TaxTMI 
TaxTMI 
2026 (1) TMI 194
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.... record. The Assessee had filed his return of income for the assessment year 2017-18 on 8-10-2017 declaring total income of Rs. 85,92,730/-. The Assessee had made purchases from its group concern M/s Salvation Group (Firm) amounting to Rs. 6,94,83,088/- which fact is also reflected in Form No. 3CD as purchase made from related concern. The Assessee was asked to provide the details and reasonability and genuineness of the said transaction. The Assessee filed a reply on 24-12- 2019 stating that the Salvation Group had a distributionship of North Delhi of mobile instruments named Micromax. During the year, Salvation Group had surrendered the distributionship as such and stopped dealing in this brand. However, as per the company's norms, whatever the stock that was lying at the time of surrender was to be transferred or given to the new distributor M/s Bhai Distribution at the rate at which the company sold the same to the Salvation Group. Since the purchase of the Assessee is at the supply rates of the parent company as such it did not contravene the provisions of Section 40A(2)(b) of the Act and no excessive or unreasonable payment was made by the Assessee to Salvation Group. The....
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.... perusal of the aforesaid details and documents furnished by the Assessee and on consideration of the remand report of the Learned AO, observed that Assessee had duly discharged his onus by proving the genuineness and reasonableness of the transaction. Further he observed that there was absolutely no excessive payment made by the Assessee to the related party. The Learned CITA noted that in the remand report, no adverse comments were made by the Learned AO in this regard. Accordingly, by duly appreciating the documentary evidences placed on record by the Assessee and by placing reliance on certain decisions of Tribunal and Hon'ble Delhi High Court, the Learned CITA deleted the disallowance made under Section 40A(2)(b) of the Act. 2.5. At the outset, we find that sufficient documentary evidences were indeed filed by the Assessee before the Learned CITA, which were duly remanded to the Learned AO for seeking his remand report. No adverse inferences were drawn on those documentary evidences by the Learned AO in his remand report. Further, we find that the Learned AO had not brought any comparable instances to justify the fact that the payment made by the Assessee to Salvation Group....
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....1-2016 and out of which, the Assessee had received Rs 55,75,524/- in cash from debtors, but the learned AO did not consider this cash realization. The Assessee had also given the detailed chart showing actual cash in hand as on 8-11-2016 and cash balance from August 2016 to 8- 11-2016. The Assessee further furnished the copy of other bank statements other than the bank account in which cash was deposited to justify that there was no cash deposited in other bank accounts during the period of demonetization. The Learned CITA duly examined the cash book and the debtors account and found that Assessee had indeed realized a sum of Rs. 46,68,950/- on account of cash sales as well as receipts from debtors. Since, the Assessee is engaged in the business of distribution of mobile phones, where the business could be carried out only in cash predominantly. Hence to the extent of the cash realization from sales in the sum of Rs. 46,68,950/-, the Learned CITA observed that Assessee had indeed proved the source of cash deposits and the said sum should be treated as explained. However with regard to the remaining sum of Rs 5,80,580/-. the Learned CITA granted partial relief to the Assessee's clai....
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..... 11, Block H, Ashok Vihar, Phase 1, Delhi -110052 for Rs 53,25,000/-. The said property was purchased by the Assessee on 4-3-2014 for Rs 47,01,208/-. The Assessee claimed deduction on account of cost of acquisition and also cost of improvement of Rs 8,41,666/- in the return of income and disclosed capital loss of Rs 2,17,875/-. The Learned AO in the assessment proceedings sought for the source of incurrence of cost of improvement of Rs 8,41,666/- from the Assessee together with the genuineness thereon. The Assessee stated that he had obtained unsecured loans from the family members for meeting the cost of improvement of Rs 8.41 lakhs and also filed furnished confirmation from the family members before the Learned AO. The Assessee also furnished the copy of bank statements duly highlighting the payments made on account of cost of improvement along with the bills of purchases towards cost of improvement before the Learned AO. The Learned AO on perusal of the said bills and vouchers observed that the bills are related to bricks / dust / rodi etc. and the bills were related with single party Shri Rajiv Gupta; no delivery address was mentioned in the bill and no transportation detail w....