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Mukesh Ashmal Bokadia Versus The Income-tax Officer, Ward – 2 (4) , Ahmedabad

Addition u/s 68 - Assessing Officer made additions by invoking the provisions of Section 69C - Held that:- From the perusal of assessment order, it is clear that Assessing Officer has allowed purchases to the tune of ₹ 1,15,84,527/-, which were paid to various parties from whom assessee made purchases during the year. After the payment of ₹ 1,15,84,527/- outstanding balance remained to be paid on 31st March, 2007, which means that Assessing Officer has treated all these parties as ge .....

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as submitted the ledger account of all the 11 parties for the relevant assessment year as well as for the next financial year during which balance payment of the outstanding liabilities were made through bank. Here, we can take example of one of the parties amongst the list of 11 parties in the name of M/s. Landmark Engineering from whom assessee made purchases during the year. Outstanding liability in the name of this party on 31.03.2007 stood at ₹ 53,19,523/- and this outstanding amount .....

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orking has been made by the Assessing Officer to treat a particular purchase from a supplier as bogus purchase and further the outstanding purchases at the end of the year have been subsequently paid by banking channel and nothing contrary to this fact of payment by banking channel has been brought on record before us. In this situation, it is not justified on the part of Assessing Officer to treat the sundry creditors outstanding at the end of the year as unexplained and accordingly, the additi .....

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.Y. 2007- 08 was completed u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as the Act ) by ITO, Ward 2(4), Ahmedabad on 22.12.2009. The assessee has raised the following grounds :- 1. That on the facts and in the circumstances of the case, the assessment order passed by ld.AO was bad in law and therefore, the ld. CIT(A) did not justify in sustaining the same. The appellant appeals for cancelling the assessment order. 2. That without any prejudice to the aforesaid ground of appeal, .....

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case in correct perspective, the ld. CIT(A) applied the provisions of s.68 of the I.T. Act, 1961 to the appellant s case and thereby sustained the addition to the extent of ₹ 3,10,40,816/- and, therefore, the addition so sustained is bad in law. The appellant appeals for deletion of the sustained addition of ₹ 3,10,40,816/-. 4. That without any prejudice to the aforesaid grounds of appeal, the appellant appeals that on the facts and in the circumstances of the case, the ld. AO gross .....

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g the source for payment of the purchases, the ld. AO grossly erred in applying the provisions of s.69C. The appellant very humbly submits that although the ld. CIT(A) was correct in observing that the provisions of s.69C were not applicable to the appellant s case yet he grossly erred in applying the provisions of s.68 to the appellant s case and thereby in sustaining the addition to the extent of ₹ 3,10,40,816/-. The appellant appeals that reason for the erroneous application of s.68 by .....

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s shown to have been made and genuineness of the transactions carried out with all the parties , in the para no.6.p. at the pg.no.5 of the assessment order. While so observing the ld. AO failed to appreciate the following relevant facts of the case - (a) that the appellant had purchased goods from eleven parties as back as in the financial year 2006-07 and after lapse of about three years on 14/10/2009 the AO sent letters u/s 133(6) to ten of them at the addresses informed by the appellant. Furt .....

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t appellant had furnished the addresses which were available with him (on the bills received in the F.Y. 2006-07) and since long back he had not been having any transaction with the aforesaid parties. (b) that the ld. AO failed to appreciate the facts that the purchases were supported by purchase bills (termed as tax invoices) each of which was bearing VAT (value added tax) registration no. & date of registration and also showing the fact that VAT @ 4% of the amount of goods was charged ther .....

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be purchases of goods during the year under consideration, there were purchases of goods of ₹ 4,50,40,750.37 which included the purchases made from the aforesaid parties (creditors for goods). Further, the audited trading a/c and the books of a/cs showed purchases of ₹ 4,50,40,750.37. In view of these facts coupled with the facts stated in sub-para nos.(a) and (b) hereinabove, the ld. AO didn t have any valid reason for observing that the assessee failed to prove identity of the par .....

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harging interest u/s 234B & 234C of the I.T. Act, 1961 and the ld. CIT(A) did not justify in sustaining the same. 7. The appellant craves opportunity for furnishing any other grounds of appeal on or before the date of appeal hearing. 2. Assessee has raised seven grounds of appeal, out of which, ground nos.1 to 5 relate to the addition of ₹ 3,10,40,816/- sustained by the CIT(A) applying the provisions of Section 68 of the Act whereas Assessing Officer made additions by invoking the prov .....

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4,46,60,566/-, gross profit at ₹ 5,64,828/- and net profit at ₹ 2,94,202/-. Assessee s books of account are audited u/s.44AB of the Income Tax Act and quantitative details have been maintained by the assessee. On going through the balance sheet of assessee s business concern M/s. Manak Steel, Assessing Officer came through the list of sundry creditors having 11 names totaling to ₹ 3,34,56,223/-. In absence of confirmation letters from the alleged sundry creditors, Assessing Of .....

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al before the CIT(A) and submitted details of ledger accounts with addresses of all the 11 parties. However CIT(A) gave relief to the assessee to the extent of ₹ 24,15,407/- relating to credit balance appearing in the name of one of the 11 parties named as M/s. K.S.B. Enterprise and sustained the remaining addition of ₹ 3,10,40,816/- made by the Assessing Officer. 5. Aggrieved assessee is now in appeal before the Tribunal. However, Revenue has not filed any Cross Objection against th .....

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le in this case because Section 69C covers expenses not recorded in the books and the addition in respect of bogus expenses could be made u/s.37(1) of the Act. However, CIT(A) deemed fit to apply Section 68 of the Act for a unexplained credits. 5.2 On other hand, ld. D.R. supported the orders of lower authorities. 6. We have heard the rival contentions and gone through the facts and circumstances of the case. In the year under appeal, assessee has shown total turnover of ₹ 4,46,60,566/- an .....

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Rs.26,35,504/- 6. Kehna Corporation ₹ 3,02,100/- 7. Shakshi Traders Rs.14,02,200/- 8. Nira Traders Rs.26,91,387/- 9. Chirag Metal & Alloys Rs.37,19,115/- 10. Landmark Engineering Rs.53,19,523/- 11. Mahendra Metal Co. Rs.58,53,967/- Total Rs.3,34,56,223/- 6.1 During course of assessment proceedings, on the basis of addresses provided by assessee, Assessing Officer sent letters u/s.133(6) of the Act to the above said parties on 14.10.2009. But, in reply to the letters u/s.133(6) of the A .....

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r remand report was called for from the Assessing Officer and the same was furnished on 15.02.2012 and after examining the same, CIT(A) accepted the sundry creditor of ₹ 24,15,407/- as genuine appearing in the name of M/s. K.S.B. Enterprise and confirmed the balance addition of ₹ 3,10,40,816/-. 6.2 From the perusal of facts on record, it can be seen that out of total purchases made by the assessee amounting to ₹ 4,50,40,750/- purchases of ₹ 18,56,599/- were from three oth .....

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ent order, it is clear that Assessing Officer has allowed purchases to the tune of ₹ 1,15,84,527/-, which were paid to various parties from whom assessee made purchases during the year. After the payment of ₹ 1,15,84,527/- outstanding balance remained to be paid on 31st March, 2007, which means that Assessing Officer has treated all these parties as genuine suppliers to whom some payments have been made during the year. If in any case, Assessing Officer had come to a conclusion that .....

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hich balance payment of the outstanding liabilities were made through bank. Here, we can take example of one of the parties amongst the list of 11 parties in the name of M/s. Landmark Engineering from whom assessee made purchases during the year. Outstanding liability in the name of this party on 31.03.2007 stood at ₹ 53,19,523/- and this outstanding amount repaid in full by the assessee during the financial year 2007-08. As submitted by ld. A.R. that in case of other parties also the outs .....

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