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TMI Blog2015 (6) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... a) From the records there is no stock in hand as such. (b) The assessee did not enter any actual sale purchase transaction." 3. Briefly stated the facts giving rise to this appeals are that the assessee filed return of income declaring of loss of Rs. 17,39,750/-. Subsequently, the case was picked up for scrutiny and a notice u/s 143(2) of the Income Tax Act, 1961 (for short the Act) issued to the assessee. The assessing officer after seeking explanation from the assessee observed that the purchases expenses, of Rs. 13,10,000/-, software development and support expenses Rs. 75,000/- and printing & stationary expenses amount into Rs. 5,83,410/- as claimed by the assessee are bogus and hence, these are not allowable. The Ld. Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. and the trading/sale in computer software cannot be held as income from other sources as the assessee is registered with the VAT department of Government of Delhi vide registration no. 07170340412 and has regularly being filed its VAT return. The Ld. Counsel vehemently contended that no sale can be conducted without any purchase and the assessing officer on one hand disallowed the purchases made by the assessee and on the other hand the AO wrongly alleged that the receipts from sale deserve to be assessed to tax under the head of "income from other sources". The Ld. Counsel supporting the impugned order submitted that the CIT(A) took a reasonable and justified approach and deleted the addition. 6. The Ld. Counsel of the assessee also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions at the very outset, we observe that the assessing officer made impugned three additions with following conclusion; "Conclusion Sale is the secondary aspect to existing stock and/or purchases. From the records it is clear that there was no stock-in-hand as such. The assessee also failed to establish its purchases. As a result, the expenses, claimed to have been connected with the sale-purchase, also cannot be held genuine. Another major head of expenditure, i.e. Printing & Stationary also remains un-established. The only inference that can judiciously be drawn from the above all is that the assessee did not enter into any actual sale-purchase transaction. This whole picture of purchasesale was painted to set-off the incomes. Thereb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany has claimed purchases are not filing proper income tax returns cannot be held against the appellant. I agree with the submissions of the ld. AR that the AO was free to take action as per law against those parties. The AO himself has mentioned that the assessee has actually received these amounts and the same were revenue receipts though the same were not accepted as business receipts. In view of the above facts and circumstances of the case I agree with the submissions of the ld. AR that the addition made by the AO is not justified. Hence, the same is deleted. These grounds of appeal are allowed." 10. In view of above conclusion of the AO it is clear that the assessing officer held purchase expenses, software development & support exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated documents, which were also filed before us in the paper book of 61 pages and simply noted that no defects was pointed out by the AO in the purchases and sale vouchers and audited books of accounts of the assessee and the CIT(A) agreed with the submissions of the assessee without any adjudication. We also observe that in operative paragraph no. 5 there is no observations or findings in regard to the software development and support expenses and printing and stationary expenses but the CIT(A) has deleted entire additions made by the AO on all three issues which is not a proper and justified approach. 12. Under facts and circumstances as noted above, we are inclined to hold that the revenue authorities below has not properly considered s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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