TMI Blog2018 (7) TMI 875X X X X Extracts X X X X X X X X Extracts X X X X ..... ly failed to substantiate the expenditure with supporting vouchers / documents and all the expenditure was in cash. The complete onus, in this regard, was on assessee which he has failed to discharge. Therefore, the addition to the extent of 20% of expenditure in question i.e. ₹ 5,98,650/- stand confirmed by us. The same works out to ₹ 1,19,730/-. Addition on account of valuation of closing stock - Held that:- Revenue is unable to controvert the fact that the assessee was consistently following the same method of accounting for valuing the closing stock. Further the difference in the valuation is arising only on account of the fact that Ld. AO has considered Total Saleable Area as against Total Constructed Area taken by asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f material available on record and after hearing Ld. Departmental Representative [DR], Shri Rajesh Kumar Yadav. The effective grounds raised in the appeal reads as under:- 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in restricting addition of unexplained expenditure of ₹ 3,20,060/- (@8% of ₹ 40,00,753) u/s.69C of the I.T.Act on account of bogus purchases as against the addition of ₹ 40,00,753/- made by the AO without appreciating that the assessee has not produced any cogent evidence to substantiate the fact that it had taken actual delivery of goods purchased from this party and that the notices under 133(6) issued to the party from whom alleged bills were received were re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Bogus Purchases 40,00,753/- 2. Valuation of Closing Stock 23,93,082/- 3. Disallowance of Sales Promotion Expenses 5,98,650/- Total 69,92,485/- The addition of bogus purchases have been made since the assessee could not substantiate the purchases made from an entity namely Global Trade Impex who was found to be suspicious / hawala dealers by Sales Tax Authorities, Maharashtra. The addition on account of Sales Promotion Expenses has been made in view of the fact that the expenses were incur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or free to the original owners and the assessee was only supposed to develop the same. If the expenditure is not reduced from the calculation of the closing stock, it would definitely lead to inflated gross profit for the assessee and would not give a true picture of the affairs of the business. I agree with the contention of the appellant that once the land which has been procured for free and has not been considered by the appellant while computing the total cost incurred for the project, then there is no question of considering it as closing stock value. Further the arguments advanced by the appellant as supported by the decision of the Hon ble High Court in the case of Chainrup Sampatram Vs Commissioner of Income Tax (1953) (24 ITR 481) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ower authority in this regard. Moreover, the issue has already been dealt with by this Tribunal in assessee s appeal wherein the estimation has been found to be reasonable. Ground Numbers 1 2 stands dismissed. 6. So far as the disallowance on account of Sales promotion Expenses is concerned, we find that the assessee has miserably failed to substantiate the expenditure with supporting vouchers / documents and all the expenditure was in cash. The complete onus, in this regard, was on assessee which he has failed to discharge. Therefore, the addition to the extent of 20% of expenditure in question i.e. ₹ 5,98,650/- stand confirmed by us. The same works out to ₹ 1,19,730/-. Ground Number 4 stands partly allowed. 7. So far ..... X X X X Extracts X X X X X X X X Extracts X X X X
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