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TMI Blog2014 (7) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... clared in the returns and the statement of accounts furnished along with it. The Assessing Officer, therefore, rejected the loss as returned by the assessee and in our view, rightly so. Increase in sundry creditors and unsecured loans – Held that:- The AO also made additions on account of increase in sundry creditors and unsecured loans - assessee could easily obtain confirmation of outstanding balances from third parties, however, no confirmation was supplied to the AO - The scale of operations of the assessee during the year was not materially different from that in the preceding year, and in the circumstances a significant increase in the sundry creditors and unsecured loans was clearly unexplained and in the circumstances the Assessing Officer added the same u/s 68 of the Act - AO also added the increase in the account of the partners - The assessee attempted to explain the same by stating that the additions were from the funds withdrawn by the partners – the individual accounts of the partners which could have substantiated claim were, apparently, not produced before the AO - the explanation was also not accepted – thus, there was no infirmity in the order – Decided against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer observed that while the opening stock of Walnut Kernels was valued at ₹ 173.81 per kg., the closing stock had been valued at ₹ 44.53 per kg. The Assessing Officer also noticed that there was a shortage of 23,817.516 kgs of Kernels. During the previous year relevant to the Assessment Year 2000-2001, there was an increase in sundry creditors to the extent of ₹ 15,811,668/- and increase an unsecured loans to the extent of ₹ 31,89,455.25. There was addition in the partners capital accounts to the extent of ₹ 6,46,109/-. The Assessing Officer disallowed the losses claimed and made additions under Section 68 of the Act with regard to the addition in the capital accounts of partners as well as on account of increase in unsecured loans and sundry creditors. In addition, the Assessing Officer also initiated penalty proceedings under Section 271(1)(c), 272A(1)(c), 271D and 271E of the Act. 2.3. The disputes between the partners of the assessee were, apparently, settled and a Memorandum of Understanding dated 26.02.2005 was executed. Accordingly, a compromise decree was passed by this Court on 16.09.2005 in CS(OS) No.981/2001. 2.4. Thereafter, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision, any notice under any provision of this Act would be deemed to have been served on an assessee who has appeared in the proceedings without raising any objection before the completion of the assessment. It was submitted that the period in question in the present matter was prior to 01.04.2008 and in the absence of that provision, it could not be deemed that the petitioner was precluded from raising the objection that it had not received the notice as prescribed 5. The learned counsel for the petitioners referred to the acknowledgement of dispatch of notice by speed post and contended that the address as printed indicates that the notice was sent to an address in New Delhi whereas the office of the assessee firm was in Delhi. It was next contended in accordance with Section 282(2)(a), a notice to a firm was required to be addressed to the partners and in the present case, there was no evidence that the notice had been so addressed. On the contrary, it was not disputed that the notice was addressed to the firm and not its partners. 6. The learned counsel for the petitioner also stated that the Assessing Officer had erred in making additions on account of unexplained cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments on one ground or the other. During the proceedings before the Assessing Officer, the assessee did not dispute the contents of any of the letters/questionnaire, although, the representative of the assessee did enter appearance. The fact that the notice dispatched on 30.10.2001 had been duly received by the assessee on 31.10.2001 was not disputed or controverted by the assessee during the assessment proceedings. 10. The dispute with respect to non receipt of notice was raised for first time in the revision petition filed on 16.01.2007; more than three years after the assessment order, dated 28.02.2003, had passed. At that stage, obtaining any evidence from the postal Authorities was not possible. The delay on the part of the assessee in raising the dispute cannot be permitted to prejudice to the revenue. 11. The CIT has considered the aforesaid facts and concluded that the notice dispatched on 30.10.2001 had been received by the assessee on 31.10.2001, as the statement that the assessee had received the notice in question on 31.10.2001, had not been objected to by the assessee before the Assessing Officer. The Commissioner also noted that there were several other notices ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 282 was substituted by the Finance (No.2) Act, 2009 w.e.f. 01.10.2009. Prior to the substitution, the said Section read as under:- 282.Service of notice generally.-(1) A notice or requisition under this Act may be served on the person therein named either by post or as if it were a summons issued by a court under the Code of Civil Procedure, 1908 (5 of 1908). (2) Any such notice or requisition may be addressed (a) in the case of a firm or a Hindu undivided family, to any member of the firm or to the manager or any adult member of the family ; (b) in the case of a local authority or company, to the principal officer thereof ; (c) in the case of any other association or body of individuals, to the principal officer or any member thereof ; (d) in the case of any other person (not being an individual), to the person who manages or controls his affairs. 14. A plain reading of the opening words of Sub-section 2 of Section 282 indicates that the same only enables a notice to be addressed in the manner as specified in various clauses of Section 282(2); In terms of clause (a), a notice may be addressed in case of a firm to any member of the firm. This provision canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imate the income based on the operational results and trends of the preceding years. The petitioners had produced a statement of comparison between the trading result and profit and loss during the period relevant to the Assessment Year 1999-2000 and 2000-01. The said statement indicates that there was no major variance in sales and purchases made during the years 1999-2000 2000-01.Whereas, the assessee made sales aggregating ₹ 7,70,38,592/-in the previous year ending 31.03.1999, the sales made during the previous year ended 31.03.2000 (AY 2000-01) were to the tune ofRs. 8,06,92,897/-. Similarly, the purchases made during the year ended 31.03.1999 aggregated ₹ 6,18,74,488/- and the purchases made during the previous year ended 31.03.2000 added up to ₹ 6,92,07,695/-. Whilst the assessee had made a gross profit of ₹ 1,42,13,364/- (i.e. disclosed a gross profit margin of about 18.22% ) for the Assessment year 1999-2000 (i.e. previous year 1998-1999), the gross loss for the period in question ( Assessment Year 2000-2001) was ₹ 2,42,62,900/-. This variance in profit was not in conformity with the profile of the final accounts of the preceding year. 17. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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