TMI Blog2021 (11) TMI 877X X X X Extracts X X X X X X X X Extracts X X X X ..... Addition on account of margin money - Assessee has produced the invoices before the Assessing Officer by suppressing the total cost of two LPG Tankers so as to match the amount of payment being the loan amount of ₹ 50,00,000/- and cash payment of ₹ 50,000/-. Whereas at the time of taking the loan, the assessee has produced the invoices showing the total cost of two Tankers at ₹ 64,60,000/- out of which assessee undertook to pay ₹ 14,60,000/- as margin money from her own source. Since the assessee has paid only ₹ 50,000/- out of ₹ 14,60,000/- and the balance of ₹ 14,10,000/- was treated by the Assessing Officer as unexplained investment/payment. The Assessing Officer conducted an enquiry from the bank which has confirmed the fact that the total cost of two LPG Tankers as per the invoices/quotations filed by the assessee is ₹ 64,60,000/- out of which a margin money of ₹ 14,60,000/- was directly paid by the assessee to the supplier. Once the bank has confirmed the payment of margin money by the assessee to the suppliers then in the absence of explanation of source, this amount of ₹ 14,10,000/- is rightly added to the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.) Because the CIT has erred in law and on facts in enhancing the addition to ₹ 15,38,880/- from ₹ 14,10,000/- in contravention of Section 251 of the Income Tax Act, 1961. 3.1) Because the CIT(A) has erred in law and on facts in confirming the addition of ₹ 4,21,290/- on account of payment to M/s. Spark Engineers, Pune. 3.2) Because the payment made to M/s. Spark Engineers, Pune amounting to ₹ 9,70,000/- for fabrication of two LPG tankers was against invoices amounting to ₹ 4,21,290/- and ₹ 5,48,710/-, no income arose, hence, no addition was called for. 4.) Because the CIT(A) has erred in law and on facts in not discussing Additional Evidences submitted under Rule 46A of the Income Tax Rules, 1962, in the form of copy of accounts form the suppliers. 5.) Because while confirming the additions the CIT(A) did not consider the submissions filed by the appellant in response to the Remand Report submitted by the Assessing Officer. 6.) Because the Order appealed against is contrary to law, facts and principles of natural justice. 2. Ground nos. 1 to 3 are regarding addition made by the Assessing Officer of ₹ 14,10,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, the Assessing Officer made the addition of ₹ 14,10,000/- on account of margin money and ₹ 4,21,290/- towards bogus claim of bills issued by M/s. Spark Engineers. 2.1. On appeal, the assessee produced additional evidence before CIT(A) and contended that the Assessing Officer has not confronted the assessee with the record obtained from the supplier by issuing notice under section 133(6) of the Act. The material received by the Assessing Officer in response to notice under section 133(6) was used against the assessee without giving an opportunity to the assessee. The CIT(A) called for a remand report from the Assessing Officer after considering the additional evidence and contention of the assessee in the remand report, the Assessing Officer reiterated its stand and argued for the confirmation of the additions. The CIT(A) after considering the remand report confirmed the total addition of ₹ 15,38,880/- as against the two additions of ₹ 14,10,000/- and ₹ 4,21,290/- made by the Assessing Officer. 3. Before the Tribunal, the learned AR of the assessee has submitted that the assessee has submitted a proposal of ₹ 50,00,000/- to the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepted by the Assessing Officer and treated as bogus once the assessee has not claimed this payment as an expenditure but the same is capitalized to the cost of the two tankers this cannot be added to the income of the assessee. Thus, the learned AR has submitted that the addition made by the Assessing Officer and confirmed by the CIT(A) is not justified. 4. On the other hand, learned DR has submitted that M/s. Spark Engineers has issued two invoices dated 2.7.2014 for fabrication of each LPG Tankers which gives the total amount of sales of ₹ 2,74,355/- each. However, the assessee has claimed to have paid the total amount of ₹ 9,70,000/- for two LPG Tankers which is ₹ 4,21,290/- more than the total amount shown in the invoices dated 2nd June, 2014. The assessee then produced two more invoices of M/s. Spark Engineers of ₹ 2,10,645/- each total amounting to ₹ 4,21,290/- to make up the excess payment. He relied upon the orders of the authorities below. 4.1. As regards the addition on account of margin money, the assessee has not explained how the total cost of these two Tankers is reduced from 64,60,000/- to 50,50,000/-. He has referred to the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LPG Tankers but the amount cannot be added to the income of the assessee merely because the assessee has paid this amount in excess. 6. As regards the addition made by the Assessing Officer on account of margin money of ₹ 14,10,000/-, there is no dispute that the assessee has furnished different details and facts before the bank for obtaining loan for purchase of two LPG Tankers and a different set of details and bills were produced by the assessee before the Assessing Officer. There are significant discrepancies in the documents produced by the assessee before the bank and before the Assessing Officer. The Assessing Officer has pointed out various discrepancies in the show cause notice dated 17.11.2017 and the relevant details are as under:- The invoices submitted to the bank of procuring loan are as 'under:- i. Bafna Motors for purchase of LPG tankers ₹ 18,83,763/- for each tanker and ₹ 37,67,526/- for two tankers. ii. TATA DLT for purchase of Tandem Axle Running Gear ₹ 4,82,478/- for each tanker and ₹ 9,64,956/- for two tankers. iii. Spark Engineers Pune to fabricate LPG Mobile Road tanker as per Drawing and mounting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoices before the Assessing Officer by suppressing the total cost of two LPG Tankers so as to match the amount of payment being the loan amount of ₹ 50,00,000/- and cash payment of ₹ 50,000/-. Whereas at the time of taking the loan, the assessee has produced the invoices showing the total cost of two Tankers at ₹ 64,60,000/- out of which assessee undertook to pay ₹ 14,60,000/- as margin money from her own source. Since the assessee has paid only ₹ 50,000/- out of ₹ 14,60,000/- and the balance of ₹ 14,10,000/- was treated by the Assessing Officer as unexplained investment/payment. The Assessing Officer conducted an enquiry from the bank which has confirmed the fact that the total cost of two LPG Tankers as per the invoices/quotations filed by the assessee is ₹ 64,60,000/- out of which a margin money of ₹ 14,60,000/- was directly paid by the assessee to the supplier. Once the bank has confirmed the payment of margin money by the assessee to the suppliers then in the absence of explanation of source, this amount of ₹ 14,10,000/- is rightly added to the income of the assessee by the Assessing Officer. The CIT(A) enhanced th ..... 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