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2015 (10) TMI 2432 - ITAT DELHI

2015 (10) TMI 2432 - ITAT DELHI - TMI - Fraudulent claim of drawback and DEPB credit by export of mis-declared goods - extension of the enquiry to the unexplained credit and the bogus purchases - reopening of assessment - Held that:- Though in the reasons, the issue of bogus purchases has not been specifically mentioned and the allegation is limited to the extent of fraudulent claim of drawback and DEPB, but in the facts and circumstances of the case, it cannot be said that Assessing Officer was .....

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ions were made which were completely different than the issue on which reopening was done. In this case the reopening has been done on the allegation of fraudulent claim of drawback and DEPB credit and this will include purchases and sales on which such claim was made. As such this contention of the assessee is rejected.

As going through the documents filed by the assessee in support of the purchases made by it. The learned DR could not point out any error or defect in these documents .....

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to substantiate its allegation that the purchases are not genuine. We are of the view that in the facts and circumstance, the finding of the Assessing Officer cannot be sustained.

On the issue whether sales are not genuine, from the assessment order we note that the Assessing Officer has not tinkered with the trading account. He has also not rejected the books of accounts. The assessee during the course of the assessment had produced complete books of account which included sales inv .....

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py of account of the suppliers placed in the paper book which were before the Assessing Officer as well as learned CIT(A). This chart was not filed by the assessee and that is why the learned CIT(A) has enclosed this chart as part of its order. On enquiry from the Bench whether there is any factual inaccuracy in this chart prepared by the learned CIT(A), the learned DR was fair enough to admit that there does not appear to be any factual inaccuracy so far as the peak amount of the payments made .....

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t on sales. For this purpose the learned CIT(A) has worked out the comparative gross profit rate and on that basis he has estimated the income on the sales made by the assessee. The learned CIT(A) has gone a step further. He has also worked out the investments, the assessee would have made on account of the payments made for so called alleged purchases. Thus the methodology applied by the learned CIT (A) is correct approach once he has held that purchases are not genuine. However since we have h .....

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ssing Officer, after allowing deduction of cost of purchases at the rate of 6.35%, he has disallowed the balance amount brought in by way of export sale as an unexplained credit - Held that:- There is no material to hold that these purchases were not genuine. Further the fact that the export was made in the preceding year cannot be ignored. The allegation in the DRI report pertains to subsequent year when one of the shipments was examined. The subsequent shipment cannot be a basis for holding th .....

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verse comment by the Assessing Officer on this aspect also. In view of these facts we are of the view that the learned CIT(A) was not justified in sustaining this addition

There is no discussion in the assessment order about the amount of the purchases which has been claimed as deduction against such export. The Assessing Officer, in case was having any doubt about the export sale, the right course of action would have been to disallow the purchases against such export as difference .....

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dent by: Shri R.L. Meena, Sr. DR ORDER PER I.C. SUDHIR: JUDICIAL MEMBER These are two cross-appeals filed by the assessee as well as Revenue against the order passed by the learned CIT(A) dated 31.12.2007. 2. The return of income was originally filed by the assessee on 30th November, 2000 declaring a loss of ₹ 66,05,500/-. The assessment of the same was completed under section 143(3) at a loss of ₹ 52,74,450/- vide order dated 31.12.2002. 3. Later on the basis of the information rece .....

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The AO held that purchases of ₹ 16,34,83,676/- made by the assessee are not genuine and accordingly he made addition of the same. The AO further held that export sales declared by the assessee is also bogus and after allowing a deduction of 6.35% against export sale of ₹ 65,87,872/-added back the balance amount of ₹ 61,69,546/- as unexplained credit. 5. Aggrieved by the order of the Assessing Officer, the assessee came in appeal before the learned CIT(A), both on the issue of r .....

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ssessment. 6. As regards the addition of ₹ 16,34,83,676/-, the learned CIT(A) held that the Assessing Officer has not disputed the corresponding sales made to the third parties though he has held that the purchases from the four parties are not genuine. Considering this fact, he held that in such a situation the peak amount of the payment made in purchases along with gross profit rate of such trading activity need to be added as income instead of making addition of the entire purchase. The .....

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t of the understatement of the gross profit. Thus the learned CIT(A) restricted the addition to ₹ 80,22,802/- as against ₹ 16,34,83,676/- made by the Assessing Officer. 7. As regards the addition of ₹ 61,69,546/- made by the Assessing Officer on account of the inflated export sale, the learned CIT(A) held that the assessee has failed to contradict the findings of the Assessing Officer that the overseas parties were not existing and accordingly confirmed the addition of the enti .....

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rial facts for necessary assessment, the notice issued beyond a period of 4 years from the end of the relevant assessment year was bad in law and hence the assessment was quashed. 9. Since the reassessment order was annulled, the ITAT did not decide the other grounds of appeal on merit. 10. Aggrieved by the order of the ITAT, the Revenue filed appeal before the Delhi High Court. The Hon ble Delhi High Court vide order dated 17.01.2012 reversed the finding of the ITAT on the issue of reopening of .....

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ing before the Tribunal or raised by the Respondent-assessee. 11. In view of the matter being remitted back to ITAT by the High Court both these appeals were heard together. 12. In the assessee s appeal it has raised six grounds of appeal which read as under:- 1. That on the facts and in the circumstances of the case, the Learned Commissioner of Income Tax (Appeals) erred in law in holding that the initiation and further completing reassessment proceedings under section 147 of the Income Tax Act .....

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ars from the end of the assessment year, while assessment was already made under section 143(3) by the Deputy Commissioner of Income Tax, Central Circle-3, New Delhi on 31.12.2002 and the reasons recorded has not stated about the failure on the part of appellant to disclose fully ad truly all material facts necessary for assessment, due to which there has been an escapement of income chargeable to tax. 3. That on the facts and in the circumstances of the case, the Learned Commissioner of Income .....

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de by the appellant company as unexplained credits only on the basis of doubts, suspicion, conjectures and surmises and without confronting / made available to the appellant the materials used as evidence against the appellant. 5. That on the facts and in the circumstances of the case, the Learned Commissioner of Income Tax (Appeals) erred in holding that extrapolating the findings of the DRI, Amritsar is valid in respect of goods to be exported out of India in the month of May 2000 to goods alr .....

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without proper appreciation of all the facts as brought out clearly from Para 6 onwards of the Assessment order dated 31.12.2000 including the facts established during enquiries by DRI and Sales Tax Department and the abnormally low yield declared by the assessee. (2) On the facts and in the circumstances of the case as well as in law, the Ld. CIT(A) erred in granting relief to the assessee on the basis of additional evidence in the shape of chart of peak value of investment admitted during app .....

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7; 80,22,802/- out of the total addition of ₹ 16,34,83,676/-made by the AO. Grounds no.1 and 2 in Revenue s appeal are regarding deletion of the balance amount of ₹ 15,54,60,874/- out of the addition of ₹ 16,34,83,676/- made by the AO. Since the issue in these grounds of appeal are common, the same are being taken together. 16. It was contended by the learned DR that the AO has received information from the DRI that the assessee was involved in fraudulent claim of drawback and .....

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the only course open to the AO in such a situation was to disallow the claim and make the addition. 17. The learned DR further submitted that the learned CIT(A) was not justified in working out the peak of the purchases and restricting the addition to such peak along with the gross profit on such purchases. It was further contended that the acceptance of the sales cannot be a ground for allowing deduction on account of the purchases. It was also contended by the learned DR that the learned CIT( .....

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plier including these four parties. The books of account along with bills and vouchers, central excise record and stock register were also produced for verification. In response to the AO s show cause notice regarding the allegation levied by the DRI, the assessee has substantiated the genuineness of the purchases as well as sales by producing the Item-wise quantitative details of Direct / Indirect Exports Sales, Purchases, Production and Closing Stock, Copies of Purchases Invoices, Copies of Ex .....

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een carried out by the AO himself. The assessee has submitted all its documents and evidences and the AO has not brought any material to impeach or discredit the evidences submitted by the assessee in support of genuineness of the purchases. The AO has merely relied upon the information which it has received from the DRI for making the addition. 21. It was further contended that information from the DRI may be a starting point for carrying out the investigation but cannot be conclusive particula .....

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rt has held that the impugned show cause notice as well as the impugned order passed by the Custom authorities did not deal with the live consignment but pertain to earlier consignments. The High Court further held that the past export cannot be challenged as being improper on the basis of any irregularities noticed in the subsequent exports. 22. It was further stated that this issue was referred by the DRI to CBI. Thereafter CBI has conducted comprehensive investigation and it found that the al .....

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:- (i) CIT vs. FairFinvest Limited 357 ITR 146 (Del) (ii) CIT vs. Gangeshwari Metal (P) Ltd. 361 ITR 10 (Del) (iii) Goel Sons Golden Estate (P) Ltd., ITA No. 212/2012 dt. 11.4.2012 23. On the issue that the Assessing Officer was not justified in making addition of the entire purchases, it was contended by the learned AR that the Assessing Officer has not tinkered with the sales. This means that the trading results per se are accepted and if so the right course for the Assessing Officer was to es .....

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It was further contended that the learned CIT(A) was not justified in enhancing the gross profit rate. The assessee has carried on the business in the normal course and without there being any finding that assessee has received anything over and above the sale consideration stated in the books of accounts enhancement of the gross profit rate is untenable. It was further contended that there is no finding recorded by the Assessing Officer as well as learned CIT(A) that the value of the purchases .....

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n fact the learned CIT(A) himself has prepared the peak amount of the payment made against purchase as is evident from the order of the learned CIT(A) at Page 36.The same has been enclosed as Annexure A to his order by the learned CIT(A). This chart was prepared by the learned CIT(A) on the basis of copy of accounts of the suppliers filed before Assessing Officer as well as learned CIT(A) and no fresh evidences were filed by the assessee before the learned CIT(A). 25. It was further contended by .....

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ment order. In this regard the learned AR invited our attention to the office note appended to the assessment order whereby it has been accepted by the Assessing Officer that no addition is being made on this account. In support of the above proposition, the learned AR relied upon the following judgments:- (i) CIT vs. Ranbaxy Laboratories Ltd. vs. DCIT (2013) 351 ITR 23 (Del) (ii) CIT vs. Jet Airways (I) Ltd. 331 ITR 236 (Bom) (iii) Oriental Bank of Commerce Vs ACIT W. P. © 2594/2013, CM 49 .....

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e Ltd vs CIT (Bom) ITA no. 856/2011 (xii) CIT vs ICICI Bank Ltd 349 ITR 482 (Bom) 26. We have heard both the parties and perused the assessment order and the order passed by the learned CIT(A) and also gone through the paper book on record. The learned AR has raised a legal issue regarding no addition being made in the reassessment proceeding for which assessment was reopened. It will be appropriate first to deal with this issue raised by the learned AR. As per learned AR this assessment was reo .....

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I. Tax Act in the case of M/s Nandan Auto Tech. Ltd. in A.Y. 2000-01.Erstwhile M/s Garg Forgings & Castings Ltd. In this case, return declaring a loss of ₹ 66,05,500/- was filed on 30.11.2000. The assessment under section 143(2) of the I.T. Act was completed on 31.12.2002 at a loss of ₹ 52,74,450/-. The Asst. Director of Income Tax (Inv)-III, Ludhiana vide letter dated 27.03.2007 has reported that as per DRI notice No. 1326 dated 03.10.2002, ShVinod Kumar Garg and Sh. N.D. Garg, .....

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In view of the above and the information detailed in the letter of Asstt. Director of Income Tax (Inv.)-III, Ludhiana, No. NIL dated 22-03-07, I have reasons to believe that the income chargeable to tax has escaped assessment to the extent of fraudulent claim of drawback and DEPB credit by way of exporting mis-declared goods. Hence, kind approval of CIT-V, New Delhi is solicited for issue of notice u/s 148 r/w Sec. 147 of the I.T. Act, 1961. 27. The Assessing Officer thereafter has completed the .....

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ect of claim of duty draw back, DEPB received the assessee had stated the company recognize the income from duty draw back/ DEPB on receipt basis as the income cannot be ascertained at time of eligible export and the amount is finalized by the Govt. authorities after confirming all facts related to export and realization. The assessee followed the same accounting method on earlier years also and there is no change in method of accounting during the current financial year. The assessee company ha .....

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872 40,89,300 2000-01 2000-01 56,75,319 34,83,000 2000-01 2000-01 66,21,203 38,60,325 Not received The assessee had declared the Duty Draw Back of ₹ 53,19,476/- in A.Y. 1999-2000, amount of ₹ 75,72,200/- in A.Y. 2001-02 on the basis of actual receipt. Duty Draw Back of ₹ 38,60,325/- ha not been received by the assessee till now. In view of the above no addition on this account has been made. Asstt. Commissioner of Income Tax, Circle - 13(1), New Delhi. 29. The contention of the .....

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rawback and DEPB credit. On going through the reasons recorded, as stated hereinabove, we note that in Para 2 it has been stated that the directors of the company are involved in fraudulent claim of drawback and DEPB credit by way of exporting mis-declared goods. Thus this paragraph talks about fraudulent claim of drawback and DEPB credit. In the second paragraph is the statement of facts whereby figures of the profit and loss account has been stated. It has been stated that the export sales of .....

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ck and DEPB credit. No addition on this account has been made. However the additions have been made in respect of the bogus purchases and bogus export sales and not on account of the fraudulent claim of drawback and DEPB credit and hence the same are legally unsustainable. We are of the view that though in the reasons, the issue of bogus purchases has not been specifically mentioned and the allegation is limited to the extent of fraudulent claim of drawback and DEPB, but in the facts and circums .....

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earned AR are distinguishable on facts. In those cases the additions were made which were completely different than the issue on which reopening was done. In this case the reopening has been done on the allegation of fraudulent claim of drawback and DEPB credit and this will include purchases and sales on which such claim was made. As such this contention of the assessee is rejected. 31. Now coming to the issue of the addition of ₹ 16,34,83,676/-, the Assessing Officer has made addition by .....

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). 32. Now coming to the first issue, we note from the assessment order that the Assessing Officer has held that the purchases are not genuine on the basis of the report he received from the DRI. In para 7.1 of the assessment order the AO has made a reference to the enquiry conducted by the DRI and the Sales Tax Department to the effect that these firms do not exist at the given address on the invoice and in respect of some of the concerns the sales tax number was cancelled much before the issue .....

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the supervision and control of the Central Excise Department. It was further submitted that all these movements and the quantity is recorded in the excise record maintained by the assessee company and the excise returns filed with the department. The assessee also submitted quantitative details of the sales, purchases, production, opening and closing stock. The assessee also produced the books of accounts along with central excise record in the form of RG 1 register, Form 24, AR 4, Sales/Purcha .....

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has rejected the contention of the assessee without carrying out any verification. No enquiry was conducted by the Assessing Officer. The contention of the assessee that the CBI has also given final report has also been rejected without going into the facts of the closure report. It may also be relevant to refer to the facts of the assessee s case. One of the reason for making the addition stated by the Assessing Officer is that the yield in assessee s case is 79.73% as against normal yield of 9 .....

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fficer has also not pointed out any error or defect in the excise record. Though the Assessing Officer has referred to excessive consumption in the course of manufacturing process but has not given the basis how the same has been treated excessive. In our view it was not correct on the part of the Assessing Officer to hold that purchases are not genuine without discrediting evidences brought on record by the assessee in support of its contention. As we note from the facts above, the assessee has .....

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with reference to the DRI enquiry to the effect that firms don t exist at the given address and the allegation that sales tax number stand cancelled before the issue of invoices per se can t be sufficient enough to discard the evidences and to reach a conclusion the purchases are bogus. The fact that sales tax number has been cancelled later on mean that these firms were in existence at one point of time and having sales tax number also. Further nonexistence at the given address at the time of .....

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s nor from the banks. It is a case where Assessing Officer has simply quoted DRI report in the assessment order and without making any further examination has made the addition. 34. With the assistance of learned DR as well as learned AR we have gone through the documents filed by the assessee in support of the purchases made by it. The learned DR could not point out any error or defect in these documents so as to ignore these evidences. We are of the view that in such circumstances, it cannot b .....

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in the facts and circumstance, the finding of the Assessing Officer cannot be sustained. 35. The above view get supported by the judgment of the Hon ble jurisdictional Delhi High Court in the case of CIT vs. Fair Finvest Ltd. [2013] 357 ITR 146 (Del) in ITA no. 232/2012 dated 22nd November, 2012. In this case there was an allegation against the assessee company that it has received share capital by way of accommodation entry. This allegation was based on the basis of the enquiry carried out by t .....

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had deleted the addition on the ground that the AO has failed to carry out investigation and discredit the documents filed by the assessee in support of its contention. The Hon ble High Court upheld the order of the ITAT and held as under:- 6. This Court has considered the submissions of the parties. In this case the discussion by the CIT(Appeals) would reveal that the assessee has filed documents including certified copies issued by the Registrar of Companies in relation to the share applicatio .....

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e produced material. The least that the assessing officer ought to have done was to enquire into the matter by, if necessary, invoking his powers under Section 131 summoning the share applicants or directors. No effort was made in that regard. In the absence of any such finding that the material disclosed was untrustworthy or lacked credibility the assessing officer merely concluded on the basis of enquiry report, which collected certain facts and the statements of Mr. Mahesh Garg that the incom .....

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exhausts all the evidence or material in his possession and then comes forward to merely reject the same on the presumptions. The present case falls in the latter category. Here the assessing officer, after noting the facts, merely rejected the same. 37. In the case of CIT Vs Goel Sons Golden Estate Pvt. Ltd. [ITA No. 212 of 2012 Dated 11-04-2012 Honourable Delhi High Court has upheld the deletion of addition by holding:- 3. We have examined the said contention and find that the assessee during .....

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n and deal with the matter in depth specially after the affidavit/confirmation along with the bank statements etc. were filed. In case the Assessing Officer had conducted the said enquiries and investigation probably the challenge made by the Revenue would be justified. In the absence of these inquiries and non-verification of the details at the time of assessment proceedings, the factual findings recorded by the Assessing Officer were incomplete and sparse. 38. In view of the above, we are of t .....

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purchases holding the same to be not genuine. Now the issue which arises for consideration is if the purchases are not genuine then can the sales be said to be genuine and if the sales are genuine, can entire purchases be held to be non-genuine and addition of entire purchase amount be made. 40. On the issue whether sales are not genuine, from the assessment order we note that the Assessing Officer has not tinkered with the trading account. He has also not rejected the books of accounts. The ass .....

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ssessment is to assess and determine the correct income of the assessee. The learned CIT(A) has held that taxing of entire purchases will be unjustified as it will give absurd result and accordingly he has worked out the peak amount of the payments made against the purchases. In this regard we note from the order of the learned CIT(A) that he has made a detailed chart on the basis of the copy of account of suppliers filed by the assessee before the Assessing Officer and also before the learned C .....

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s from parties which have not issued bills and such amount can be worked out by taking the peak amounts of payments made against the purchases. Accordingly, a chart has been prepared wherein details of the purchases made and payments issued by way of cheques are shown. The same is enclosed as Annexure A to this order. As per this chart, the peak amount utilized for making unaccounted purchases comes to ₹ 56,50,600/-. It is presumed that this amount was utilized for making purchases from un .....

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e basis of the copy of account of the suppliers placed in the paper book which were before the Assessing Officer as well as learned CIT(A). This chart was not filed by the assessee and that is why the learned CIT(A) has enclosed this chart as part of its order. On enquiry from the Bench whether there is any factual inaccuracy in this chart prepared by the learned CIT(A), the learned DR was fair enough to admit that there does not appear to be any factual inaccuracy so far as the peak amount of t .....

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urchases but those parties were not found in existence. 2. The appellant has shown consequential sales to various parties of such material and which in turn have shown export of such trading goods. 3. The sales of the appellant have not been disputed by the A.O. in the assessment order. 4. It is also the matter of fact that unit of the appellant is under direct supervision by the Excise Department and all inwards as well as outwards movements of goods were under the supervision of the Excise Dep .....

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of the said parties, which came back to the appellant. The A.O. has given the findings that purchases from four parties mentioned supra, are not genuine, but he has not disputed the corresponding sales made to the third parties. When genuine sales have been made, purchase must have also been made by the appellant from some other suppliers, if not made from said alleged bogus suppliers. In such a scenario taxing of entire purchases made from alleged suppliers is an absurd and impractical approac .....

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A to this order. As per this chart, the peak amount utilized for making unaccounted purchases comes to ₹ 56,50,600/-. It is presumed that this amount was utilized for making purchases from unknown parties. While working out this peak, it is presumed that cheques were credited in the account of the respective parties, which were withdrawn by way of cash. Therefore, I hold that the maximum amount which supposed to have been utilized for making purchases from third parties was ₹ 56,50,6 .....

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turing activities the appellant has declared gross profit @ 7.69% whereas in the trading activities, which has been started during the year under consideration, Gross Profit has been declared @ 1.42%. The gross profit declared in the manufacturing activities is in line with the earlier years and as such no adverse inference is taken by the A.O. However, the gross profit shown in the trading activities of machined and vehicle gears of various size, steel balls and B-S-Blind is quite low as compar .....

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% declared by the appellant in the books of accounts. I, therefore, take gross profit @ 3% on the total sales of ₹ 15,01,39,789/- made by the appellant which comes to ₹ 45,04,193/-. As discussed above, the appellant has declared Gross Profit @ 1.42% as already declared in the books of accounts. The differential amount (3% - 1.42% x 15,01,39,789/-) is taken as undisclosed income of the appellant which comes to ₹ 213,72,208/- which has not been disclosed by the appellant in the b .....

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ts are treated as undisclosed income of the appellant which comes to ₹ 80,22,802/- as against the addition of ₹ 16,34,83,686/- added by the A.O. as unexplained expenditure. 43. In our view, the learned CIT(A) was justified in drawing the above conclusion. When sales are not in dispute and it is held that purchases are not verifiable then in such circumstances, in order to determine the correct income of the assessee, the right course will be to reject the trading results and to estim .....

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ney which the assessee is receiving on account of the sale is being utilized towards purchases and assessee s profit will be the gross profit which it will be earning on sales plus investment in purchases. 44. Accordingly, in such circumstances, we are of the view that the learned CIT(A) having held that purchases are not genuine, thereafter has done the right exercise by rejecting the trading results of the assessee and estimating the profit on sales. For this purpose the learned CIT(A) has wor .....

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not genuine, on the facts and circumstances of the case as discussed hereinabove is untenable, the entire addition made on account of purchases is directed to be deleted. 45. Accordingly ground no.3 of the assessee s appeal is allowed and ground no.1 and 2 of the Revenue appeal are dismissed. 46. Ground no.4 and 5 in assessee appeal is regarding addition of ₹ 61,69,546/- sustained by the learned CIT(A). The assessee during the course of the year has made export sale of ₹ 65,87,872/-. .....

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ed by the Assessing Officer. 47. It was contended by the learned AR that the findings recorded by Assessing Officer as well as the learned CIT(A) are factually incorrect. The appellant company has made export sale of ₹ 65,87,872/- of the goods manufactured by it in its own factory. The goods so manufactured are part of the excise records which were produced before the AO during the course of the assessment hearing. The appellant company has also filed details of the export sales, purchases .....

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rt from the Central Revenue controlled laboratory and realization of the sale proceeds of the export, incentives were realized. It was further submitted that on the basis of the allegation, the DRI has formally made a complaint to the CBI and the CBI after thorough verification has held that the allegation as levied by the DRI are not sustainable. The appellant company has submitted item-wise quantitative details of the sales, purchases, production and closing stock, copy of export invoices, cop .....

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ngs, the appellant was specifically asked to produce the parties who claimed to have supplied the material but the appellant failed to ensure attendance of any such party is factually incorrect. It was submitted by the learned AR that at no stage of reassessment proceedings the appellant was ever asked to produce the parties. The observation of the learned CIT(A) in this regard are factually incorrect. It is a case where the AO has not carried out any verification or investigation and has solely .....

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any against the order passed by Custom authorities whereby the High Court has observed that the charges of mis-declaration and fraudulent availing of incentives against the appellant are based on suspicion. In this judgment the High Court has further held that in the present case the show cause notice as well as impugned order did not deal with the live consignments but pertain to earlier consignments i.e. past exports where export had already been completed and goods had already reached in the .....

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Officer was not justified in adding back the same as unexplained credit. The entire export sale having been included in the income, the only issue if at all could be regarding purchases against such export sale and Assessing Officer could not have made addition of the export sale as unexplained credit. 49. In reply the learned DRrelied upon the order of the Assessing Officer as well as learned CIT(A). It was submitted that the report of the DRI is a valid piece of evidence which has established .....

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t where the allegation apparently is that the assessee has mis-declared the goods and the value of such goods was not of that level at which the same have been declared and accordingly Assessing Officer, after allowing deduction of cost of purchases at the rate of 6.35%, he has disallowed the balance amount brought in by way of export sale as an unexplained credit. The learned CIT(A) has confirmed the action on the ground that the assessee has failed to controvert the findings. The learned CIT(A .....

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uld not controvert this fact. We also note from the assessment order that the Assessing Officer in Para 11 has simply made a reference to the report of the DRI and in Para 11.1 on the basis of such report he has made the addition. Thus the observation of the learned CIT(A) that assessee was to produce the parties is not borne out by the record. As held while deciding the ground no.3 in assessee s appeal and ground no.1 in Revenue s appeal the Assessing Officer after the assessee has filed all do .....

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etails of Duty Drawback received / receivables on Export Sales e) The books of accounts along with bills and vouchers, Central Excise records and stock register were also produced for verification. 51. The Assessing Officer thereafter did nothing. In the absence of any further verification and without discrediting the documents filed by the assessee company, we are of the view that the Assessing Officer was not justified in drawing adverse inference and making the addition. As held hereinabove t .....

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placed in the Paper Book before us, the payments of these purchases have been made from banking channel. There is no material to hold that these purchases were not genuine. Further the fact that the export was made in the preceding year cannot be ignored. The allegation in the DRI report pertains to subsequent year when one of the shipments was examined. The subsequent shipment cannot be a basis for holding that the shipments made earlier were sub-standard. Each of the shipment is physically ve .....

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