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2016 (2) TMI 607

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..... tc. which sufficiently discharged the burden cast on the Assessee. The ITAT also found that the Assessee had provided the necessary information for the AO to make the requisite enquiries from M/s Smridhi Sponge Limited as well as M/s Galaxy Exports Pvt. Ltd. In our view, no interference with the order of the ITAT is called for under Section 260A of the Act since the findings of the ITAT are essentially factual. Further, we find no infirmity with the findings returned by the ITAT and in any event the same cannot be held to be perverse by any stretch. - Decided against revenue - ITA No. 116/2016, ITA No. 917/2015, ITA No. 74/2016 - - - Dated:- 10-2-2016 - S. Muralidhar And Vibhu Bakhru, JJ. For the Petitioner : Mr Ashok K. Manchanda, Senior Standing Counsel with Ms Vibhooti Malhotra, Junior Standing Counsel and Mr Aamir Aziz, Adv For the Respondent : Mr Pranjal Srivastava, Adv JUDGMENT CM No.3683/2016 (for condonation of delay in filing) CM No.3685/2016 (for condonation of delay in re-filing) in ITA 116/2016 CM No.1251/2016 (for condonation of delay in filing) CM No.1253/2016 (for condonation of delay in re-filing) in ITA 74/2016 1. For the reasons sta .....

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..... ₹ 1,46,690/-. The Assessee further requested that same be treated as a return in response to the notice under Section 148. 7. The Assessee was called upon to explain the documents seized. The Assessee responded by stating that it had no transaction with M/s Smridhi Sponge Limited and the documents did not pertain to it. The Assessee also filed an affidavit to that effect. According to the Assessee, the said document pertained to some other person who had perhaps used the Assessee's computer. Nonetheless, in order to discharge its onus, the Assessee conducted a search from the Registrar of Companies as well as the official site of the Income Tax Department and submitted the details of M/s Smridhi Sponge Limited as well as the names of its Directors. The Assessing Officer (hereafter 'AO') issued a notice under Section 133(6) of the Act at the registered office of M/s Smridhi Sponge Limited calling upon the said concern to furnish a copy of Ledger Account of the transactions entered into with the Assessee. This notice was received back unserved with the remarks 'Left'. The AO deciphered the relevant document concerned to be a statement of account and on t .....

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..... dates of hearing but was sought to be produced on a much later date on 13th January, 2013. The CIT(A) further held that the AO was justified in drawing a presumption under Section 292C of the Act in respect of loose documents found during the survey. The CIT(A) concurred with the AO that the Assessee had not discharged its burden to rebut the presumption that the documents found during the survey belonged to the Assessee. 10. However, the CIT(A) did not concur with the AO.s computation of undisclosed income. Whilst the CIT(A) upheld the computation of gross profit as computed by the AO (at ₹ 20,60,108/-), the additions made on account of entire sales were scaled down to the notional working capital required for making the quantum of alleged undisclosed sales, which was computed at ₹ 99,73,187/-. Thus, CIT(A) reduced the amount of undisclosed income for AY 2007-08 to ₹ 1,20,33,295/- being the aggregate sum of gross profit and working capital. Similarly, the CIT(A) reduced the addition made by the AO in respect of the AY 2008-09;. the CIT(A) accepted the addition of ₹ 14,33,880/- on account of profit but restricted further addition to ₹ 69,41,555/-, .....

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..... i Sponge Limited which was a thriving company. 14. Insofar as the provisions of Section 292C of the Act are concerned, the ITAT held that Section 292C provides that where a document is found in possession of a person during search or survey, a presumption can be drawn that it belongs to such person, however, the said presumption is rebuttable and the Assessee can rebut the same. The ITAT noted that in the given facts, the Assessee had asserted that it did not have any dealing with M/s Smridhi Sponge Limited and had filed an affidavit to that effect. Further, in order to rebut the presumption, the Assessee had provided all necessary details for the AO to make the necessary enquiries. The Assessee had also produced the final accounts of M/s Smridhi Sponge Limited from official sites which did not indicate that the Assessee had any dealing with M/s Smridhi Sponge Limited. The ITAT also noted that the seized documents indicated its dealings with 'Galaxy' and the Assessee on its part had provided evidence to show that the cheques disclosed in the document had been encashed from the bank account of one Galaxy Exports Pvt. Ltd. Further, the Assessee had also provided details of .....

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..... er Section 132 or survey under Section 133A of the Act, it may be presumed that such books or documents belong to such person. Undisputedly, such presumption is rebuttable. It is not disputed that the Assessee had clearly denied having any dealing with M/s Smridhi Sponge Limited and had also filed an affidavit to that effect. The ITAT found, as a matter of fact, that the Assessee on its part had made the necessary enquiries and also provided final accounts of M/s Smridhi Sponge Limited; confirmation from the Director of M/s Smridhi Sponge Limited; details of the bank accounts; final accounts; Director's Report; PAN Number etc. which sufficiently discharged the burden cast on the Assessee. The ITAT also found that the Assessee had provided the necessary information for the AO to make the requisite enquiries from M/s Smridhi Sponge Limited as well as M/s Galaxy Exports Pvt. Ltd. In our view, no interference with the order of the ITAT is called for under Section 260A of the Act since the findings of the ITAT are essentially factual. Further, we find no infirmity with the findings returned by the ITAT and in any event the same cannot be held to be perverse by any stretch. 18. In .....

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