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TMI Blog2021 (8) TMI 429X X X X Extracts X X X X X X X X Extracts X X X X ..... th the facts of the case. 2. The Ld. CIT(A) erred in not appreciating the fact that the assessee was making purchases from related party covered u/s 40A(2)(b) of the I.T. Act, 1961 and the assessee failed to satisfy the Assessing Officer as to whether the price paid for the goods purchased from M/s MSA Engineering Pvt. Ltd was at arms length or not. Therefore, genuineness of purchases was not established by the assessee. 3. The Ld. CIT(A) erred in accepting the books of accounts by setting aside the observations of the Assessing Officer in this regard." 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : Assessee is an individual taxpayer drawing salary from M/s. India Intermesh Limited in the cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved, the Revenue has come up before the Tribunal by way of filing the present appeal. 5. Assessee has not preferred to put in appearance despite issuance of the notice and consequently, we proceeded to decide the present appeal with the assistance of the ld. Senior Departmental Representative as well as on the basis of documents available on the file. 6. We have heard the ld. Senior Departmental Representative for the revenue to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 7. We have perused the impugned order passed by the ld. CIT(A), operative part thereof is extracted for ready perusal as under :- "8. I have gone through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse was found. It is also a fact that since no transport charges were claimed by the assessee, it was not material for him to keep the record of the bills or L/R. - The argument of the Assessing Officer is that the Authorised Representative has not filed the specific origin of goods i.e. place of the manufacture, he also fails to provide the detailed note on the business of the assessee right from the purchase the goods and finalizing the sale. In my opinion since the assessee was only a trader procuring order, the place of manufacture or origin of goods was not important to him, neither to know the process of manufacture or the party by whom the goods were manufacture. Nor does it seem relevant for the purpose of assessment, of a trader ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s-tax return has been filed in respect of sales. Regular payments are being received from debtors and payments are being made to the suppliers. The assessee has maintained regular stock register. The parties have confirmed that they have supplied the goods and purchased the goods. ii) The Assessing Officer has not able to pin point any incriminating facts to justify the rejection of books of accounts. He is blowing hot and cold at the same time, by firstly treating the transaction as sham and at the same time, rejecting the books and estimating a higher profit rate on the turnover disclosed in the books. 9. Considering the facts and circumstances of the case and following the judicial pronouncement relied upon by the assessee, the rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvolved in transporting, inspection, loading and unloading of goods. The payment of salary is not for the purpose of business. Considering the facts of the case that the assessee is filing sale-tax return and some employee may be needed to run day to day establishment and banking matters, I allow the salary of manager & a few executives amounting to Rs. 6,76,670/-. The remaining expenses under the head salaries are disallowed. Thus would result in an addition of Rs. 14,68,400/-. 8. Undisputedly, assessee is a shareholder in M/s. MSA Engineering Pvt. Ltd. and also proprietor of M/s. Intelligent Engineering Solutions and supplied the goods to Energo Engineering Projects Ltd.. It is also undisputed fact on the file that goods were neither tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by the AO that when assessee has been procuring only orders, residential address can be given as a correspondence address. 12. So, in view of what has been discussed above, we are of the considered view that when the factual findings have come on record that assessee has not been transporting, inspecting, loading and unloading of goods, the findings given by AO are based upon conjectures and surmises. So, ld. CIT (A) has rightly deleted the recalculated profit @ 1.5% and has allowed the salary of manager and a few executives amounting to Rs. 6,76,670/- and disallowed the remaining expenses. So, finding no illegality or infirmity in the impugned order passed by the ld. CIT(A), present appeal filed by the Revenue is hereby dismissed. Or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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