TMI Blog2017 (6) TMI 955X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the said firm. The Tribunal, however, noted that such sales were later on reconciled. If that be so, in our opinion, there was no other basis for the Tribunal to confirm the premium on such sales. We may recall that M/s.Jhaveri Polymers was not one of the firms, who was mentioned in the documents seized by the revenue on which Shri J.L.Mehta had made his remarks. In the result, the question is answered partly in favour of the assessee and partly in favour of the revenue. Insofar as the sale of ₹ 11.61 Lacs made to M/s.Jhaveri Polymers is concerned, premium paid at the rate of 27.5% would be deleted from the additions made by the Assessing Officer and confirmed by the Tribunal. Remaining additions are confirmed. - TAX APPEAL NO. 398 of 2007 - - - Dated:- 15-6-2017 - MR. AKIL KURESHI, AND MR. BIREN VAISHNAV, JJ. For The Appellant : Mr BD Karia, Advocate with MR Darshan Patel, Advocate with Mr RK Patel, Advocate For The Opponent : Mr KM Parikh, Advocate ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. This appeal is filed by the assessee calling in question the judgment of the Income Tax Appellate Tribunal dated 8.9.2006. Tax Appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the handwriting of Mr.J.L.Mehta Amount O/s. Since Arihant Thermowares P. Ltd. 1,37,500 5,00,000 March, 92 Anup Plastic 94000 3,45,446 March, 92 Fozdar Industries 39000 1,42,612 March, 92 Flovin Plastic 34000 1,26,608 Sept. 92 Hi-tech Plastic 18000 68359 March, 92 Plas Colour 77000 2,79,155 March, 92 R.M.P.Plastic Pact 2,37,000 12,00,000 March, 92 6,65,000 Rs.27,69,970 50% 3,32,750 6. The Assessing Officer was of the opinion that it was this amount of ₹ 6.65 Lacs when divided by two would come to ₹ 3.32 Lacs, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t would have been received. 8. On such premises, the Assessing Officer issued a show cause notice to the assessee and confronted the firm with adverse materials. Shri Jagdish Mehta filed a reply admitting his handwritings on the loose papers but claimed that this did not reflect any cash receipts. Regarding the pay-in-slips of the bank account of M/s.Devidayal Plastics being found from the office of the firm, he clarified that, that may have been done by the mutual consent of the employees of two concerns. He asked for cross-examination of Shri Balkrishna Devidayal. 9. The Assessing Officer considered the materials on record. He found that though summons was issued to Shri Balkrishna Devidayal, he did not remain present on the appointed date. He did not accept the assessee's explanation that the notings made by Shri Jagdish Mehta did not reflect the cash receipts of the firm. He also held that the sales of ₹ 71.15 Lacs purportedly made to M/s.Devidayal Plastics also would have such premium component. He accordingly added an income of ₹ 31.69 Lacs at the rate of 27.5% premium on the total amount of ₹ 1.15 Crores which he had come to compute as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same period of time. There was no material to show this. 12. With respect to transactions with Ms/.Devidayal Plastics, the Tribunal though confirmed the ultimate conclusion of the Assessing Officer, took a slightly different route. The Tribunal did not hold that the cash deposited in the bank account of M/s.Devidayal Plastics were made by the assessee, which reflected the assessee's sale outside the books. The Tribunal referred to a remand report during which the crossexamination of Shri Balkrishna Devidayal was carried out but noted that nothing contrary to his initial statement had come out through such cross-examination. The Tribunal held that the sales were made to M/s.Devidayal Plastics but they were not reflected in their books and, therefore, confirmed the premium against such sales also. 13. With respect to M/s.Jhaveri Polymers concerning total sale of ₹ 11.61 Lacs, on which also the Assessing Officer had calculated premium of 27.5% on the ground that the sales were not reflected in the said agency, the Tribunal observed that such sales were reconciled but the premium so received has not been shown in the books of accounts. 14. It is against this judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer thus concluded that the total of ₹ 6.65 Lacs against the total sale of ₹ 26.75 Lacs was to be received in cash. Shri J.L.Mehta neither in his statement nor in his written reply before the Assessing Officer offered any convincing explanation. He merely admitted that the entries were in his own handwriting. His rather vague and general explanation was that the sales were shown in cash to differentiate from on-account sales, where payments would be made later. At a later point of time he changed this theory somewhat and suggested that the bills were not raised, though required and, therefore, the firm had lost sizable amount. He had calculated such amount at the rate of 27.5% per annum and indicated the figure so that the same can be recovered from the errant employees. It has also come on record that none of these sales were reflected in the accounts of recipient agencies. 19. With respect to M/s. Devidayal Plastics material on record suggested that the pay-in-slips of the bank account of the said firm were found from the office of the assessee firm. The statements of Shri Balkrishna Devidayal confirmed that the amounts were deposited by Shri J.K.Shah, Accountant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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