9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (4) TMI 757 - AT - Income TaxBogus purchases - non-service of notice u/s 133(6) to the suppliers - HELD THAT - CIT(A) after considering all these facts has recorded categorically finding of the fact that no contrary evidence has been brought on record by the AO to prove that purchases from above two parties are non-genuine except non-service of notice u/s 133(6). On the other hand, the assessee has filed complete details along with stock register execise audit report and transportation documents to prove that these purchases are genuine. Therefore, there is no error in the findings recorded by the Ld. CIT(A) in deleting the additions towards 25% of unverifiable purchases. Hence, we reject the ground taken by the Revenue. Unexplained cash credit u/s 68 - none of the parties were responded in response to summons issued u/s 131 - HELD THAT - Where the assessee has taken loans from genuine parties which were verified in the previous financial year, but for changed circumstances, the AO has taken different view to make additions u/s 68 then no additions could be made when the credit has been brought out from previous financial year. In this case, it is undoubtedly proved that those companies are hawala operators involved in providing accommodation entries. When facts gathered during the course of assessment proceedings clearly proves that these are accommodation entry providers, the ratio laid down by Hon ble Delhi High Court USHA STUD AGRICULTURAL FARM LTD. 2008 (3) TMI 91 - DELHI HIGH COURT cannot be applied to delete additions. Accordingly, we are of the considered view that Ld. CIT(A) was erred in deleting additions made towards loans from M/s Chandimata Management Pvt. Ltd. and M/s Max Worth Project Pvt. Ltd. Hence, we reverse findings of the CIT(A) and sustained additions made towards loan taken from above two companies. DR failed to controvert the findings recorded by the CIT(A) in light of evidences filed by the assessee in respect of parties. On the other hand, AR for the assessee has also failed to file further evidence in respect of three parties, where the CIT(A) has confirmed addition to justify loans taken from the above parties. Therefore, we are of the considered view, there is no error in the findings recorded by the CIT(A) in respect of unsecured loans taken from these parties and accordingly we are inclined to upheld the findings of the CIT(A) and rejected ground taken by the Revenue as well as the assessee. Adhoc disallowance of certain expenses - HELD THAT - CIT(A) has recorded categorical finding that the assessee neither submitted bills and other evidences nor address of person to whom such payments were made. Further, the assessee failed to prove above expenses are incurred wholly exclusively for the purpose of business of the assessee. Before us no change in facts. The assessee has failed to provide any evidence to prove that findings of facts recorded by the Ld. CIT(A) are incorrect. CIT(A) was right in confirming additions made by AO towards ad-hoc disallowance of expenses. Hence, we are inclined to uphold findings of the CIT(A) and reject ground taken by the assessee.
Issues Involved:
1. Addition of ?3,43,000/- as unexplained Cash Credit and interest accrued thereon. 2. Disallowance of expenses amounting to ?1,00,021/-. 3. Deletion of addition of ?2,30,16,415/- on account of discrepancy of purchases. 4. Deletion of addition of ?1,56,77,456/- for unexplained cash credit and unproved loans under Section 68 of the Income Tax Act, 1961. Issue-wise Detailed Analysis: 1. Addition of ?3,43,000/- as unexplained Cash Credit and interest accrued thereon: The assessee contended that the Learned CIT(A) erred in confirming the addition of ?3,43,000/- as unexplained Cash Credit and the interest accrued thereon. The Tribunal examined the evidence provided by the assessee, including confirmation letters from the creditors, their ITR copies, bank statements, and financial statements. The Tribunal upheld the CIT(A)'s decision to confirm the addition where the assessee failed to provide sufficient evidence, specifically for creditors Sonal S. Agarwal, Suresh Reengusia, and Naresh Jain. The Tribunal found no error in the CIT(A)'s findings and rejected the assessee's ground. 2. Disallowance of expenses amounting to ?1,00,021/-: The AO disallowed 10% of expenses incurred under various heads, including conveyance and other expenses, due to the lack of supporting bills and evidence, and the fact that a significant portion of these expenses was incurred in cash. The assessee argued that the expenses were supported by proper evidence. However, the Tribunal found that the assessee failed to submit the necessary bills and other evidence to substantiate the expenses. The Tribunal upheld the CIT(A)'s decision to confirm the ad-hoc disallowance of expenses, as the assessee did not provide any new evidence to contradict the findings. 3. Deletion of addition of ?2,30,16,415/- on account of discrepancy of purchases: The AO added 25% of purchases from M/s Hindustan Copper Ltd. and M/s Sterlite Industries (I) Ltd. as unverifiable purchases due to the non-service of notice under Section 133(6) and the failure of the assessee to prove the use of the purchased material in its business. The CIT(A) deleted the addition, finding that the assessee provided sufficient evidence, including confirmations, stock registers, and transportation documents, to prove the genuineness of the purchases. The Tribunal agreed with the CIT(A), noting that the suppliers were reputed companies, including a Government of India company and a public listed company, and the non-service of notice under Section 133(6) was not sufficient to discredit the purchases. The Tribunal rejected the Revenue's ground and upheld the deletion of the addition. 4. Deletion of addition of ?1,56,77,456/- for unexplained cash credit and unproved loans under Section 68 of the Income Tax Act, 1961: The AO made additions for unsecured loans from various parties, including M/s Pushpanjali Commotrade Pvt. Ltd., M/s Radiant Merchandise Pvt. Ltd., M/s Chandimata Management Pvt. Ltd., and M/s Max Worth Project Pvt. Ltd., based on the failure to verify the genuineness of the transactions and the creditworthiness of the creditors. The CIT(A) partially allowed the appeal, deleting some additions but confirming others. The Tribunal reversed the CIT(A)'s decision for loans from M/s Pushpanjali Commotrade Pvt. Ltd. and M/s Radiant Merchandise Pvt. Ltd., finding that these were paper companies providing accommodation entries, as evidenced by the investigation reports and statements. The Tribunal upheld the AO's additions for these loans. For other unsecured loans from individuals, the Tribunal upheld the CIT(A)'s decision to delete the additions, as the assessee provided sufficient evidence to prove the identity, genuineness, and creditworthiness of the creditors. Conclusion: The Tribunal dismissed the assessee's appeal and partly allowed the Revenue's appeal, upholding the additions for loans from paper companies and confirming the ad-hoc disallowance of expenses. The Tribunal found no error in the CIT(A)'s deletion of additions for genuine purchases and unsecured loans from individuals with sufficient evidence. The order was pronounced in the open Court on 01/03/2019.
|
