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Shri Vipulkumar K Bhalala Versus ITO Ward 22 (3) (4) , Navi Mumbai

2015 (11) TMI 60 - ITAT MUMBAI

Disallowance of purchases - whether no business could be carried out without effecting purchases? - Held that:- Assessee has failed to produce the details as well bills/invoices for purchases for verification before the authorities below rather the assessee has admitted before the authorities below that it has no details/invoices of such purchases as the same were purchase from grey market. The assessee has claimed as revenue expenditure to be set off against business income in the Return of inc .....

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he assessee prove by cogent evidence’s that the expenses are incurred wholly and exclusively for the purpose of business or profession carried on by the assessee . Since , the assessee could not produce any cogent material even before us to establish that the said expenditure is neither capital expenditure nor personal expenses of the assessee and is incurred wholly and exclusively for the purpose of business or profession carried on by the assessee , we find no error or illegality in the orders .....

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from close relatives as per confirmations at pages 31 to 33 of paper book submitted before us . The CIT(A) called for the remand report from the assessing officer which was submitted by the assessing officer vide remand report dated 02nd August 2013. However, the orders of authorities below does not contain any discussions about these loan confirmations and about satisfaction that ingredients of Section 68 of the Act are complied with. These loan confirmations of ₹ 1,95,000.00 filed by the .....

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the first appellate proceedings and the assessee is directed to appear before the assessing officer to satisfy that all the ingredients of the section 68 of the Act are duly complied with by the assessee about the identity, creditworthiness and genuineness of these loan transaction. - Decided in favour of assessee by way of remand. - ITA NO 1899/Mum/2014 - Dated:- 28-9-2015 - SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : Smt. Hiral Sejpa .....

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on account of purchases for the purpose of the Appellant's business by completely regarding the basic fact that no business could be carried out without effecting purchases. 2. The Appellant therefore prays that the purchases made for the purpose of the business be allowed and the addition of ₹ 3,35,134 be ordered to be deleted from thee Appellant's total income. Ground II. 1. On the facts of the case and circumstances and in law, the learned CIT(A) erred in confirming the addition .....

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e loan from relatives be treated as genuine and the addition of ₹ 2,14,000 be deleted." . 2. The facts of the case in brief are that assessee is a software engineer and doing work for Zee Entertainment Enterprise Ltd. During assessment proceedings , the assessing officer observed that assessee has debited purchase of ₹ 3,35,134/- in the Profit & Loss Account. The assessee was asked to explain these purchases along with proof thereof. The assessee submitted that no proof and .....

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ceipt of ₹ 18,62,800/- which worked out to net profit of 52.62% of turnover whereas generally in the case of professional receipts, the maximum percentage of net profit will be around 25% or so. The assessee submitted that it had made sundry purchases of ₹ 3,35,134/- on ready cash payment from grey market at Lamington Road, Mumbai. Since the purchases are made for small amounts and not from the established dealer, the assessee could not get the bills but the purchases are genuine. 4. .....

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low but invoices for the purchases were not filed before the authorities below. The assessee submitted that the assessing officer has not even considered payments for purchases aggregating to ₹ 61134/- which are made through the banking channel by the asseessee and the same are also been disallowed by the assessing officer and confirmed by the CIT(A). 6. The Ld. DR relied upon the orders of authorities below. 7. We have considered the rival submissions and perused the relevant material on .....

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he primary and initial onus is on the assessee to prove that the said expenses(not being capital expenditure or personal expenses of the assessee) of ₹ 3,35,134/- are genuine and the same are incurred or laid out wholly and exclusively for the purpose of the business or profession carried on by the assessee. Merely saying that the purchase of ₹ 61134/- out of total purchases of ₹ 3,35,134/- are incurred through banking channels is not sufficient until the assessee prove by coge .....

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and the same are hereby upheld and the contentions of the assessee are hereby rejected . Thus, the addition of ₹ 3,35,134/- made by the assessing officer and as confirmed by the CIT(A) is hereby confirmed. We order accordingly. 8. The ground II raised by the assessee in the memo of appeal filed relates to friendly loans aggregating to ₹ 2,14,000/- raised by the assessee from three relatives. During assessment proceedings, the assessee was asked by the assessing officer to submit pro .....

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oans from friends and relatives for taxation as additional income. Since the assessee could not produce any proof of loans nor produced parties for verification and further the assessee offered the same as additional income, the claim of the loan of ₹ 2,14,000/- was not accepted by the assessing officer and was added to the income of the assessee in the assessment order dated 16th December 2010 passed by the assessing officer u/s 143(3) of the Act. 9. Aggrieved, the assessee carried the ma .....

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s in appeal before us and reiterated its submissions and stated that these loans were taken from close relatives and he has submitted the information such as confirmation letters before the CIT(A) and the assessing office while the same has not been taken on record by both the authorities below. 12. Ld. DR relied upon the order of authorities below. 13. We have considered the rival submissions and carefully considered the relevant material on record. The assessee has claimed that he filed the lo .....

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