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TMI Blog2015 (6) TMI 845X X X X Extracts X X X X X X X X Extracts X X X X ..... he outset, it was observed by the Bench that the appeals, filed on 13.12.2013 and 12.02.2013, are, in view of the common date of communication of the impugned orders, i.e., 13.09.2012, out of time by 93 days and 92 days for the two successive years respectively. The reason for the delay stands explained by way of an affidavit dated 12.12.2013 by Shri Pradeep R. Kamat, director of the assessee-company, averring that he is looking after the affairs of the company; further stating the said reason as on account of being in attendance of his ailing mother, namely Smt. Shantabai R. Kamat, who was seriously ill at the relevant point of time, also enclosing along with her death certificate for 20.10.2012. The papers relevant for the purpose of fili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e abnormal conditions, if any, attending the sales thereof, being in fact made in the regular course of business, throughout the year and, further, out of purchases made during the year, etc. were furnished. He, accordingly, disallowed 25% of the said loss, i.e., Rs. 64.65 lacs, assessing the income at Rs. 66.26 lacs, as against the returned income of Rs. 1,60,840/-. In appeal, the assessee furnished copies of the purchase and sale bills. To verify the same, as well as to allow the assessee another opportunity to state its case, a remand report was called for by the first appellate authority, i.e., from the assessing authority. In the remand proceedings, it was observed that the sales bills adduced in the appellate proceedings included tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was in fact at variance with its trading parameters; for example, godown rent had been paid at a meager amount of Rs. 84,325/-, while the opening and the closing stock, i.e., at the beginning and end of the year, was at over Rs. 400 lacs and Rs. 300 lacs respectively. The moot question was why would it regularly purchase goods at a higher rate, only to sell them at a lower rate. The contention of the assessee having been allowed quality rebate at Rs. 104.25 lacs would also be of little consequence in-as-much as the same would only operate to reduce the quantum of the trading loss, which would thus be reckoned at Rs. 154.36 lacs, i.e., as against the apparent loss of Rs. 258.61 lacs. It was thus imminently clear that the assessee was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessment for A.Y. 2009-10 has been framed u/s.144 r/w s. 145(3) of the Act, while the ld. CIT(A) has confirmed the assessment for both the years on the same basis, i.e., by estimating the income, upon rejection of the assessee's books, at 1% of the aggregate of the purchase and sales for the year. Our second observation is that in the facts of and circumstances of the case the inference of the purchases and sales being bogus is unmistakable; the whole gamut of operations pointing to the transactions being not genuine. There is no reference to the market rates, or the trading profit earned by the other dealers in trading, etc., i.e., in explanation of the trading loss. The assessee, in fact, itself does not seriously dispute the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t disallowed in full, indicating an acceptance of the book results for all other purposes. Disallowance of loss, thus, would not be appropriate. The same is also inconsistent with the inference of the assessee being not engaged in actual trading, but only in accommodation business, i.e., for its' entire purchases and sales, and not only the sales made at a loss, so that its' accounts and, consequently, book results, warrant rejection, as indeed was done for A.Y. 2009-10, estimating the income. Then, again, what is the basis of the assessment at 2% of the total purchases, i.e., the measure adopted for estimating the income for A.Y. 2007-08 in the case of VDPL, on which assessment, as modified by the first appellate authority, the assessee re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not reasonable or is excessive, which, for the foregoing reasons, we find it as not. We are conscious that the assessee has shown to have been allowed quality rebate by its supplier/s, effectively reducing the trading loss claimed by it. That, however, would have no bearing or impact in-as-much as the loss or its quantum is not in issue; the quality rebate being not a factor for VAT credit. Rather, the assessee stands to gain directly, i.e., to the extent of VAT credit, in case of 'loss' in-as-much as its stands to be allowed credit on its purchases, which are therefore higher than the sale value, on which VAT credit would stand to be passed on by it, and which also explains, or perhaps so, the reason for the unsubstantiated and unexplai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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