9911796707
TMI Blog2013 (1) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... firm and thus used for the purpose of business - interest paid thereon is allowable under section 36(1)(iii) - Decided in favor of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Mohan Swaroop Jain, Proprietor M/s. Jain Paper Mart. The statement was recorded on 04.12.2010. The A.O. after considering statement of Shri Ram Gopal Sharma and Mohan Swaroop Jain noticed that Shri Ram Gopal Sharma is an employee of the brother of the assessee and not an independent trader. The A.O. found that the assessee has failed to establish the genuineness and correctness of the purchases amounting to ₹ 38,68,137/- from M/s. Gopal Enterprises, therefore, books of account of the assessee was rejected invoking section 145(3) of the Act. The A.O. treated the entire purchase of ₹ 38,68,137/- as bogus purchase and made addition of the said amount. 4. The assessee made submission on merit as well as on alternate submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The A.O. held that the purchase was bogus as payment was made only for ₹ 7,50,000/- and the entire balance amount was shown as outstanding. Shri Ram Gopal Sharma in his first statement dated 25.10.2010 admitted that he has sold the goods to the assessee and the same has been declared in the Sales Tax return but in the second statement dated 11.11.2010 he denied about the outstanding amount of ₹ 31,18,137/- and also shown ignorance about the Sales Tax return filed by him. It is admitted fact that M/s. Gopal Enterprises has paid the Sales Tax on the said goods and the same has been declared before the Sales Tax Authority by filing Sales Tax returns. The A.O. made addition on surmises that Shri Ram Gopal Sharma is employee of the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t angle accepting the Revenue's contention that the assessee did not make purchases from M/s. Gopal Enterprises and as held as above that there is a positive evidence that purchases was in fact made, may be from other parties than M/s. Gopal Enterprises, in such circumstances, the formula laid down by the I.T.A.T. Ahmedabad Bench in the case of Vijay Protein (supra) is applicable. If we consider the formula that the assessee may get benefit of grey market, the assessee has already surrendered ₹ 5,00,000/-, may be on account of commission and other expense which can also be treated as profit of grey market. Therefore, addition to the extent of ₹ 5,00,000/- is warranted. In the light of the above discussion, we confirm the additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the addition made by the A.O. 10. We have heard the ld. Representatives of the parties and records perused. Submissions of the assessee are that the assessee has raised loan of ₹ 8,00,000/- from Smt. Renu Jain on 31.03.2005. A loan of ₹ 13,00,000/- was further received. The loan was transferred to the partnership firm M/s. Jain International. Thus, the loan was used for the purpose of business. The assessee is proprietor of M/s. Jain international, Agra and partner in M/s. Jain International, Noida. The assessee has maintained separate sets of books of account in individual and proprietary concerns. ₹ 8,00,000/- was transferred on 31.03.2005 to the account of Shri Shanti Swaroop Jain, proprietor-ship capital account by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of books of account for proprietary concern and partnership concern separately. On consideration of personal sets of books of account, it is admitted position of the fact that the assessee has taken loan from Smt. Renu Jain and the balance as on 31.03.2008 was ₹ 20,75,000/-. The said amount has been neither deposited in proprietary concern M/s. Jain International, Agra nor in M/s. Jain International, Noida. Both these concerns are business concerns of the assessee, therefore it is established and apparent fact that the borrowed fund was utilised for the purpose of business. As regards other items in the Balance Sheet, in the light of the order of I.T.A.T. Agra Bench in various cases including ITA Nos.439 & 440/Agr/2011 in the case o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
