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TMI Blog2016 (6) TMI 1078X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. to add some GP on the unrecorded purchases on the grounds that the assessee company might have earned profit by selling the purchases out of books. In our considered view, interest of justice will be best served if all the issue of additions made by the A.O. are to be set aside to the file of the AO for de novo determination of all the issues on merit after taking into account the relevant evidences and explanations submitted by the assessee company with respect to the purchases made by the assessee company keeping in view of the stock movement vis-à-vis sales made by the assessee company and then arrive at the actual differences which remained after quantitative reconciliation of the stock including examination and verification of genuineness of the purchases made from sister concern Maklai Timber Mart. - Decided in favour of assessee for statistical purposes. - I .T.A. No. 7479/Mum/2010 - - - Dated:- 3-6-2016 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : None For The Revenue : Shri Chandrajit Singh(D.R.) ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the assessee company, being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had made total purchases of ₹ 67,21,490/- from various parties and hence there was a difference of ₹ 12,62,184/- in the purchases shown as per the P L account and the details of the sundry creditors submitted. The assessee company was asked to explain the difference and in reply the assessee company submitted that there is a typing error which has occurred as the miscellaneous purchases should be ₹ 28,29,668/- instead of ₹ 38,05,716/-. The assessee company furnished the following details:- (a) Ambika Timber Mart ₹ 5,93,392/- (b) Other Misc. purchases ₹ 4,36,276/- (c) Maklai Timber Mart ₹ 18,00,000/- The assessee company, hence, submitted that earlier there was a typing error while submitting the details and the total purchases made was ₹ 55,59,306 only and not ₹ 67,21,490/- as shown in the statement because the miscellaneous purchases were wrongly shown as ₹ 38,05,716/- instead of ₹ 22,36,276/-. The A.O. considered the submission of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. Similarly, the A.O. observed that the assessee company has debited an amount of ₹ 1,51,974/- towards bank interest on cash credit facility availed with the Saraswat Co-Op. Bank, Prabhadevi branch. It was seen by the A.O. from the details filed that the assessee company obtained OD facility from Saraswat Co.Op. Bank which commenced on 28th September, 2006 and the amount of ₹ 18,00,000/- was transferred to the sister concern of the assessee company i.e. M/s Maklai Timber Mart on 28th September, 2006 directly and the CC limit of the said firm Maklai Timber Mart was closed. It was observed by the AO from the ledger account that the assessee company has made purchases from Ms/ Maklai Timber Mart only on 31st March, 2007 which indicated that the bank OD facility had been used by the sister concern M/s Maklai Timber Mart and for this facility the assessee company incurred interest expenditure and the same was claimed in the P L account. The assessee company was show caused by the AO as to why bank interest on cash credit of ₹ 1,51,974/- should not be disallowed and added to the total income of the assessee company as the funds have not been used for the purposes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee company has been duly explained but still the addition has been made was the contention of the assessee company. The assessee company submitted that the total purchases as per the books of account is ₹ 55,59,306/- and the same has been debited in P L account. The source of the said purchases is explained and there is no question of any unexplained purchases u/s 69 of the Act. The assessee company submitted that the addition of ₹ 11,62,184/- is patently wrong and unjust. The learned CIT(A), however, rejected the contentions of the assessee company and observed that the A.O. disallowed the difference in purchase of ₹ 11,62,184/- which were made out of books because the purchases disclosed do not tally with the purchases claimed. Names of certain parties from whom the purchases were claimed, but their names were not effected in the list of sundry creditors and the assessee company is trying to explain it as a typing mistake. No stock register and quantitative details were maintained and as such it is not possible to verify the quantitative differences. The assessee company has shown purchase details from its sister concerns M/s Maklai Timber Mart o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 31st March, 2007 submitted to the Saraswat bank wherein the purchases of timber/plywood made by the assessee company in March, 2007 were to the extent of ₹ 15,33,241/- while as per ledger account verification the purchases made by the assessee company in March, 2007 were different i.e. ₹ 27,77,331/-. We find that the purchase details from its sister concerns M/s Maklai Timber Mart on 31-03-2007 amounting to ₹ 17,38,951/- while the bank loan vide OD of ₹ 18 lakhs was transferred to the sister concern on 28th September, 2006 which has been claimed as against the purchases made on the last day of March, 2007 and in support the assessee company has filed copies of delivery challans which are not signed by any person. The assessee company submitted that the difference of ₹ 12,62,184/- in the purchases shown as per the P L account and the sundry creditors was due to the typing error which has occurred as the miscellaneous purchases should be ₹ 28,29,668/- instead of ₹ 38,05,716/-. The assessee company is trying to justify the above differences due to the typing error. We have also found that the learned CIT(A) has not given any notice to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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