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Callina Care Overseas Pvt. Ltd. Versus ITO

2015 (5) TMI 112 - ITAT DELHI

Bogus transactions - Addition on expenditure for purchase of packing material - Unexplained share application money - Applicability of revised monetary limits for filing appeal to Tribunal at ₹ 4 Lacs - Instruction No. 5/14 issued by the CBDT on 10.7.2014 - Held that:- It is indisputable fact during the course of assessment proceedings, the Assessing Officer had issued summon to M/s S.R. Enterprises (seller of packing material). The notices were returned unserved and same was duly intimate .....

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jnish Tyagi was no way connected with either of M/s SR Enterprises nor the assessee.

The Bank account of M/s SR Enterprises also was verified by the Assessing Officer. It was noted the amount that was received from the assessee was withdrawn immediately by cash. Though the goods were sold in beginning of the financial year by SR Enterprises no payment was made by the assessee during the entire financial year. Some payments were made in the subsequent year to M/s SR Enterprises and as .....

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1) TMI 294 - ITAT KOLKATA] which have elaborately considered the identical issue, we hold that instruction No. 5/2014 issued by the CBDT on 10.7.2014 is applicable to the pending appeals. In the instant case, the tax effect being below ₹ 4 lacs, without going into the issue on merit, we dismiss the appeal of the revenue in liminee. It is to be mentioned that Ld. DR was unable to point out any exceptional circumstances /situation (mentioned inboard instruction No. 5 /2014) for filing an app .....

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peal (ITA No. 3739/Del/2011), the solitary ground that is raised is whether the CIT(A) is justified in confirming the addition of ₹ 67,21,611/- made by the Assessing Officer on account of expenses on packaging material. In the Revenue s appeal (ITA No.3953/Del/2011), the solitary issue that is raised is whether the CIT(A) is justified in deleting the addition of ₹ 12,00,000/- made by the AO u/s 68 of the Act on account of unexplained share application money. We shall first take up fo .....

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intimated of the notice being unserved. The inspector attached to the Assessing Officer was directed to conduct field enquiries. The inspector filed a report that there is no concern by the name M/s SR Enterprises in address given by the assessee. The assessee was also informed about the report of the Inspector. It was submitted before the Assessing Officer that assessee has purchased special packing material i.e. PP bags for its export merchandise. Copy of the purchased order received from over .....

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ed by the AO that the total export of BOPP film was ₹ 17,83,763/-, and assessee had claimed packing expenses to the tune of ₹ 67,21,611/-. The Assessing Officer after analyzing the invoices submitted by the seller of the packing material, namely, S.R. Enterprises opined that the assessee s company was a major buyer from the M/s SR Enterprises and still the assessee was unable to produce the party. According to the AO, the contention of the assessee that M/s Enterprises had sales tax .....

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7,21,611/- being unexplained expenses, the assessee preferred an appeal before the CIT(A). Before the CIT(A), assessee submitted an affidavit of Shri Rajnish Tyagi detailing the purchases made by the assessee from M/s SR Enterprises. The additional evidence filed by the assessee was placed on record by the CIT(A). The CIT(A) called for the comments of the Assessing Officer. The Assessing Officer furnished detailed remand reports. The assessee also filed a rejoinder to the remand report. The CIT( .....

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issued on the address given by the assessee. The notices remained unserved and returned undelivered. The Id. AO informed the assessee about this development and also issued a show cause notice. Further, the Id. AO sent Inspectors of Income Tax for verification on the field. The entity, M/s SR Enterprises was not found and was reported to have never existed. During the appellate stage, the assessee reiterated that direct supplies were made by M/s SR Enterprises to the purchasers and also submitte .....

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s much as one of the notices was returned undelivered. The second notice issued at Kavi Nagar, remained uncomplied with, though. 12. The assessee is repeatedly stating that he has no connection with M/s SR Enterprises. This may or may not be true. However, page 4 of the impugned order clearly suggests that there was a close connection between the assessee and M/s SR Enterprises. Out of the 36 bills raised by M/s SR Enterprises, 20 of them pertained to the assessee. The goods were sold on credit. .....

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iated that who took the payments. It cannot also be ascertained that who approached the assessee for the said payments. It is unbelievable that the assessee was not in contact with M/s SR Enterprises, in case it existed. To my mind, the proprietorship concern did not exist, not withstanding the sales tax number that it had. The existence of the sales tax number does not have a bearing on the case considering the fact that sustained investigations by the Income Tax authorities clearly reveal the .....

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₹ 67,21,611/- is upheld. 6. The assessee being aggrieved is in appeal before us. The Ld. counsel submitted that the CIT(A) had erred both on facts and law in confirming the addition and holding the transaction of purchase of packing material from M/s S.R. Enterprises was a bogus transaction. It was submitted that all material and evidences were placed on record to prove the genuineness of the transaction. It was further contended that the CIT(A) has erred both on facts and law in consider .....

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ding the purchases to be bogus. It is indisputable fact during the course of assessment proceedings, the Assessing Officer had issued summon to M/s S.R. Enterprises (seller of packing material). The notices were returned unserved and same was duly intimated to the assessee. The two Inspectors who carried out local enquiries on 18.10.2010 also could not locate the address of M/s SR Enterprises given by the assessee. None of the outlets in the area had ever heard of M/s SR Enterprises. In the cour .....

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mediately by cash. Though the goods were sold in beginning of the financial year by SR Enterprises no payment was made by the assessee during the entire financial year. Some payments were made in the subsequent year to M/s SR Enterprises and as mentioned earlier the beneficiaries of these payments could not verified. The findings of the Income Tax authorities have clearly established that so called purchases made by the assessee from M/s SR Enterprises are nothing but bogus transactions, just to .....

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Counsel for the assessee submitted that the tax effect in the appeal of the revenue is below the prescribed limit for filing of appeal before the ITAT. It was submitted the tax effect is below ₹ 4 lakhs. The Ld. Counsel for the assesses submitted instruction No. 5/2014 which prescribed the revised monetary limits for filing appeal to Tribunal at ₹ 4 lacs is applicable to pending cases and relied on the recent Kolkata Tribunal Bench order in the case of DCIT vs. Sushila Saraogi repor .....

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