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TMI Blog2010 (2) TMI 990X X X X Extracts X X X X X X X X Extracts X X X X ..... ained expenditure under section 69C of the Income-tax Act. The assessee is engaged in purchase of grey cloth and after dyeing from local dyeing houses export the finished cloth from Surat. The assessee s garment division is situated at Coimbatore. In the year the total turnover is Rs. 4,42,05,851, the assessee has shown gross profit of Rs. 75,94,913 at 17.18 per cent. as against the preceding year s turnover Rs. 3,09,15,433 on which the gross profit was earned at Rs. 33,53,029 at 10.85 per cent. Therefore, the Assessing Officer has made the inquiry. On perusal of the record it was found that there was an outstanding credit balance of Rs. 1,46,45,884 in the name of Ayyappas Knits Export. The scrutiny of the assessment was made in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 2003-04 (Rs.) Purchase made from Ayyappas Knits Exports 0 Payment as per ledger 60,00,000 Payment as per bank statement 60,00,000 From the books of Ayyappas Knit Exports : Assessment year 2003-04 (Rs.) Sales made to Abhishek Exports. 71,54,248 Payment as per ledger 88,51,613 Payment as per bank statement 88,51,613 account squared up. It was also mentioned in the order of preceding year that facility to cross examine Shri G. K. Nair, Prop. of M/s. Ayyappas Knit Exports was offered technically who was the assessee s witness. The assessee refused to cross examination of Shri G. K. Nair. At ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... current year s books as per the books of Ayyappas Knit Export is concerned there is actual payment of Rs. 60 lakhs by account payee cheque. Therefore, rest of the payments is shown as receipt in books of Ayyappas Knits Export. If the party shows the sales and payments according to his convenience assessee is not concerned and therefore, second show-cause notice was given and after hearing the Assessing Officer has made the addition of Rs. 71,54,248 under section 69C of the Act and in respect of receipt of Rs. 88,51,613 shown in the books of Ayyappas Knit Export against the payment shown of Rs. 60 lakhs. Therefore, the difference of payment of Rs. 28,51,613 not reflected in the books of the assessee is considered to be unexplained and treat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . of Ayyappas Knit Export has confirmed the transactions in his statement given on oath under section 131 hence the Commissioner of Income-tax s view is wrong. The Assessing Officer has not disbelieved the purchases of Rs. 71,54,248 from Ayyappas Knit Export. On the contrary whole concern was to establish the fact that the assessee has made purchases from M/s. Ayyappas Knit Export which was not reflected in the books of account of the assessee hence has rightly treated as unexplained expenditure. The Commissioner of Income-tax (Appeals) following the confirmation letter has given more importance to statement recorded under section 131. A statement given under the statutory provision of the Act cannot be treated as false on the basis of such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Knit Export confirmed the assessee s account in the books but also confirmed as its account in the books of the assessee. Therefore, this confirmation in respect of the claim of the assessee as no purchase was made from Ayyappas Knit Exports during the year and secondly the total payment made to M/s. Ayyappas Knit Export during the year was explained and this is only to the extent of Rs. 60 lakhs and not Rs. 88,51,613 claimed by Shri G. K. Nair in his statement recorded in the course of the assessment proceedings for the assessment year 2002-03. Therefore, the Commissioner of Income-tax (Appeals) has rightly deleted the addition. We have heard the rival contentions of both the parties. We find that there is no basis or justification for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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