TMI Blog2017 (2) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... he next financial year 2001-02 the assessee has declared total export turnover at ₹ 32,71,097/- upon which gross profit of ₹ 18,01,075/- is shown thereby giving a GP Rate of 55%. On perusal of the return filed for the assessment year 2003-04 i.e. financial year 2002-03, it is seen that the assessee has declared Nil export and has declared income from salary as was done previously before he started his export business. It appears that this is an isolated case of export by the assessee in past several years. In view of the above facts, it is clear that the assessee had done the business of export mainly for one fyear i.e. for the fyear under consideration. It is not understood as to how there was such a huge export turnover in one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f unexplained expenditure under Section 69C made by the Assessing Officer? (ii) Whether in the facts and circumstances of the case, the ITAT has not acted perversely and illegally in coming to the conclusion that the rejection of the books under Section 145(3) of the Act by the Assessing Officer as unjustified? 3. The facts of the case are that the return of income for the assessment year 2001-02 was filed by the assessee on 31.10.2001 declaring a total income of ₹ 22,80,360/-. The case was selected for scrutiny u/s. 143(3) by issue of notice u/s. 143(2) on 21.10.2002. A fresh notice 142(2) dated 07.07.2003 was issued to the assessee on change in the office of the incumbent. Books of accounts consisting of cash book, ledge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly there was no business of export in any of the years. This shows that this is not the regular business of the assessee. 4. Counsel for the appellant has contended that the identical issue was decided by the Court in the case of Commissioner of Income Tax vs. M/s. Bright Future Gems in DB Income Tax Appeal No.305/2008, decided on 02.11.2016 more particularly in para 5.1 to para 10 which reads as under: 5.1 He also relied on Commissioner Of Income-Tax vs M/S. La Medica, Delhi, 250 ITR 575 wherein it has been held as under:- The fact that the alleged sellers have been found to be persons with no means to effect purchases or to carry on business is a factor which does not appear to have been considered by the Tribunal in its proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed knew that the whole thing was a fictitious arrangement. Once it is accepted that the supplies were not made by Kalpana Enterprises to whom payments were alleged to have been made, the question whether the purchases were made from some other source ougth not to have weighed with the Tribunal as a factor in favor of the assessed. The conclusions of the Tribunal are, therefore, clearly erroneous, contrary to materials on record and have been arrived at without taking into consideration relevant material and placing reliance on irrelevant materials. It is to be noted that assessed's stand was not that it had effected purchases from anybody else. Its stand throughout was that it had effected purchases from M/s Kalpana Enterprises. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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