TMI Blog2015 (1) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... lpashree Saree and M/s. S.S Textiles in the books of the assessee company revealed that some payments were given by cheques - The Bank Manager was requested to furnish the copies of the cheques issued to M/s. Shilpashree Saree and M/s. S.S Textiles - The copies of the cheques as collected from the Bank ascertained that the assessee did not issued cheques to M/s. Shilpa Shree Saree and M/s. S.S Textiles, but issued to M/s. Kalna Machines Pvt. Ltd and Vikash Chowdhury, one of the directors of the assessee company. CIT(A) has found that the AO was being asked to enquire the transactions - the powers of the CIT(A) are coterminus with that of the AO - If the AO has failed to perform the necessary examination, then it was incumbent on the CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ively from two parties as unexplained expenditure and bogus sundry debtors of ₹ 5,00,000/-, ₹ 2,55,615/- ₹ 78,375/- respectively from these parties as income from undisclosed sources and also unexplained closing stock of ₹ 24,166/- as income from other sources without verifying the genuineness and creditworthiness of the parties involved in the transactions with the assessee by way of purchases and sales. 2. That on the facts and circumstances of the case, ld. CIT(A) erred in law in treating the business as genuine on the basis of receipt and payment basis where the payment was found to be false and during assessment stage, business activity as claimed by the assessee was proved false in absence of any circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny, Sarita Chowdhury, wife of Vikash Chowdhury instead of seller. The shares which were sold (as claimed) to M/s. Shilpashree Saree and M/s. S.S Textiles had not been registered in the company in their names. It proves that the money had been circulated back to Director and his family under camouflage of purchase. (D) The company had no business establishment as discussed above. All these circumstantial evidences prove that there had not been purchase by the assessee. Hence, the argument of the assessee is rejected and ₹ 5,84,151 and ₹ 4,42,170/- are added treating same as unexplained expenditure. Again, Spinter Saree was the Debtor in the books of the assessee company for ₹ 77,900 and S.S Creation was the debtor of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charged its onus of proof. Further, in this case, the assessing officer has made additions on account of both receipts and payments, closing stock as also deposits in bank and cash in hand treating the same as income of the appellant from other sources. Even if the business is held to be a sham affair and the receipts are held to be bogus, it is beyond the stretch of imagination that the other parts of the trading account/profit and loss account or balancesheet could also be added as the income of the appellant from other sources. As far as the facts go, the appellant, has, during the year shown availability of funds in the following manner- Receipts (i)Receipts from sundry debtors (M/s. Roop Laxmi Sarees Pvt. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifference amount, i.e. the benefit derived by the appellant company. However, in the instant case such difference is a deficit figure, i.e. liabilities over assets, which in no case could be a subject matter of addition. This apart, the materials available on record including those brought on record as a result of remanding the case clearly establish the veracity of the sales. When this is so, there is no doubt about the sources of deposits in the bank account, or about the sundry creditors. It is not the case of the appellant that it had started the business during the year, nor had closed down the business during the year under consideration. The business is shown to have been started in the financial year 20005-06 and continued in the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case and found that they are not genuine. The ledgers in the name of M/s.Shilpashree Saree and M/s. S.S Textiles in the books of the assessee company revealed that some payments were given by cheques. The Bank Manager was requested to furnish the copies of the cheques issued to M/s. Shilpashree Saree and M/s. S.S Textiles. The copies of the cheques as collected from the Bank ascertained that the assessee did not issued cheques to M/s. Shilpa Shree Saree and M/s. S.S Textiles, but issued to M/s. Kalna Machines Pvt. Ltd and Vikash Chowdhury, one of the directors of the assessee company. It is clearly seen that the AO s examination revealed that the transactions were not aboveboard. However, the assessee has made submissions before the l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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