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2015 (6) TMI 896 - ITAT DELHI

2015 (6) TMI 896 - ITAT DELHI - TMI - Bogus purchase expenses, software development & support expense and printing and stationary expenses - CIT(A) deleetd addition - Held that:- The revenue authorities below has not properly considered submissions, details, explanation and other relevant documentary evidence and related bills and vouchers audited books of accounts of the assessee and the AO proceeded to make additions without bringing out any adverse material or facts against the assessee and w .....

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sment to the file of Assessing Officer for framing a fresh assessment, after affording few opportunity of hearing for assessee and without being prejudiced from the earlier assessment order and impugned order. - Decided in favour of revenue for statistical purposes - ITA NO. 1164/DEL/2013 - Dated:- 17-4-2015 - Shri N.K.Saini And Shri C.M.Garg JJ. For the Appellant : Ms. Y.Kakkar, DR For the Respondent : Mr. Sanjeev Sapra, Adv. ORDER Per C.M.Garg, JUDICIAL MEMBER : This appeal has been preferred .....

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tion. 3. Briefly stated the facts giving rise to this appeals are that the assessee filed return of income declaring of loss of ₹ 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 ₹ 13,10,000/-, software development and support expenses ₹ 75,000/- and printing & .....

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ess receipts then otherwise as a revenue receipts the amount received from sale is an income in the hands of assessee. The assessing officer finalise the assessment at total income of ₹ 5,43,654/- as against the return income of the assessee. 4. Being aggrieved by the above assessment order the assessee preferred an appeal before CIT(A) which was partly allowed on the ground of purchase, software development and support expenses and stationary & printing expenses. Now, the aggrieved re .....

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opinion of the assessing officer, not satisfactory. The Ld. Counsel of the assessee replied that the assessee company carried out trading in computer software 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 .....

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berations and conclusion and it was not just and proper to held impugned expenses as bogus without pointing out any defect in the books of account of assessee and without rejecting the same by following the procedure as stipulated u/s 145(3) of the Act. 7. Replying to the above contentions, the Ld. DR also placed the rejoinder and submitted that the CIT(A) has simply noted that the AO has not pointed out any defects in the audited books of accounts of the assessee which were produced before him .....

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sion about other two issues viz. software development support expenses and printing and stationary expenses which were held as bogus by the assessing officer. The Ld. DR strenuously contended that the CIT(A) granted for the assessee all three issues without any proper, just and cogent adjudication and therefore the order of the CIT(A) is not sustainable. 8. On careful consideration of above rival submissions at the very outset, we observe that the assessing officer made impugned three additions .....

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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. Thereby the assessee undertook an attempt to evade due taxes on its receipts. In light of the above, the purchases expenses, Software Development & Support Expenses and Printing & Stationary expenses are held as bogus and hence not allowable. Further, loss from exchange Rate fluctuation is not revenue expenditure in the case of the assessee .....

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by the AO. I find that the AO has based his conclusion on the fact that parties in question namely Surya Traders and Chand Trading Company have filed their income tax return in ITR no. 2 in assessment year 2009-10 and have not shown any income from business or profession and Mihir Impex has not filed any return for assessment year 2009-10. However, the AO has not pointed out any defects in the audited books of the accounts of the assessee which were produced before him. The AO has also not poin .....

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me 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 expense and printing and stationary expenses as bogus and not allowable. The assessing officer has al .....

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n the assessment order. In this situation, we are inclined to hold that the Assessing Officer made additions without giving any findings on the explanation, details and documents filed by the assessee and without pointing out any defects in the purchase, sales and other related vouchers and in the audited books of accounts of the assessee which were produced before AO during assessment proceedings. 11. From the bare reading of the impugned order we also note that the CIT(A) has reproduced writte .....

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