TMI Blog2023 (11) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... e find that the assessee has not claimed any expenditure with respect to purchases during the FY 2014-15 and has shown the entire purchases as stock-in-trade from AY 2015-16 to 2019-20. Further, during the AY 2019-20, the assessee has written off the stock worth Rs. 17,71,40,617/- as it was damaged due to wetness. AR also demonstrated that these written off of stock-in-trade has not been included in the expenditure claimed during the AY 2019-20. Further, we also find that the Search Team also could not find any stock of Tobacco worth Rs. 17,71,40,617/- during the course of search AO has not brought on record any material to corroborate the seized material warranting addition of bogus purchases to the extent of Rs. 14.47 Crs. In these circumstances, we find that the Ld. CIT(A) has rightly considered these facts and has deleted the addition made by the Ld. AO to the extent of Rs. 17.71 Crs. We therefore find no infirmity in the order of the Ld. CIT(A) and thereby dismiss the grounds raised by the Revenue. - Shri Duvvuru Rl Reddy, Hon ble Judicial Member And Shri S Balakrishnan, Hon ble Accountant Member For the Assessee : Sri GVN Hari, AR For the Revenue : Dr Satya S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28/7/2014 2,00,00,000 7. 7/8/2014 2,00,00,000 8. 8/8/2014 1,97,00,000 Total 14,47,00,000 3. The Ld. AO therefore requested the assessee to explain the purpose of cash withdrawals during the FY 2014-15. In response, Sri Polisetty Somasundaram deposed before the Ld. AO and submitted that his brother Mr. Polisetty Amarnath has withdrawn the amount of Rs. 14.47 Crs from the bank account of M/s. Polisetty Somasundaram Pvt Ltd [M/s. PSSPL]. Mr. Polisetty Somasundaram further submitted that the fixed assets of the company i.e., M/s. PSSPL were partitioned between himself and his brother Sri Polisetty Amarnath as per the MoU dated 22/7/2008 wherein Sri Polisetty Amarnath received factory premises of M/s. PSSPL including plant and machinery as part of his share. Subsequently, Mr. Polisetty Amarnath sold his share of property for a consideration of Rs. 30 Crs to M/s. Jyothirmaye Properties Pvt Ltd. Sri Polisetty Somasundaram further submitted that Sri Polisetty Amarnath withdrew Rs. 14.47 Crs from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in law and facts in deleting the addition of Rs. 17,71,40,617/-. 3. The Ld. CIT (A) erred in accepting that the assessment was without reference to the incriminating material found during the course of search thought the assessment was completed based on the material evidence gathered during the course of search that the entire stock shown in the books is bogus. 4. The Ld. CIT (A) has erred in law and facts in not giving any credence to the MoU between the management regarding the partition of the assets of the company. 5. The Ld. CIT(A) erred in law in questioning the evidentiary value of the statement recorded u/s. 132(4). It was clearly stated by the management that they could not vouch for the genuineness of the purchases or stock mentioned in the books of account. 6. The Ld. CIT (A) has erred in relying on the books of account submitted by the assessee for AY 2019-20 though these were prepared after conclusion of search, in response to the findings of the search. 7. The Ld. CIT(A) has erred in not considering the contentions of the AO that no detail was provided by the assessee regarding the purchases or stock. 8. Any other ground that may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the order of the Ld. CIT(A) be upheld. 6. We have considered the rival submissions and perused the material available on record as well as the orders of the Ld. Revenue Authorities. It is an admitted fact that the assessee in his own deposition has stated that purchases of tobacco was made out of the withdrawals from the bank account of the assessee company to the extent of Rs. 14.47 Crs. We also find that the assessee has admitted the sale proceeds of Rs. 30 Crs towards the sale of property and has offered the capital gains tax while filing the return of income. The Ld. AO has not disputed the source for the withdrawals however, has considered the purchases as bogus. From the submissions of the Ld. AR and from the materials placed before us, we find that the assessee has not claimed any expenditure with respect to purchases during the FY 2014-15 and has shown the entire purchases as stock-in-trade from AY 2015-16 to 2019-20. Further, during the Assessment Year 2019-20, the assessee has written off the stock worth Rs. 17,71,40,617/- as it was damaged due to wetness. The Ld. AR also demonstrated that these written off of stock-in-trade of Rs. 17,71,40,617/- has not been i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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