TaxTMI 
TaxTMI 
2023 (4) TMI 938
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....we will decide ITA No. 1465/Del/2014 filed by the Assessee for the assessment year 2008-09 as a lead case. 3. In the instant case, the Assessee declared an income of Rs.57,53,553/- by filing its original return of income on dated 30.09.2008. Subsequently, a search and seizure operation was carried out under the provisions of section 132 of the Act in Gardenia group of cases on dated 09.09.2010, in which the case of the Assessee was also covered. Therefore, notice u/s. 153A of the Act was issued to the Assessee, in response to which the Assessee filed its return of income and declared an income of Rs.70,25,580/-. Thereafter, statutory notices have also been issued to the Assessee and ultimately, the Assessing Officer computed the total taxable income of the Assessee to the tune of Rs.1,71,06,312/- as against declared income to the tune of Rs.70,25,580/- by the Assessee and made the additions of Rs.1,04,88,750/- and Rs.8,64,000/- respectively on account of cash receipts u/s. 69 of the Act and bogus purchase expenditure. 4. The Assessee being aggrieved, challenged the assessment order and the additions referred to above before the ld. Commissioner, who vide impugned order allowed th....
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.... The Assessing Officer has duly accepted the said method even in the assessments done u/s. 153A of the Act. Once the method followed by the Assessee has been accepted, the income has to be computed in accordance with that regularly followed method. 5.3 The ld. Commissioner by considering the submissions of the Assessee and analysing the relevant provisions of the Act though accepted the contentions of the Assessee qua non-applicability of section 69A of the Act, however held the amount of Rs.1,04,88,750/- as taxable u/s. 56 of the Act as income under the head "other sources" for the year under consideration, by holding as under : "4.2 I have considered the assessment order and the submissions made. Facts are that during search and seizure incriminating documents indicating unaccounted cash receipts from customers, inflated purchases and other receipts were seized relating to various persons of the appellant group. The appellants, when confronted with the contents of these documents, admitted unaccounted income amounting in all to Rs.4,78,05,701/-, including the amount of Rs.2,99,05,701/- relating to the appellant company for various assessment years. The amount of Rs. 14,00,000/....
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....he Act are not applicable. Consequently, Ground No. 1 stands dismissed. 6. Ground No. 2 pertains to the confirmation of addition of Rs.8,64,000/- by the ld. Commissioner on account of bogus purchases. It appears from the assessment order that M/s. Laxmi Enterprises has received the payments on account of sales of goods from M/s. Gardenia India Ltd. and various other sources to the tune of Rs.8,64,000/-. Therefore, to ascertain the genuineness of the firm and the transaction entered with Gardenia group and their associates concerns, summon u/s. 131 was issued on 22.11.2012 requiring the said party to personally attend the proceedings and to submit the evidence in support of the sale of goods to these companies, in response to which the said party has submitted the details such as copy of account etc. . Ultimately, the Assessing Officer made the addition of Rs.8,64,000/- being bogus and added to the income of the Assessee on the below mentioned reasons : "6.5. In view of the above facts, the identity & existence of M/s. Laxmi Enterprises and genuineness of transactions of purchases of raw material by the Assessee remained un-verifiable, as ; a) As during the course of survey do....
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....t. Thus, this plea of the appellant is no longer valid. Having gone through the facts and documents, I find that one Sh. Vinod Kumar Dubey supplied both cement and steel to the appellant. While cement was supplied through M/s Laxmi Enterprises (LE) owned by Sh. Dubey, some steel was supplied through M/s Shree Saraswati Steel Center (SSC) owned by one Sh. A K Saini. Sh. Saini knows Sh. Dubey but does not know the appellant company or its directors. Invoices / bills for steel supply were raised by SSC and payment was made by the appellant to SSC. The bills of SSC were given to and payments received, for and on behalf of SSC. by Sh. Dubey. Sh. Saini was never in picture or direct contact with the appellant company. Therefore, if Sh. Saini gave any statement to the effect that lie had actually not supplied the steel, it was to be confronted to Sh. Dubey first and then the appellant to get to the truth. This was never done. Therefore, adverse statement by Sh. Saini could not be held against the appellant. Secondly, it is undisputed that the material was actually used as per the certificate of the architect and the quantity of purchase and consumption of steel in the projects has not bee....
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....hat the purchases were indeed bogus or the material so supplied was not actually consumed. 6.4 We again given thoughtful consideration to the determinations made by the ld. Commissioner and are of the considered view that the ld. Commissioner thoroughly examined the peculiar facts and circumstances of the case and not only deleted the addition in hand, but also directed the Assessing Officer for taking appropriate actions. The Assessee before us did not appear inspite of sending notice, hence, failed to substantiate its ground of appeal and even otherwise, we do not find any reason and/or material to contradict the findings of the ld. Commissioner on the issue in hand. As the Assessee got substantive relief on merits, hence, adjudication of the ground under consideration would be academic exercise only. Accordingly, ground No. 2 also stands dismissed. 7. By way of Ground No. 3, the Assessee has claimed that the assessment order passed by the Assessing Officer u/s. 143(3) read with section 153A of the Act is illegal and without jurisdiction and the ld. commissioner of Income-tax (Appeals) should have held so. The Assessee failed to substantiate the present ground and even otherwis....
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....s ground No. 1 also stands dismissed. 10. Ground No. 2 pertains to the challenge of the jurisdiction of the Assessing Officer under the provisions of section 153A of the Act. In view of our decision on Ground No. 2 raised by the Assessee in ITA No. 1465/Del/2014 for A.Y. 2008-09, as decided by us in para No 6.2 of this order, this ground also stands dismissed. 11. By way of Ground No. 3, the Assessee has raised the issue that addition of Rs.50,86,488/- on account of disallowance of commission is beyond the scope of provisions of section 153A of the Act and the ld. Commissioner erred in not holding so. We observe that the ld. Commissioner deleted the said addition. The Assessee failed to substantiate the present ground and even otherwise we do not find any infirmity in the decision of the Ld. Commissioner on the issue under consideration. Consequently, in the absence of any plausible reason and/ or material, we are inclined to dismiss this ground under consideration. 12. Ground No. 4 pertains to the addition of Rs.2,07,040/- on account of disallowance of interest as made by the Assessing Officer, however, deleted by the ld. Commissioner. The Assessee by raising this ground also r....
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....d by the Assessee in ITA No. 1465/Del/2014 for A.Y. 2008-09, as decided by us in para no. 5.3 of this order, this ground also stands dismissed. 17. Ground No. 2 pertains to addition of Rs.22,21,86,248/- which was made by the Assessing Officer on account of alleged bogus purchase. The Assessee has claimed that the same was beyond the provisions of section 153A of the act and the ld. Commissioner erred in not holding so. In view of our decision on ground No. 2 raised by the Assessee in ITA No. 1465/Del/2014 for A.Y. 2008- 09, as decided by us in para no. 6.2 of this order, consequently, this ground is also dismissed. 18. By Ground No. 3, the Assessee has raised the issue that the addition of Rs.13,00,000/- on account of alleged unexplained loan was beyond the scope of the provisions of section 153A of the Act and the ld. Commissioner erred in not holding so. We observe that the ld. Commissioner deleted the said addition of Rs.13,00,000/- by considering the peculiar facts and circumstances of the case. The Assessee failed to substantiate the present ground and even otherwise we do not find any infirmity in the decision of the Ld. Commissioner on the issue under consideration, hence ....
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....014 for A.Y. 2008-09, as decided by us in para No. 6.2 of this order, this ground, also stands dismissed. 23. Ground No. 3 is general in nature, hence, needs no adjudication. 24. In the result, the appeal filed by the Assessee stands dismissed. REVENUE'S APPEALS ITA No. 1875/Del/2014 (A.Y. 2009-10): 25. The Revenue Department by filing the instant appeal has raised the following grounds of appeal: "1. The order of Ld. CIT (A) is not correct in law and facts. 2. On the facts and circumstances of the case the Ld. CIT(A) has erred in deleting the addition of Rs.57,02,001/- made by AO as deemed income u/s 69A of the IT. Act, 1961. 3. On the facts and circumstances of the case the Ld. CIT(A) has erred in law in deleting the addition of Rs. 2.62,02,645/- made by AO on account of Bogus purchase. 4. On the facts and circumstances of the case the Ld. CIT(A) has erred in law in deleting the addition of Rs. 50,86,488/- made by AO on account of excessive commission expenses. 5. On the facts and circumstances of the case the Ld. CIT(A) has erred in law in deleting the addition of Rs. 2,07,040/- made by AO on account of interest free advances. 6. The appellant craves leave ....
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....0,96,20,909/-. The fact of the matter is that the advance received from the customers during the year was Rs.54,66,19,438/- and not Rs.10,96,20,909/- as stated by the Assessing Officer and therefore, the commission expense claimed by the Assessee works out to be less than 2% and therefore, not excessive at all. The Assessee in support of its case also disclosed the figures such as opening balance of advances from customers as on 01.04.2008 and the advances received during the year and the sales books in profit and loss account and the closing balance of advances from customers as on 31.03.2009. The Assessee had last claimed that the Assessing Officer computed the figures of advances from customers by deducing the opening balance of advances from customers from closing balance of advances from customers, committing the mistake of not considering the sales of Rs.43,69,98,530/- credited in the P & L account. The ld. Commissioner by thoroughly considering the assessment order and the aforesaid explanation made by the Assessee came to the conclusion that the calculation of the figure of advance from customer is factually wrong and cannot form the basis of any disallowance. The ld. Commi....
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....ins to deletion of addition of Rs.1,03,87,450/- made by the Assessing Officer as deemed income u/s. 69A of the Act. In view of our decision on ground No. 1 raised by the Assessee in ITA No. 1465/Del/2014 for A.Y. 2008-09, as decided by us in para No. 5.3 of this order, this ground no. 02 raised by the Revenue department also stands dismissed. 35. Ground No. 3 pertain to the deletion of addition of Rs.22,21,86,248/- made by the Assessing Officer on account of bogus purchases. In view of our decision on ground No. 2 raised by the Assessee in ITA No. 1465/Del/2014 for A.Y. 2008-09, as decided by us in para No. 6.2 of this order, this ground no. 03 of the Revenue department stands dismissed. 36. Ground No. 4 pertains to deletion of addition of Rs.13,00,000/- made by the Assessing Officer on account of unexplained loan credit from Anjali Buildcom Pvt. Ltd. We observe that the ld. Commissioner by considering the peculiar facts and circumstances that the amount was not borrowed during the year under consideration, but only the repayment was made during the year, as the credit does not pertain to the previous year, no addition can be made in this year. The Assessee has discharged its pri....