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2015 (7) TMI 693 - KARNATAKA HIGH COURT

2015 (7) TMI 693 - KARNATAKA HIGH COURT - TMI - Expenditure towards “granite raising expenses” disallowed - Held that:- The Tribunal has rightly held that when an assessee claims expenditure for business purpose, the onus is on the assessee to prove and it has also found that on facts, assessee had failed to establish this fact. At this juncture itself, it would be appropriate to deal with the contention raised by the learned counsel namely, the assessing Officer not affording opportunity to the .....

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llowed as has been done rightly so by the assessing Officer in the instant case.

The payments which the assessee claims to have paid to these three persons relates to granite extraction charges. This Court cannot lose sight of the fact that for extraction of granite apart from manual labour, equipments and machineries would be used by the labour contractors and the payments are made on weekly basis to the manual labourers. In the instant case, it has been rightly noticed by the assess .....

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i H. appearing for appellant - assessee and Sri K.V.Aravind, appearing for respondent - revenue. We have perused the orders passed by the assessing Officer, CIT (A) and Income Tax Appellate Tribunal, Bengaluru 'C' Bench. 2. For the assessment year 2008-09, assessee filed the return of income declaring total income of ₹ 4,26,160/- besides the agricultural income. After issuing notice under Section 143(2) of the Income Tax Act, 1961 assessment order came to be framed on 31.12.2010 wh .....

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luru 'C' Bench and the Tribunal on re-appreciation of entire facts and perusal of the records was of the view that the order passed by the first appellate authority did not suffer from any legal infirmity calling for interference and as such by order dated 11.07.2014 allowed the appeal in part (on other issues). 3. Being aggrieved by the disallowance of the expenditure of ₹ 28,40,160/-, the assessee has filed this appeal contending interalia that the payments made to three persons .....

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and is liable to be set aside. She would elaborate her submission by contending that when the authorities have not disputed the particulars of granite purchased, produced and sold by the assessee during the relevant year, it should be logically concluded that there would be no sale without equal quantity of granite production or purchases. Hence, on these grounds she seeks for formulating the substantial question of law as indicated in the appeal memorandum and prays for answering the same in f .....

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. Hence, he prays for dismissal of the appeal. 5. Having heard the learned Advocates appearing for the parties and on perusal of the records, it would clearly indicate that the assessee had debited ₹ 28,40,160/- as 'granite raising expenses' which was said to have been incurred towards extraction of granite and claimed that said amount was paid to three persons namely, Sriyuths Sundarraj, Basavaraj and Nagendra in a sum of ₹ 9,15,100/-, ₹ 9,75,800/- and ₹ 9,49,260 .....

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shed his statement and has admitted to the following effect: (i) "he carried on the business of extracting granties jointly with Sri. Sundarajan and Sri. Basavaraj (ii) he does not know the assessee and does not have any transaction with the assessee; (iii) he does not know the nature of liability created by the assessee in his books; (iv) he never worked as a raising contractor for the assessee nor issued any bills/statements; (v) the receipt of amount of ₹ 9.5 lakhs is withdrawal of .....

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ncome by him and also stated that the assessee's brother Sri G Basavaraj (to whom the assessee had also paid a sum of ₹ 9,75,800/-) had obtained signatures in the guise of obtaining PAN card for him. This would only indicate that there has been inconsistency between the stand of the assessee and the statement furnished by Sri G Nagendra. 7. No other material evidence was produced by the assessee for verification by the assessing Officer and as such, the assessing Officer came to a conc .....

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e other than the partner of Sri Basavaraj. During the pendency of appeal proceedings, the first appellate authority directed the assessing Officer to give further opportunity to the assessee to prove his claims. Even at that stage, assessee did not tender any evidence except reiterating his earlier stand. Thus, taking note of the statement made by Sri Nagendra that he had received amount of ₹ 9,49,260/- as withdrawal from his capital from the partnership firm, it was held that said transac .....

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