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2013 (9) TMI 599 - AT - Income TaxAddition on account of unaccounted profit earned from the undisclosed purchases and sales – Assessment u/s 153A - Held that:- Reliance has been placed upon the assessee’s own case for the A/Ys 2001-02 to 2004-05 – On account of undisclosed purchases, Commissioner(A) has held that evidence found at the premises of Mr. Prem Kumar Arora cannot be taken as any basis to hold that the assessee made unaccounted purchases - Seized paper does not contain any name of the appellant - Neither in the statement, Mr. Prem Kumar Arora has alleged that such transactions pertained to the appellant - It is well settled position of law that document found from the third person cannot be applied against the appellant and the burden lays upon the Department to show that same reflects transactions of the appellant company. Reliance is placed on the judgment in the case of Sukhdayal Rambilas v. CIT reported in [1982 (1) TMI 49 - BOMBAY High Court] wherein it has been held that what is apparent is not real, the burden to establish this is on the person who alleges this - Since the issue in the assessment years 2005-06, 2006-07 and 2007-08 is identical to that of the earlier assessment years, respectfully following the decision of the Income-tax Appellate Tribunal, additions made by the Assessing Officer are deleted. Addition on the ground of undisclosed speculation business income – Held that:- During the course of search, no evidence was found to the effect that the assessee-company was engaged in speculative trading in agricultural commodities - On birthday of Mahashaya Dharam Pal Gulati, gold chains are distributed to the dealers, who achieve certain targets. For this purpose the assessee had purchased gold and alloy and got them converted from the jeweller, namely, Vijay Kumar Jewellers. The assessee had regular account with him for manufacturing of gold chains - The expenditure incurred by way of making charges as well as purchase of gold is reflected in the books of account – This transaction can not be treated as speculation transaction - The assessee is not engaged in purchase and sale of gold on the basis of which it could be presumed that the asses- see was engaged in speculative business – No evidence was brought on record – Decided in favor of Assessee. Disallowance of 20% of advertisement expenses - The Assessing Officer disallowed the expenditure on the ground that an attempt has been made by the company to promote Shri Dharam Pal Gulati and not the product – Held that:- Had the assessee engaged a big celebrity for promotion of its products, the assessee would have incurred huge expenditure and that would have been allowed in full by the Assessing Officer. The expenditure has been incurred on promotion of the product - Merely because Mr. Dharam Pal Gulati name comes to prominence, it cannot be said that the expenditure was not incurred for the purpose of business – Decided in favor of Assessee. Addition because of inflation of purchase price of raw-materials – Held that:- No such evidence during the course of search was found from the possession of the assessee indicating that actual beneficiary of over invoicing was the assessee - Since the addition has been made in the hands of Shri Sushil Kumar, no disallowance to that extent could be made in the hands of the assessee – No addition need to be made – Decided in favor of Assessee. Addition on account of arm’s length price – Addition made at average rate in the absence of comparables in the public domain – Held that:- Arm's length price cannot be determined without proper comparables - Nearly similar types of spices, condiments and their mixtures are sold by other brands like, Everest Masala, Ramdeo Masala, Ashok Masala and other manufacturers, therefore, there is no absence of comparables - In 2012, public domain comparables should be abundantly available - Set aside the transfer pricing adjustments to the file of the Assessing Officer to undertake the same afresh in accordance with law – Decided in favor of Assessee for statistical purpose.
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