9911796707
TMI Blog2015 (10) TMI 469X X X X Extracts X X X X X X X X Extracts X X X X ..... es carried out by the DDIT (Investigation) which indicated that the company had booked bogus purchases resulting in suppressed profits, that some concerns used for the purposes of booking these bogus purchases were owned by the employees and associates of the assessee, and that some concerns were created to route unaccounted sales of the air conditioners manufactured or assembled by the assessee. These findings were based on, inter alia, statement of one K B Thakkar recorded by the DDIT and it was this statement which was foundational material supporting the allegation of bogus purchases. The case against the assessee thus was that a part of the purchases booked in the accounts of the assessee was bogus purchases and the payments made by the assessee by cheques were returned to the assessee in cash. The assessee had repudiated these allegations and pointed out that this K B Thakkar was acting malafide, that even if any part of the purchases was bogus, so far as the assessee was concerned, the payments were duly made by the assessee and it is incorrect that the any part of these payments came back to the assessee. It was also contended that so far as the alleged bogus purchases were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g heard, as also given copies of the statements recorded earlier and paper book filed, as directed by the Hon'ble ITAT. Hence, the appellant's submission in this regard is rejected. Further, from the discussions made by the AO in the assessment order and the facts gathered, it is clear that there were bogus purchases claimed by the appellant for which disallowance was called for. The appellant's contention that if any addition is to be made, simultaneously deduction should be allowed for cash embezzlement as business loss, is not acceptable, because the claim of loss by embezzlement put forth by the appellant is not convincing. The assessee had knowledge of bogus bank accounts opened in the name of different employees to accommodate inflation of purchases in its accounts. Fact remains that the amount being deposited in these bank accounts opened in the name of the employees were being withdrawn from time to time and being handed over to SVS (Sunil V Shah, a director of the company), as stated by the KBT (K B Thakkar, a former business associate who was said to be handling all the accounts and tax matters and who had given a statement against the assessee), which was a continuous pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y sustainable, cases to hold good in law with the matter having been restored to the file of the Assessing Officer. The Tribunal has not confirmed any part of the order nor has the Tribunal dealt with the merits of the matter. There cannot be a deemed approval of any findings of the AO or the CIT(A) when the Tribunal has not even examined that aspect of the matter. There is no material before us to come to a definite conclusion, as has been arrived by the CIT(A), that the assessee had full knowledge of the bank accounts being used to siphon funds and for booking bogus purchases and that the assessee or Sunil V Shah were involved in receiving cash in lieu of the cheques issued by the assessee. A statement having been given by an individual, which states so, cannot be treated as the last word, because, as a matter of record, the assessee has made counter allegations in civil and criminal proceedings. There has to be something more than an allegation to come to a definite conclusion in this regard. The statement of K B Thakkar is undoubtedly an important piece of document but such a statement per se cannot be conclusive to decide the issue against the assessee. All the surrounding fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) cannot simply refer to the findings in the first round of proceedings and decide the matter in the light of these findings, because, in such a situation, the Tribunal will not have any opportunity of examining correctness of the stand taken by the Assessing Officer. The finding of the authorities below should be through a speaking order, and with appropriate reference to the material on the basis of which such findings are based, so that these findings can be examined on the standalone basis. It is also a matter of record that the assessee has initiated certain civil and criminal proceedings but these proceedings have not reached finality as yet. None of the authorities below has dealt with or analysed any of these documents. We have also noted that, during the course of the proceedings before us, it was vehemently contended by the learned Departmental Representative that either the income should be taxed in the hands of the person, who is alleged to have embezzled the monies, or deduction for the embezzlement should not be allowed in the case of the assessee. We are unable to see any legally sustainable merits in this objection. Whether or not an amount is brought to tax in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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