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TMI Blog2024 (8) TMI 936X X X X Extracts X X X X X X X X Extracts X X X X ..... unaccounted speed money payments, cannot be made when the assessee has not claimed the expenditure in the books of accounts? iv. Whether the ITAT has erred in holding that the source for said payments is withdrawals from bank accounts without appreciating that if it had been so, the payments also would have been accounted in the books of accounts in some form or other? v. In the facts and circumstances of the case, whether the ITAT has erred in deleting the addition made towards difference in purchases under Section 69C amounting to Rs. 5,67,68,336/-? vi. Whether the ITAT has erred in not considering that the assessee has furnished a different purchase figure of Rs. 31,09,77,347/- for the period till the date of search as against the figure of Rs. 36,77,45,683/- disclosed by the assessee in the Settlement Application furnished by the assessee for the Assessment Years from 2003-2004 to 2008- 2009 which is almost matching with the purchase figure for the period of Rs. 36,79,45,683/- adopted by the Assessing Officer and that the assessee has not reconciled this discrepancy? 2. The dispute in the present appeal arises out of the search conducted by the Income Tax Department on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee vide para 12 of the written submissions stated that the assessee is not aware of the data set out at page 5 of the assessment order. The date mentioned in page 5 of the assessment order is reproduced as below: Description Amount (Rs.) For the F.Y. Ending 16.10.2008 (date of search) Raw material Packing material 31,87,05,659 + 4,92,40,024 = 36,79,45,683 ......(a) After search till 31.03.2009 As per purchase vouchers produced by assessee 19,83,98,625 .......(b) Shown in P&L account filed along with R/I 50,93,75,389 .......(c) Difference (a) + (b) - (c) 5,69,68,520 ii. In this connection, it is submitted that the difference in the quantum of purchases as per the Profit & Loss Account filed as per the Return of Income and the quantum of purchases made during the periods "from 01.04.2008 to till the date of search (16.10.2008)" and "from 17.10.2008 to 31.03.2009" was treated as unexplained investment in purchases. (A copy of the Profit & Loss Account filed by the assessee along with the ROI for the Assessment Year 2009-2010 is enclosed herewith for ready reference as per Annexure-2). iii. Further, it is submitted that during the course of the post sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on this issue unless source of information is given to the assessee. However, the assessee filed two trading accounts for the periods "from 01.04.2008 to 20.10.2008" and "from 21.10.2008 to 31.03.2009" showing details of purchases, instead of furnishing trading accounts for the required periods "01.04.2008 to 16.10.2008 (Date of search)" and "17.10.2008 to 31.03.2009". (A copy of the assessee's letter dated 30.12.2010 is enclosed herewith for ready reference as per Annexure-4). As seen from the Trading Account for the period from 21.10.2018 to 31.03.2019 filed by the assessee, the total of purchases works out to Rs. 14,13,38,945/- as noted below: Raw Material :: Rs. 6,84,51,080 Packing Material :: Rs. 1,80,94,493 Excise Duty :: Rs. 2,82,24,430 Direct Expenses :: Rs. 2,65,68,942 Rs. 14,13,38,945 But, as per the list of invoices furnished by the assessee, the value of purchases for the period from 16.10.2020 works out to Rs. 19,83,98,625. Thus, there is a difference in these two values by Rs. 5,70,59,680 (Rs. 19,83,98,625 - Rs. 14,13,38,945). This aspect also needs to be cross verified with the purchase invoices for the relevant period/books of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces, the Assessing Officer was directed to delete the additions made towards difference in stock in trade u/s. 69C of the Act. Paragraphs 16 and 17 of the Appellate Tribunal Order reads as follows:- "16. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The sole basis for the Assessing Officer to make additional towards unexplained expenditure, being difference in stock in trade at Rs. 5,69,68,520/- is on the basis of working of stock in trade as on the date of search after taking into account purchase of raw material and packing material. The Assessing Officer has worked out difference in stock in trade at Rs. 5,69,68,520/-, on the basis of total purchase of raw material and packing material up to the date of search, as per details submitted by the assessee and also purchases after the date of search and up to the end of financial year. The Assessing Officer, has considered total purchases as per list submitted by the assessee and then compared with purchases as per books of accounts of the assessee and worked out difference. The Assessing Officer, has reproduced the chart which contains the workings of diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact has been further strengthened by a letter written by ACIT, Central Circle-1(1), to the CIT(A) on 16.04.2015, where the Assessing Officer categorically admitted that there is no details available with regard to stock difference worked out by the Investigation Wing and further he has written a letter to the Investigation Wing to clarify the basis for adopting stock difference of Rs. 5,60,68,520/- in appraisal report. From the observations of the Assessing Officer in his letter dated 16.04.2015 submitted to the ld. CIT(A) during appellant proceedings, it is clear that the Assessing Officer has made additions towards difference in stock in trade/purchases as unexplained expenditure u/s. 69C of the Act, only on the basis of observation of the Investigation Wing in the appraisal report without any attempt to verify the quantification of stock difference worked out during the course of search. We further noted that, as explained by the Ld.Counsel for the assessee, the Assessing Officer did not furnish relevant basis for working out stock difference inspite the appellant made a repeated request. Even before us, the Department representative could not explain as to how said difference ..... X X X X Extracts X X X X X X X X Extracts X X X X
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