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2019 (6) TMI 1115 - ITAT MUMBAIRejection of books of accounts - trading addition - suppression of yield by the assessee - blank delivery challan books were found from the premises of the assessee which were susceptible to manipulation - different ink was used to fill the weight in the delivery challans - HELD THAT:- There in not even an iota of submission that raw material was not supplied to the assessee. The payments to all the suppliers were made by the assessee through banking channels. No discrepancies have been found in the ledger statements of these suppliers. Nothing has been brought on record to establish that any cash got exchanged between the assessee and these suppliers on account of alleged bogus supplies. The allegations that these suppliers were in collusion with the assessee is not supported by any material. No discrepancy has been pointed out by survey team in physical stock of raw material or finished goods on the date of survey. No evidence of suppressed sales, unaccounted cash / investments / sales have been brought on record. No defect has been pointed out either in cash or in stock during survey. The revenue is unable to point out that except for statements, any incriminating material was found during the course of survey proceedings. Pitied against the same was the fact that the assessee was a corporate entity and its books were duly audited as per law over the years. The auditors have not made any adverse comment on quantitative details being maintained by the assessee. So far as the rejection of books of accounts is concerned, we find that no specific discrepancy or defects have been pointed out by AO in the books of accounts. In fact, the addition has been made by Ld. AO merely by disturbing the figures of purchase of raw material without disturbing any other component of books of accounts. We find that the assessee’s books were subjected to Audit under Income Tax Act as well as under The Companies Act and the same could not be rejected in a light manner. This Tribunal rendered in ITO V/s M/s Eternity Jewels [2019 (2) TMI 1649 - ITAT MUMBAI] wherein it has been observed that AO could not reject the books merely on the basis of surmises and conjectures without pointing out any defect in the books of accounts. Also see TIME & SPACE HAULERS [2018 (7) TMI 1997 - BOMBAY HIGH COURT] as held that without pointing any particular defect in the audited accounts, it was not correct to reject the books u/s 145(3) - Thus the given factual matrix does not inspire us to sustain the stand of Ld. AO in rejecting the assessee’s books of accounts. Veracity of statement recorded u/s 133A - suppression of yield by the assessee - contradictory statement by employee of the assessee and MD of the assessee - AO followed the statement of employee adopted an arbitrary yield of 87% as against the yield of around 83% - HELD THAT:- It is settled law that statements recorded during survey proceedings would have no evidentiary value unless corroborated with circumstantial evidences or cogent material to substantiate the same. See S. KHADAR KHAN SONS [2007 (7) TMI 182 - MADRAS HIGH COURT] We find that the assessee was reflecting yield in the range of 80% to 81% from AYs 2004-05 to 2011-12. Thereafter, the yield has shown improvement which stood explained by the fact that there were additions in the Plant & Machinery from 01/04/2010 onwards which further corroborates assessee’s stand. CIT(A) was justified in deleting the quantum additions as made by Ld. AO on account of alleged suppression of yield. By confirming the same, we dismiss the appeal. - Decided in favour of assessee.
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