that presumption and come to a conclusion or "satisfaction" that the document in fact belongs to somebody else. There must be some cogent material available with the Assessing Officer before he/she arrives at the satisfaction that the seized document does not belong to the searched person but to somebody else. Surmise and conjecture cannot take the place of "satisfaction'. * In the present case the search took place on 5t....
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....at paras 6 and 6.1 has held as under : "6. We have heard both the parties, gone through the orders of the authorities below. Shri Lanka Anil Kumar is an employee of M/s Navaratna Estates Ltd. A search u/s 132 was conducted in the residence of Shri Lanka Anil Kumar and certain sums were found in whatsapp messages in digits. When asked to explain, Shri Anil Kumar stated that the amounts were written in thousands represent lakhs and the total sum of Rs.1,05,00,000/-was taken as loan from the assessee in cash for his business purposes. When confronted with the assessee, he explained that the amounts mentioned in thousands are correct and the total amount would be in the range of Rs.5,000/- and Rs.10,000/- given to Shri Anil Kumar to meet the petty cash or miscellaneous expenses from M/s Navaratna Estates during registration of properties. A search u/s 132 was conducted in the case of Shri Lanka Anil Kumar as well as the assessee and the survey u/s 133A was conducted in the case of M/s Navaratna Estates. No evidence was found by the department either in the premises of the assessee or in the premises of M/s Navaratna Estates, having given loan to Sri Anil Kumar to the extent of....
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....nt to Mr.L. Anil Kumar whereas the appellant explained the same to be in thousands of rupees which were given for miscellaneous expenses. Mr.L. Anil Kumar also took similar stand in his assessment proceedings and said that the statement given during Search was under duress. The AO has not brought on record any evidences as to utility of such amount nor any other corroborative evidence to support the findings. Such evidences(Messages) without any supporting/corroborative along with admission of third person cannot be, basis for AO to come to conclusion and make addition in the assessment order. The low or the issue is laid down by the jurisdictional High Court, and followed by ITAT consistently in the following cases. * K. V. Lakshmi Savitri Devi Vs ACT 148 ITJ 517 (Hyd). * K. V. Lakshmi Savjtri Devi Vs ACIT ITTA 563 of 2017 (AP)(HC) * Jawahar Bhai Atmaram Hathiwala Vs ITO 128 ITJ 36 (Ahd) * DCIT Vs B. Vijaya Kumar ITA No.930 & 931 of 2009 (Hyd). * CIT Vs R. Nalini Devi ITTA 232 of 2013 (A. P) * CIT Vs P. V Kalyana Sundaran (2007) 294 ITR 49 * Venkata Rama Sai Developers Vs DCIT ITA 453/Vizag/2012. * P. Venkates....
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.... Partly Allowed for Statistical purposes 939/Del/2022 Dismissed -do- 2016-17 715/Del/2022 Partly Allowed for Statistical purposes 940/Del/2022 Dismissed -do- 2017-18 1854/Del/2022 -do- 2419/Del/2022 Dismissed -do- 2018-19 1855/Del/2022 -do- 2420/Del/2022 Dismissed 3. M/s. Kwality Techmech Private Ltd. 2016-17 711/Del/2022 Partly Allowed for Statistical purposes -- -- -do- 2017-18 712/Del/2022 -do- 937/Del/2022 Dismissed -do- 2018-19 713/Del/2022 -do- 938/Del/2022 Dismissed 4. Shri Devesh Mittal (Prop. M/s. Mittal Enterprise s 2014-15 -- -- 941/Del/2022 Dismissed -do- 2015-16 -- -- 942/Del/2022 Dismissed -do- 2016-17 716/Del/2022 Partly Allowed for Statistical purposes 943/Del/2022 Dismissed -do- 2017-18 717/Del/2022 -do- 944/Del/2022 Dismissed -do- 2018-19 -- -- 1332/Del/2022 Dismissed Order pronounced in the open court on 30th MAY, 2024. ============= Document 1 - DELIE ASHL-PAKBRANDSCO FA JOHAN ETKIL DERS Its atah Code Statement of account 97....
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....a Dat Channa Dat Rice Moong dal Noong dal Maita Soojl Moth Dal Math Dal mater Finished Goods Finished Gooch Cherna Det 21399 Channa Dal Betan 86/722.58 Chun Chứa 0 12224 ---- Matar forte Chùa Chull , PSI-Comparativo Stock As per D/S Position AS on 31.03.2018 As per Tak Audit Report Chùa Chull , 7 Document 5 Item Name Qty. as per Tax Audit report in quintal Qty. as per Inventory Record in quintal Difference Rate per quintal as on relevant date in Rs. GP Rate in 0% GP in Rs. Chilka Churi 1235.00 410.30 824.70 2000 567 93520 Moong 3695.00 3670.80 24.20 7293 567 10007 Matar Floor 402.00 332.80 69.20 3635 567 14262 Besan 2826.00 2666.20 159.80 4051 5.67 44859 TOTAL 162648 Rate per quintal as on relevant date in Rs. GP Rate in 0% Qty. as per Tax Audit report in quintal 402.00 Document 6 Annexure A-7 Page Amount Assessee Explanation Paper book Reference Decision Seized Material Explan ation 1. 41 4921568 Sh. Ritesh Mittal That of of Sh. Ritesh Mittal, one of the director assessce company was in the....
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....hat this page contains amounts receivable from several customers of M/s l'armanand and Sons Food Products Private Limited, a group concern and copies of ledger account of parties in the books of account of 53.6- assesswe are endosed. Itis evident that 553 these amounts are receivable against sales made aind these details have been written by somse employee for periodic recovery from customers. 26-45 27 2,541,030 50-64 26 4,702,763 65-78: Contention of the appeliant 79-103 is found to bo 104-137 Therefore 138-172 addition on IS account 173-190 is deleted! 191-229 29 4.117.989 30 415.61 31 927,452 32 S35,584 33 198,496 34 143,126 230-271 Sh. Ritesh Mittal, one of the director assessce company was in the business of trading of bardana and several hand written documents pertaining to said business of Sh. Ritesh Mittal was found and seized during the course of assessment proceedings. The said business of bardana was not disclosed by Sh. Ritesh Mittal in the return of income filed u/s 139 of the Act. However, the said business was duly declared by him in the return of income filed u/s 153A of the Act and the turnover said business was disdosed u/s MAD a....