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TMI Blog2022 (7) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... essee 7658/Del/2019 2015-16 M/s. Starline Clothing P. Ltd. 26.12.2017 CIT(A)- 3, Gurgaon, order dated 23.07.2019 Assessee 2. The grounds of appeal raised by the assessee in ITA No. 7654/Del/2019 reads as under: ITA No. 7654/Del/2019 (Assessment Year 2013-14) "1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in assuming jurisdiction u/s. 153C and that too for this year and further erred in passing the impugned assessment order, more so when 'satisfaction' has not been recorded by AO of the searched person and when there was no incriminating document was found. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in assuming jurisdiction and framing the impugned assessment order u/s. 153C, is bad in law and against the facts and circumstances of the case and the same is not sustainable on various legal and factual grounds. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in exercising his jurisdiction in making addition of Rs. 32,06,968/- (i.e. 5% of Rs. 6,41, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer however challenged the very existence of the proprietary concern Shri Ram Export which has claimed to have been done job work for M/s. Orient Crafts. The Assessing Officer, in essence, held the job work income reported by the assessee herein as sham and merely an eyewash. The proprietary concern of the assessee provided job work services to M/s. Sai Export which is also claimed to be a paper company operated by owners of Orient Crafts Ltd. Consequently, the Assessing Officer disallowed the expenses booked by Orient Craft, i.e., beneficiary of the purported job work services from Shri Ram Exports as bogus and consequently made an addition of Rs. 6,41,39,357/- being receipt from Sai Exports, on protective basis in the hands of the assessee herein. The Assessing Officer inter alia noted that similar addition in the hands of M/s. Orient Craft Ltd. in question has been carried out towards expenses claimed on account of job work, on substantive basis and thus the addition is made on protective basis in the hands of the assessee herein. The CIT(A), in first appeal, modified the addition and restricted the addition in the hands of the assessee at 5% of the total bogus job work i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... worker for two months for all the years involved and so also we have seen salary sheet for two months on sample basis, on account of payment of wages and actuarial certificate. Similarly pages 1479 to 1496 of the paper book is the sample copy of bonus register showing actual payment proof of bonus to the employees of job workers and paper book page 1497 to 1502 is the sample copy of Leave register of the employee of the job workers. Similarly paper book page 1503 to 1518 is the copy of month wise PF and ESI deduction and deposit and sample copy of two months challan of each year along with ledger account of PF, other evidences of the paper book at pages 1503 to 1518, 1519-1531, 1532-1549, 1550-1558 & 1565-1577, 1559-1564 & 1578-1584, 1590-1613, 1559-1564, 1578-1584 and 1585-1589 all are the evidences of M/s. Shri Ram Export clearly establish that genuineness of job work charges incurred by the assessee company through M/s. Shri Ram Export and therefore the disallowance made in the assessment order and confirmed by CIT(A) is not sustainable even on merit. The adverse observations made by the A.O. in the assessment order have been met by the assessee one by one and paper book pages 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made an addition on protective basis in view of substantive additions carried out in the case of Orient Craft Ltd. It was thus submitted that the matter should, at best, be restored to the file of the Assessing Officer for verification of the nature of the expenses claimed which are highly doubtful and inexplicable as per certain observations made by the Assessing Officer. 5.4. In the rejoinder, the ld. counsel for the assessee submitted that no appeal has been filed by the Revenue seeking verification of expenses and the assessee is entitled to relief as claimed having regard to the clear observations made in the course of Orient Craft Ltd. in relation to services rendered by the assessee-company. 6. In the backdrop of respective arguments, we notice that the Co-ordinate Bench of Tribunal in ITA No. 3310; 3011 & 3312/Del/2019 in the case of Orient Craft Ltd. vs. DCIT, Central Circle-II, Gurgaon vide three separate orders all dated 24.09.2021 have given a clear finding towards genuineness of job work charges incurred by the Orient Craft Ltd. through the assessee-company herein. The Co-ordinate Bench has thus deleted the corresponding additions in the hands of the Orient Craft Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res and without giving the opportunity of being heard and without observing the principles of natural justice. 4. That in any case and in any view of the matter, action of Ld. CIT(A) in making addition of Rs. 1,88,248/- on account of alleged commission/brokerage as business income, is bad in law and against the facts and circumstances of the case and the same is outside the purview of the impugned proceedings u/s. 153C of the Act. 5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in rejecting the books of accounts u/s. 145(3) of the Act. 6. That in any case and in any view of the matter, addition made by Ld. CIT(A) in the impugned order are beyond jurisdiction and illegal also for the reason that these could not have been made since no incriminating material has been found as a result of search. 7. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in passing the impugned assessment order without there being requisite approval in terms of section 153D and in any case approval if any is mechanic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rments produced in which the material/fabric purchased from the above parties have been used. 47. Further, several evidences were filed by the assessee along with the above said reply to buttress its arguments that the purchases were made from the above said concern and the same are also enclosed in the paper book at Annexure-D reply letter 08.12.2017 PB 1328-1559 (which is already enclosed in the paper book for A.Y. 2011-12 in assessee's own case and these evidences are copy of bank realization certificate, export sales invoices, packing list, shipping/airway bill, purchase invoice of fabric from above stated party, lorry receipts, fabric receipt note from store and fabric inspection report. The copies of purchase invoices from the above said party on sample basis were also placed before Ld. AO apart from complete books of accounts which were produced to Ld. AO. Such sample copies of the purchase invoices are also enclosed in the paper book at PB 1328-1559 (which is already enclosed in the paper book for A.Y. 2011-12 in assessee's own case). Apart from this, a chart showing the standard input/output ratio, as prescribed by the Standard Input/Output Norms under hand book ..... X X X X Extracts X X X X X X X X Extracts X X X X
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