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2020 (3) TMI 1143

..... T:- Section 143 assessment was completed in respect of discount and rebate which was categorically inquired by the Assessing Officer during the original assessment. All the details were before the Assessing Officer and after verification only the Assessing Officer passed original assessment without giving any adverse finding to that effect. It is pertinent to mention that the bank statement called for and the information given by the bank to the Assessing Officer itself reveals that the transaction and the payments were the genuine payments in respect of discount and rebate. There is no doubt or suspicious arise from the perusal of these documents. Merely creating a doubt of the transaction does not suffice the Assessing Officer to reopen t .....

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..... & 5/5/2016 passed by CIT(A)-24, New Delhi for Assessment Years 2005-06 & 2012-13 respectively. 2. The grounds of appeal are as under:- (ITA No. 1105/Del/2015 A.Y. 2005-06) 1.1. The order of the learned Commissioner of Income Tax (A) is arbitrary, against law and facts on record. 1.2 The learned Commissioner of Income Tax (A) has erred in not considering the fact that the assessment was reopened u/s 148 of the Income Tax Act, 1961, on the basis of general allegation without any incriminating material against the assessee and was reopened after the expiry of the time limit prescribed under the Income Tax Act, 1961 and as such the assessment order so framed is bad in law 1.3 The learned Commissioner of Income Tax (A) has not considere .....

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..... ) has erred in deleting the addition for inflated claim of transportation expense amounting to ₹ 28,57,378/-. 4. On the facts and circumstances of the case, the CIT(A) has erred in deleting the addition regarding bogus/inflated claim of new vehicle expense amounting to ₹ 41,69,303/-. 5. On the facts and circumstances of the case, the CIT(A) has erred in deleting the disallowance of travelling expenses amounting to ₹ 48,19,079/-. 6. On the facts and circumstances of the case, the CIT(A) has erred in holding that the regular books of account seized during search do not form incriminating document even if its entries are found false on investigation. 7. On the facts and circumstances of the case, the CIT(A) has erred in delet .....

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..... tion of ₹ 87,17,271/- on this account to the return of income. 5. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 6. The Ld. AR submitted that in this case a search and seizure action u/s 132(1) of the Act took place in February, 2012. The assessee s case was reopened u/s 148 on the pretext that the assessee was making false claim of discounts passed of the customers through self-made vouchers and bearer cheques. On examination of the bank statement in respect of Bank Account No. 012700210006722, PNB, New Delhi for Financial Year 2004-05 & 2005-06 belonging to PASCOS, Proprietor through Sharuk Passi, it was noticed by the Assessing Officer that .....

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..... the assessee. The Ld. AR further submitted that the observation at the time of re-opening relating to cheques in cash by few persons are not tenable as these persons were neither the employee of the assessee nor related to the assessee. The Assessing Officer did not make any adverse inference regarding the fact that expenses are neither in the nature of personal expense nor in the nature of capital expenditure. Thus, the Ld. AR submitted that the additions sustained by the CIT (A) is not correct and may be quashed. 7. The Ld. DR submitted that the reasons had categorically mentioned that the assessee did not disclose the amount of income earned by way of claim of genuine discount and failed to disclose fully and truly all material fact in t .....

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..... lack in the context of invocation of Section 148 itself. Therefore, the reopening itself is bad and hence the assessment is bad in law. The appeal of the assessee is allowed. 9. In result, appeal being ITA No. 1105/Del/2015 filed by the assessee is allowed. 10. As regards ITA No. 4292/Del/2016 for A.Y. 2012-13, the brief facts are that the search and seizure action u/s 132 of the Act was conducted on PASCO Group of cases on 17/2/2012. In response to return filed u/s 153A of the Act, the detail questionnaire was issued calling for the various information and explanation by the Assessing Officer. The Assessing Officer while passing the order disallowed the expenses of ₹ 98,12,000/- under the head rebate and discount, also disallowed &# .....

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..... respect does not sustain. 14. We have heard both the parties and perused the material available on record. It is pertinent to note that there is no incriminating material shown by the Assessing Officer upon which the addition was made. In fact, the seized ledger accounts pertains to A.Y. 2011-12 only and therefore the said material cannot be held against the assessee for A.Y. 2012-13 and also cannot be termed as incriminating material. While making the additions on these documents, the Assessing Officer has not specifically pointed out that these expense but has disallowed all these expenses only on ad-hoc basis which is not permissible under the Income Tax Act. Therefore, the additions made itself does not have any foundation as such. Thus .....

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