Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Mega Star Wood Pvt. Ltd. Versus ITO 5 (2) -3, Mumbai

2016 (6) TMI 1078 - ITAT MUMBAI

GP addition on the unrecorded purchases - Held that:- We find that the purchase details from its sister concerns M/s Maklai Timber Mart on 31-03-2007 amounting to ₹ 17,38,951/- while the bank loan vide OD of ₹ 18 lakhs was transferred to the sister concern on 28th September, 2006 which has been claimed as against the purchases made on the last day of March, 2007 and in support the assessee company has filed copies of delivery challans which are not signed by any person. The assessee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ppellate proceedings before the learned CIT(A) , whereas directions were given by the learned CIT(A) to the A.O. to add some GP on the unrecorded purchases on the grounds that the assessee company might have earned profit by selling the purchases out of books. In our considered view, interest of justice will be best served if all the issue of additions made by the A.O. are to be set aside to the file of the AO for de novo determination of all the issues on merit after taking into account the rel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

7479/Mum/2010 - Dated:- 3-6-2016 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : None For The Revenue : Shri Chandrajit Singh(D.R.) ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the assessee company, being ITA No. 7479/Mum/2010, is directed against the appellate order dated 27-09-2010 passed by learned Commissioner of Income Tax (Appeals)- 9, Mumbai (hereinafter called the CIT(A) ), for the assessment year 2007-08, the appellate .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

firming the additions made by the learned Assessing Officer. 2. The learned Commissioner of Income Tax (Appeals) erred in confirming the additions without considering the same on merits. 3. The learned Commissioner of Income Tax (Appeals) erred in confirming the addition of ₹ 1,51,974/- by way of disallowance of interest. 4. The learned Commissioner of Income Tax (Appeals) erred in confirming the addition of ₹ 11,62,184/- as unexplained purchases. 5. The learned Commissioner of Incom .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

when the appeal was called for hearing on earlier occasions. Therefore, we proceed to dispose of this appeal after hearing the learned D.R.. 4. The brief facts of the case are that the assessee company is dealer in timber and plywood. The assessee company has shown purchases of ₹ 55,59,306/- and sales of ₹ 33,88,002/- , while the net profit of ₹ 54,626/- was declared in the P&L account for the previous year relevant to the assessment year under consideration. As per the de .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

which has occurred as the miscellaneous purchases should be ₹ 28,29,668/- instead of ₹ 38,05,716/-. The assessee company furnished the following details:- (a) Ambika Timber Mart ₹ 5,93,392/- (b) Other Misc. purchases ₹ 4,36,276/- (c) Maklai Timber Mart ₹ 18,00,000/- The assessee company, hence, submitted that earlier there was a typing error while submitting the details and the total purchases made was ₹ 55,59,306 only and not ₹ 67,21,490/- as shown in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eedings following purchases were made by the assessee company in the month of March, 2007 which were as follows:- a) Ambika Timber Mart ₹ 5,93,392/- b) Ace Traders ₹ 2,63,175/- c) Maklai Timber Mart ₹ 17,38,952/- d) Ply Teak Traders ₹ 1,82,212/- Total ₹ 27,77,731/- In view of the above details, the contention of the assessee company that there was a typing error in reporting the figures of sundry creditors was not accepted by the A.O. . The A.O. also observed from t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in the list of sundry creditors filed on 8th October, 2009. On going through the copy of VAT return for the financial year 2006- 07 filed by the assessee company, the total purchases were shown at ₹ 8,58,419/- for the quarter from 1.1.2007 to 31.3.2007 as against purchases of ₹ 27,77,731/- made in the month of March, 2007. Thus, it was observed by the A.O. that the assessee company has furnished incorrect details of purchases and tried to justify it in the name of typing error and in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t was seen by the A.O. from the details filed that the assessee company obtained OD facility from Saraswat Co.Op. Bank which commenced on 28th September, 2006 and the amount of ₹ 18,00,000/- was transferred to the sister concern of the assessee company i.e. M/s Maklai Timber Mart on 28th September, 2006 directly and the CC limit of the said firm Maklai Timber Mart was closed. It was observed by the AO from the ledger account that the assessee company has made purchases from Ms/ Maklai Timb .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ess of the assessee company. In reply, the assessee company submitted that the payment has been made to the Maklai Timber Mart on 28th September, 2006 by the assessee company and the copies of delivery challan against the goods supplied by Maklai Timber Mart were submitted. The assessee company submitted that M/s Maklai Timber Mart delivered the goods to the assessee company and the assessee company sold it to the customers and since the delivery of the goods continues till February, 2007, the b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Maklai Timber Mart only on 31st March, 2007 which means that the funds were used by the M/s Maklai Timber Mart to close its cash credit limit and not for the business of the assessee company which was clearly mentioned in the sanction letter of the bank. In view of this, the A.O. disallowed the interest of ₹ 1,51,974/- and added the same to the total income of the assessee company , vide assessment orders dated 21.12.2009 passed by the AO u/s 143(3) of the Act. 5.Aggrieved by the assessmen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e aggregate of purchases made by the assessee company. However, the A.O. made an addition of ₹ 11,62,184/- as unexplained purchases being the difference between the two figures i.e. the purchases in the P&L account and another is aggregate of purchases as per the statement given by the assessee company during assessment proceedings. The explanations regarding the error committed by the assessee company has been duly explained but still the addition has been made was the contention of t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

.O. disallowed the difference in purchase of ₹ 11,62,184/- which were made out of books because the purchases disclosed do not tally with the purchases claimed. Names of certain parties from whom the purchases were claimed, but their names were not effected in the list of sundry creditors and the assessee company is trying to explain it as a typing mistake. No stock register and quantitative details were maintained and as such it is not possible to verify the quantitative differences. The .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in fact no material were purchased from February 2007 to March 2007. Thus, the learned CIT(A) directed the A.O. to examine the affairs of this concern M/s Maklai Timber Mart for the assessment years 2006-07 & 2007-08 and in case if any irregularity is found, action should be taken against both the concerns. It was also directed by the learned CIT(A) to the A.O. to add G.P. on the unrecorded purchases because some profit might have been earned by the assessee company by selling these purchas .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

learned CIT(A) upheld the assessment order dated 21-12-2009 passed by the A.O. u/s 143(3) of the Act, vide appellate orders of the learned CIT(A) dated 27-09-2010. 7. Aggrieved by the appellate orders dated 27-09-2010 of the learned CIT(A), the assessee company is in second appeal before the Tribunal. 8. The learned D.R. strongly supported the appellate orders of the learned CIT(A) while he fairly admitted that no notice was served on the assessee company before enhancing the assessment by the l .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

March, 2007 submitted to the Saraswat bank wherein the purchases of timber/plywood made by the assessee company in March, 2007 were to the extent of ₹ 15,33,241/- while as per ledger account verification the purchases made by the assessee company in March, 2007 were different i.e. ₹ 27,77,331/-. We find that the purchase details from its sister concerns M/s Maklai Timber Mart on 31-03-2007 amounting to ₹ 17,38,951/- while the bank loan vide OD of ₹ 18 lakhs was transferr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version