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2015 (7) TMI 290 - AT - Income TaxBogus expenditure - commodity transactions in grey market - CIT(A) deleted the addition - Held that:- CIT(A) has rightly observed that the assessee had declared a sum of ₹ 5 crores for the year under consideration. The said disclosure was on account of various discrepancies/deficiencies that may be noted in relation to claim of additions to the fixed assets in the case of M/s. Nitin Cylinders Ltd. and also to take care of other issues. So far the contention of the department that the assessee had stated the same as unaccounted income in relation to commodity transactions in grey market is concerned, it may be observed that neither any evidence in this regard was found during the course of search action nor in the investigations during assessment proceedings. The AO had made no enquiries in this respect. He has just relied upon the statement of the assessee made during search action, that in these type of transactions, no evidence generally is available. When there was no evidence found or detected nor there is any contention of the revenue that any evidence in this respect has been concealed by the assessee, then under such circumstances, it has not been explained by the Department as to what prompted the assessee to make such a declaration in respect of income from commodity transactions. It has also not been explained as to even why the AO had not made any enquiries in this respect during the assessment proceedings. The facts on the file clearly reveal that the declaration was made by the assessee in relation to discrepancies found during the search action in the case of Nitin Cylinders Ltd. The naming the disclosure as from commodity trading in the grey market was made as was then advised to the assessee. It is evident on the file that disclosure of ₹ 5.36 crores as per the return of income was to cover ₹ 3.51 crores capitalized in M/s Nitin Cylinders considered as bogus purchase and further the sum of ₹ 1.82 Crores for covering various issues as explained by the assessee in his letter dated 22.12.2009. The assessee has also claimed that the disclosure be also considered for difference in purchase of steel in M/s Nitin Cylinders Ltd. The Ld. CIT(A) though has held that the sum totally accounted for was at ₹ 4,97,00,000/-, however he has not allowed the claim of the remaining amount towards difference in purchase of steel. He has confirmed the addition of ₹ 2,66,03,042/- in relation to difference in purchase of steel as unaccounted income of the assessee. The assessee has however, not preferred any appeal in this respect. We therefore do not find any infirmity in the order of the Ld. CIT(A) in deleting the further additions made by the AO on account of bogus purchases capitalized in the account of Nitin Cylinders as the same have already been covered in the income declared of ₹ 5 crore by the assessee for the year under consideration - Decided against revenue.
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