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TMI Blog2017 (10) TMI 1247X X X X Extracts X X X X X X X X Extracts X X X X ..... sue, learned Counsel of the assessee did not elaborate and did not make any cogent submission. Accordingly, this ground is dismissed. 4. Next common ground raised is that learned CIT(A) erred in confirming the addition on alleged bogus purchase at the rate of 12.5% of the bogus purchases. 5. On this issue, the A.O. has received Information from DGlT(lnv.)Mumbai through the office of CIT-5, Mumbai that the assessee has taken the accommodation entries from the foliowing hawala entities. A.Y.2009-10 Sr. No. Name of the Bogus Party PAN Amount (Rs.) 1 Sagar Enterprises ACTPS9740C 2,28,486 2 Ambika Enterprises AFFPB5446R 87,329 3 Aayush Enterprises AGQPP38G7N 22,78,125 4 Vaibhav Sales Corpn. AUEPS3213R 90;955 Total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee's appeal, the learned CIT(A) referred to the decision of the Hon'ble Gujarat High Court in the case of Simit P.Seth (356 ITR 451). The learned CIT(A) concluded as under:- "In the instant case, the appellant has failed to produce any independent evidence to prove the purchases like transport bills, delivery challans etc. either during assessment proceedings or during appellate proceedings. With regard to the information received from DIT(lnv.), Mumbai the summary of the communication was already passed on to the appellant while communicating reasons for reopening. Even though the AO could not prove substantively that the amounts given to the sellers in cheque form have come back to the appellant, the activities of accommodation entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in IT Appeal No.240 of 2003 in the case of N.K.Industry v. DCIT in order dated 20.06.2016 wherein 100% of the bogus purchases has been held to be added in the hands of the assessee and Tribunal's restriction of addition to 25% of the bogus purchases was set aside. The Special Leave Petition against this order has been dismissed by the Hon'ble Apex Court by order dated 16.01.2017. 10. However, I find that it may not be appropriate in this case to take away the relief that has been granted by the Assessing Officer. Hence, in these circumstances, I find that it is clear that the assessee has made the purchases from grey market and purchases from grey market give benefit to the assessee in the form of non-payment of taxes and others. Hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,233 Plant & Machinery --- --- Total 22,49,254 1,82,699 As per written submissions dated 23/11/2016 filed before us. Name of the assets Amt. of addition Amount of Depreciation Computer 21,154 3,000 Crane machine 20,25,000 25,515 Tools and dyes 3,04,836 12,692 Plant & Machinery 20,000 1,51,875 Total 23,70,990 1,93,082 As seen from the above - (i) the depreciation claimed in the return of income as per the depreciation schedule for I.T. purpose and the depreciation worked out by the ld.AR while filing written submissions are different which was not explained by the ld.AR. (ii) the values of the additions made are also varying in above two schedules. (iii) the rates at which the depreciation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low on this issue. Hence I confirm the same. 16. One issue raised in assessment year 2009-2010 is that CIT(A) erred in confirming the addition of Rs. 5,80,000 which also taxed in the hands of Director and same income cannot be taxed double time. 17. On this issue, during the course of assessment proceedings, the AO has noticed that the assessee has debited remuneration (to two directors) of Rs. 10 lacs in A.Y.2009-2010, whereas it was only Rs. 4,20,000/- in the immediately preceding year i.e. 2008-2009. The increase was more than double within a year. The AO has also noticed similar hike for A.Y.2011-2012 to Rs. 12 lacs from Rs. 7 lacs in the immediately preceding year i.e. 2010- 2011. Accordingly, the AO has disallowed the difference of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no justification given to show that this increase in turnover is only because of the efforts made by these two directors and nobody else. The increase in turnover could be because of several factors including the increase in the sale price of the material dealt by the assessee. Further, there is no justification given for such a hike of remuneration (more than double) when the GP increase was only insignificantly high i.e. from 7.15% to 7.76% between A.Y.2008-09 to 2011-12. In view of the above discussion, I, do not find any justification of so much increase in the remuneration paid to directors. The argument that the directors have offered the remuneration for taxation in their hands is secondary. I, therefore, confirm the disallow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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