TMI Blog2021 (1) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be genuine and bogus at the same time. In this view of the matter the notional addition of 2% as bogus sales commission is not a sustainable. When the sales have been accepted and taken into account in determining the income of the assessee there cannot be at the same time a notional 2% disallowance for commission on bogus sales, resulting in a double prejudice unsustainable in law - sales cannot be correct and bogus at the same time. This follows the common law maxim of approbate and reprobate. When the addition has already been deleted by us on merits, in our considered opinion the challenge to addition on other aspects are now only of academic interest. Hence we are not engaging in to the same. In the result we set aside the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 10-11 for reference to orders of authorities below. 7. Brief facts of the case are as under :- The assessee filed E-return of Income u/s. 139(1) for AY 2010-11 on 13.10.2010 declaring total income of ₹ 4,14,61,162/- and the same was assessed u/s. 143(3) r.w.s. l53B(1)(b) of the I.T. Act on 28.12.2011 at an assessed income of ₹ 4,28,l6,050/-. Thereafter, order u/s. 143(3) r.w.s. 147 of the I. T. Act was completed on 25.03.2014 at an assessed income of ₹ 4,93,36,940/-. 8. A search action u/s. 132 of the I. T. Act was carried out in the case of M/s. Luxora Infrastructure Pvt Ltd. and its associated group companies including promoters and directors. M/s. Luxora Infrastructure Pvt. Ltd. is a Joint venture between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplying the same to the Co. Ltd. The assessee company also received other income such as co-partner share in firm, commission, interest, rent, share of profit from partnership firm and dividend during the year. To verify the genuineness of the transaction entered by the assessee with M/s. Ecoscapes International Pvt. Ltd. and M/s. Rare Earth-A Div of M/s. Ecoscapes International Pvt. Ltd., notices u/s. 133(6) of the I. T. Act were issued to the above said purchase party and they were required to explain and prove the genuineness of the transaction entered with. In response to the same both the parties confirmed the transaction. However they stated that rate wise details of goods and that the evidences of delivery of goods and delivery chall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 13,10,141/-. 11. Upon assessee's appeal learned CIT(appeals) referred to the AO's order. He further noted that it would be pertinent to mention here that in the appeal proceedings, assessee submitted a stock register to justify the genuineness of the sales. He referred to certain papers thereof. Thereafter learned CIT(appeals) concluded as under :- A perusal of the so called stock register shows that this is not a real stock register but only a self justifying document created to show party wise purchase and its claimed sales. A stock register is a book, which would contain day-wise entries of all incoming goods of one nature from various parties and position of daily closing stock of that particular item after de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional Pvt. Ltd. are on record. Company confirmed transaction of sales vide letter dated 24/11/2017. No shred of evidence brought on record that legal evidence is incorrect or false. D) Observation of A.O. that M/s. Ecoscapes International Pvt. Ltd. is company controlled by Shri Kirti Kumar Tarachand Doshi is factually incorrect. E) No evidence has been brought on record to show that assessee has paid any commission at 2% on the sales made to M/s. Ecospace International Pvt. Ltd. F) Observation of A.O. that Apex Court in the case of Kachwala Gems vs. JC1T has held that Account Payee Cheques is not sufficient to establish genuineness of purchases is not correct. No such conclusion is appearing in judgement. G) The assessment f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assesses, have made notional 2% addition for commission earned on the said bogus sales. However it is also noted that the said sales have been included in income and the income so derived has also been taken into account in the assessment. We find that the assessee is correct in this regard that when the sale is taken into income, there cannot be a further addition of 2% notional addition for bogus sales. The same sale cannot be genuine and bogus at the same time. In this view of the matter the notional addition of 2% as bogus sales commission is not a sustainable. 15. The learned counsel of the assessee has raised various other grounds that in the submission above that observation of A.O. that M/s. Ecoscapes International Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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