9911796707
TMI Blog2012 (8) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... s it is proved that the said amount reached either the firm or the said partner and thereby erred in confirming the addition holding that the AO made lot of efforts without appreciating the fact that the AO has not brought on record any evidence to hold that the assessee ever received the amount." 3. Briefly stated facts of the case are that the assessee is the Managing Partner of a firm named, SPM Telecom, which has purchased plant and machinery worth Rs.1,38,73,660 in the assessment year 2001- 02 from one M/s. Ascent Plant & Machinery (P) Ltd. During the assessment proceedings for the assessment year 2004-05, the assessing officer noticed that SPM Telecom paid the above sums including an amount of Rs.25 lakhs, vide Cheque No.807417 dated 29.1.2004 and 807418 dated 30.1.2004 for Rs.8.5 lakhs each and No.807419 dated 3rd February, 2004 for Rs.8 lakh, totaling in all to Rs.25 lakhs. These three cheques were not encashed by the supplier company, i.e. Ascent Plant and Machinery P. Ltd.. But they were discounted by two entities, namely, M/s. Dhanalaxmi Corporation, Hyderabad and M/s. Ganesh Trading Co. Hyderabad. Assessing officer inferred that the cash after discounting the cheques w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may be mentioned that "& Co." cheques can be discounted whereas account payees cheques cannot. c. When other cheques given to the same supplier were in favour of M/s. Ascent Plant and Machinery Pvt. Ltd" these three cheques were in favour of "M/s Ascent Plant and Machinery" d. Even after noticing the loss of Rs.25 lakhs, the Manging Partner has not taken any concrete steps for recovery of these amounts. If the chques were given by mistake and encashed, then the common sense demands that the assessee should have taken every step to recover the amount. The Managing Partner who is the appellant, did not satisfactorily answer the above questions nor have forwarded any explanation with regard to the aforesaid queries. The Assessing Officer on the basis of the enquiry and material on record drew inferences from circumstantial evidence and concluded that the amount has been siphoned out with the connivance and active involvement of the appellant, who is both the partner and cheque signing authority and since the ultimate beneficiary would be the Managing Partner, who is managing the affairs of the firm, the A.O. made an addition of Rs.25 lakhs as "income from other sources"." Similar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to create confusion to siphon off the money as he could not produce any evidence either from M/s. Ascent Plant and Machinery Pvt. Ltd, or the two trading firms that the payment of Rs.25 lakhs was made against the purchase of plant and machinery. e) The appellant did not submit any evidence to support that a possibility may arise when a third party could involve in the entire transaction and that third party would have the right to encash the cheques and to show such a payment was incidental to the purchase of machinery. f) The whereabouts of the two firms, who encashed the cheqeus were untraceable. g) If the beneficiary is not the supplier who delivered the plant and machinery then obviously, it would be the appellant himself who circulated money through the two trading houses who are untraceable. h) The bank accounts pertaining to the two trading firms were operative for a short period. In case of M/s. Ganesh Trading Co., the account was opened on 10.1.2004 and closed on 7.6.2004 and in the case of M/s. Dhanalaxmi Corporation, the account was opened on 11.11.2003 and closed on 8.6.2004. It is clearly evident that these bank accounts are opened and operated for a short period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atsoever to siphon off the cash for the assessee. Otherwise, the learned counsel, relied on the submissions made before the lower authorities. 8. On the other hand, the Learned Departmental Representative for the Revenue forcefully argued by stating that these three cheques were differently treated and the assessee has no plausible explanation for this differential treatment. Learned Departmental Representative relied on the reasons narrated by the assessing officer, which are extracted in para-3 above. The fact that the assessee failed to submit the evidence narrated in para 6.2 of the impugned order of the CIT(A), was also highlighted. The Learned Departmental Representative ultimately, mentioned that the matter may be sent back to the file of the assessing officer, with a direction to obtain relevant confirmation from M/s. Ascent Plant and Machinery Ltd., the supplier of the plant and machinery about not only the supply of the plant and machinery, but also the receipt of the agreed amount of consideration of Rs. 1,38,73,600, for which the learned counsel for the assessee expressed no objection. 9. We heard both sides and perused the orders of the lower authorities and perused ..... X X X X Extracts X X X X X X X X Extracts X X X X
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