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2014 (11) TMI 138 - AT - Income TaxIncome from undisclosed sources – Genuineness of expenses incurred for purchases – Held that:- The notice for re-opening dated 29/03/2007 was served upon the assessee - the finding of the CIT(A) that the assessee was not given proper opportunity to rebut the reasons recorded for reopening the assessment is justified - the AO has made addition on the basis of the information received from the Central Excise Department in respect of the supplier of the assessee; namely M/s.Ashok Synthetics as per the reference received from the Central Excise Department, it is stated that the Proprietor of M/s.Ashok Synthetics had died in 1999 - plant & machinery belonging to M/s. Ashok Synthetics was being used in one form or another from the same premises - AO has not recorded in the assessment order as to how the Power of Attorney given by Smt. Veena Tuteja and claiming as Proprietor of Ashok Synthetics is not correct without examining her and how the statement of Shri Satishkumar Tuteja in the form of letter duly notarised is not correct - the plant & machinery are belonging to M/s.Ashok Synthetics was in use - The AO has not given any finding in respect of the nature of activity carried out by the assessee by such plant & machinery - the AO has failed to give a finding on material aspect and ignored the fact that right from the year 1999 the plant & machineries belonging to M/s.Ashok Synthetics was in use. The purchases made by the assessees from the relevant four parties, quantity-wise as well as value-wise have been found to have been recorded in the books of account, the payment for such purchases has been found to have been made by crossed cheques and duly recorded in the books of account, the sales corresponding to such purchase have been found recorded in the books of account and it is so because Revenue has not doubted the genuineness of the sales, rather has accepted the same, there is no allegation of suppression of value of closing stock or of the sales quantity-wise or value-wise and there is no allegation of inflation of purchases also - there could not be any addition on any account - even the addition sustained by the CIT(A) on the basis of peak of purchases is not sustainable – Decided against revenue.
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