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TMI Blog2016 (6) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... rn which was purchased by the seller for ₹ 49.01 lacs and, therefore, there was over invoicing of the purchase to the extent of ₹ 31.49 lacs. He, therefore, wanted to disallow such sum of ₹ 31.49 lacs under Section 40A(2)(b) of the Act. The attempt on part of the Assessing Officer is, thus, clearly based on change of opinion, which would simply not be permissible. - Decided in favour of assessee - SPECIAL CIVIL APPLICATION NO. 1194 of 2016 - - - Dated:- 8-6-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITIONER : MR TUSHAR P HEMANI, ADVOCATE, MS VAIBHAVI K PARIKH, ADVOCATE FOR THE RESPONDENT : MRS MAUNA M BHATT, ADVOCATE ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. (iii) The benefit derived or accrued to the assessee from such expenditure. 5. In the circumstances, the over invoicing made by the assessee ₹ 31,49,963/- meet the criteria for disallowance u/s. 40A(2)(b) of the Act. 6. In view of above facts, I have reason to believe that income chargeable to tax to the extent of ₹ 31,49,963/- has escaped assessment for A Y 2008-09 by reason of the failure on the part of the assessee to furnish the correct particulars of facts necessary for assessment. Since more than 4 years have elapsed from the end of the relevant assessment year, the cas is covered u/s. 149 r.w.s. 151 of I.T.Act. Therefore, approval to issue notice u/s. 148 may be granted, as required under proviso to Sec. 151 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hased by the said concern at a cost of ₹ 49.01 lacs. In this context, the Assessing Officer called for an explanation why the over invoicing of the purchase to the extent of ₹ 31.49 lacs should not be taxed in the hands of the assessee. The Assessing Officer under letter dated 15.12.2010, therefore, raised following query in this respect: For finalization of your assessment proceedings you are requested to file your reply/explanation as under: Home Depot P. Ltd is an associate concern of Cedar D cor Pvt Ltd. Cedar D cor Pvt Ltd, is in business of Laminates manufacturing. Home Depot P Ltd has showroom for sale of imported furniture. Investigation revealed that: Cedar D cor P Ltd. buys furniture from Durian Industries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cedar Decor Pvt. Ltd. should be taxed in the hands of purchases. I tis quite evident that both the companies and rather all the three companies are assessed to Indian Income Tax Act. If one has purchased the goods at higher cost (as alleged) the other has made profit out of it. Here in the case of M/s. Cedar Decor Pvt. Ltd. there is an enhanced profit of ₹ 31,49,963/- on which the respective tax has been offered. It is also proved beyond doubt that there is no circular transaction in the said activity. In fact there is no suppression of profit in the case of M/s. Home Depot Pvt. Ltd. by so called over invoicing of purchases. We hope the above detailed submissions alongwith explanations will be sufficient enough for your honour to c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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