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2016 (7) TMI 917 - GUJARAT HIGH COURT

2016 (7) TMI 917 - GUJARAT HIGH COURT - TMI - Addition on suppression of sales - Held that:- From the evidence on record, it surfaces that two Sales Bill No.77 dated 13.03.1997 for ₹ 6,79,840/- and Bill No.81 dated 20.03.1997 for ₹ 9,33,632/- showing sale of yarn and again two sales Bill No.77 and 81 dated 04.03.1997 for ₹ 4,58,902/- and ₹ 4,59,260/- totalling to ₹ 9,18,162/- were raised showing sale of cotton. In paragraph 9 as referred herein above, the CIT (Appea .....

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rder dated 19.05.2006 of the Income Tax Appellate Tribunal, Ahmedabad Bench in ITA No.2729/Ahd/2000. 2. While admitting the matter on 11.05.2007, the following substantial question of law was framed by the Court for consideration :- Whether on the facts and in the circumstances of the case, Income Tax Appellate Tribunal was right in law in confirming the addition of ₹ 6,95,310/- made by the Assessing Officer as suppression of sales? 3. The facts giving rise to filing of this Appeal are as .....

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ll discount register of the Bank showed that bills were drawn on Achal Textile Industries Pvt. Ltd. (hereinafter referred to in short as 'ATPL') being Bill No.77 dated 13.03.1997 for ₹ 6,79,840/- and Bill No.81 dated 20.03.1997 for ₹ 9,33,632/- showing sale of yarn to ATPL were discounted. On the other hand, the sales register maintained by the appellant showed sale of cotton to Ashoka Spintex (hereinafter referred to in short as AS ) vide sales Bill No.77 and 81 dated 04.03. .....

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ing higher finance. Therefore, the respondent made an addition of ₹ 6,95,310/- as suppressed sales in respect of the difference between the sales of ₹ 16,13,472/- to AS and ₹ 9,18,162/- as sales to ATPL. Being aggrieved by the order of assessment, the appellant preferred an appeal before the CIT(A)- I, Ahmedabad who vide order dated 12.10.2000 deleted the impugned addition for the reasons stated in para 9 of the order. The CIT(A) has given a clear finding that the perusal of bo .....

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order passed by CIT(A) on the ground that the partial acceptance of the money had been received by the appellant and credited in its books of accounts so that they could not be said to be accommodation bills; two bills bearing same serial number were issued to ATPL. Being aggrieved by the aforesaid order of the Appellate Tribunal, the above Appeal has been preferred by the appellant. 4. Learned Counsel for the appellant Mr. S.N. Divatia has contended that the Tribunal has committed an error in d .....

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0/- and ₹ 9,33,632/- showing sale of YARN to ATIPL. 3. Sale to ASL as in (1) was recorded in books but that to ATIPL as in (2) was not recorded in books. 4. The appellant had no yarn as opening stock nor any purchase of yarn was made during the year. 5. The appellant had discounted the bills dated 13/3/97 and 20/3/97 in the name of ATIPL, a sister concern. 6. The appellant paid ₹ 6,63,799/- on 14/3/97 to ATIPL and ₹ 9,15,085/- on 21/3/97 to Saurashtra Ginning in the course of b .....

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of YARN was not recorded in ATIPL's books. 9. From the perusal of books of ATIPL, I find that they had purchased 3000 kgs. of yarns from ASL for ₹ 3,15,157/- on 20.8.96 and that they had not purchased any YARN from the appellant. 10. I find that the G.P. in yarn and cotton was 2.11% and 2.74% in A.Y. 95-96, 5.00% and 4.19% in A.Y. 96-97. In A.Y. 97-98, there was sale of cotton only where G.P. is 2.70%. Thus, the G.P. has been found varying very wildly from year to year. 11. The books .....

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d to ATIPL, a sister concern, as accommodation bill only, discounting them with bank for obtaining funds. 9.1. In view of the above findings, I hold that the appellant had not made any sale of YARN to ATIPL on 13/3/97 and 20/3/97. As such, the addition of ₹ 6,95,310/- being difference of ₹ 16,13,472/- (alleged sale to ATIPL) and ₹ 9,18,163/- (genuine sale made to ASL), is deleted. There will be relief of ₹ 6,95,310/-. Learned Counsel for the appellant has relied on the de .....

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