TMI Blog2018 (9) TMI 1626X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed. This factious loss was created only to square off the profits shown from Sharaf Chemicals. Without controverting the detailed finding so recorded by the AO, the CIT(A) has deleted the addition merely by observing that the books of accounts of the assessee were audited and have not been rejected by the AO. CIT(A) also stated that no enquiry was done by the AO to establish that the activity on which losses were shown by the assessee were bogus. Without giving any positive finding on the enquiry which AO has failed to do, the CIT(A) cannot delete the addition just by stating that AO has failed to do the enquiry. There should be positive finding by CIT(A) in support of his action of deleting the addition made by AO. We set aside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds be set aside and that of the A.O. be restores. 4. The appellant craves leave to add, amend or alter all or any of the grounds of appeal. 3. In this case, appeal was fixed for hearing on 21/02/2018, but nobody appeared on behalf of the assessee. The case was adjourned to 24/04/2018. Even on 24/04/2018, nobody appeared on behalf of the assessee. The case was heard after hearing the argument of learned DR. On 26/05/2018, the case was again put for clarification, so as to give one more opportunity to the assessee and notice was served by RPAD for appearing on 28/05/2018. On 28/05/2018 nobody appeared for the assessee. Bench also directed learned DR to serve the notice. The department also served notice to the assessee and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to reassess the total income of the assessee. As such, notice u/s 148 of the Act was issued on 30.03.2014 and served on the assessee. After reopening the assessment, AO computed income earned by assessee by observing that assessee-company has made purchases of ₹ 31.95 Crores from Temptation Foods, the goods purchased from Temptation Foods were sold to Dabu Brothers, Jai Mata Di, Kundan Foods and Toral Fruits amounting to ₹ 27.76 Crores. After setting off against fictitious loss created out of transactions between the assessee and Temptation Foods Ltd., accordingly, the addition of ₹ 4,19,73,225/- was made by AO by disallowing the artificial loss. 7. By the impugned order, CIT(A) deleted the addition after observing as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn and forms part of ₹ 36,83,989/- income declared in return of income. It is seen that there is merit in the submission of AR that once the income is already part of P L account further addition is not called for of the same amount. In view of this discussion the addition of ₹ 69,825/- made by the A.O. cannot be sustained in appeal and is directed to be deleted. Accordingly these grounds of appeal are allowed. 8. Against the above order of CIT(A), Revenue is in further appeal before us. 9. We have heard the learned DR and gone through the orders of the authorities below. From the record we found that there was a survey at the assessee s business premises on 26/08/2013. During the course of Survey, the statement of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 131 of the Act, the director of the assessee company has unequivocally admitted that he has been providing accommodation entries to Saraf Chemicals and earning a commission on the same. Further, during the course of assessment proceeding it is seen from the ledger account that the assessee company had made purchases of ₹ 31,95,60,130/- from Temptation Foods. The goods purchased from Temptation Foods were sold to Dabur brothers, Jai Mata Di, Kumdan Foods and Toral Fruits amounting to ₹ 27,76,56,1907- and the loss claimed on these transactions stands at ₹ 4,19,03,940/-(Rs.31,95,60,130-Rs.27,76,56,190/-). 11. It is clear from the order of the AO that Highland Industries Limited booked bogus sales to Saraf Chemicals Lim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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