9911796707
TMI Blog2012 (1) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.5% of the purchases may be added to the income of the assessee. Ground of Assessee - partly allowed. Unexplained Cash Expenses - AO observed that the assessee had claimed motor car and telephone expenses, but he was not able to produce any documents to establish his claim of expenditure only for the purpose of business - HELD THAT:- Assessee has not submitted any materials to establish the genuineness of the expenditure, therefore, additions are confirmed with regard to motor car expenses, depreciation claimed on vehicles and telephone expenses. Decision against Assessee. - ITA No. 609/Ahd./2009 - - - Dated:- 13-1-2012 - SHRI BHAVNESH SAINI, J.M. SHRI A. MOHAN ALANKAMONY, A.M. Appellant By: Shri Hardik Vora, A.R. Respondent By: Shri B.L.Yadav, Sr.D.R. Order Per Shri A.Mohan Alankamony, Accountant Member : This appeal is filed by the Assessee aggrieved by the order of the ld. CIT (A)-II, Surat in Appeal No. CAS/II/245/07-08 dated 12.12.2008 for the assessment year 2005-2006 passed under section 250 r.w.s. 143(3) of the I.T. Act. 2. In this appeal, the assessee has raised five grounds, wherein ground nos.4 and 5 are general in nature and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain other unaccounted expenses or investment or household expenditure. Thus the assessee introduced his UNACCOUNTED INCOME for purchases of fabrics and later on by making payments to the bogus creditors the cash was received back by ibe., asseisee. Looking to the above facts and circumstances of the case, undersigned is of the opinion that books of account of the assessee are not correct and complete in the sense that the same does not reflect the actual status of affairs of the assessee and therefore liable to be rejected u/s 145(3) of the Act. Thus it is conclusively proved that creditors amounting to ₹ 12,86,373/- have already paid off out of undisclosed income of the assessee which is liable to be taxed. Consequently the liability to that extent has ceased and eventually the so claimed creditors are Bogus. At last, after discussing all the aspects of this matter and looking to the facts and circumstances of this case, a sum of ₹ 12,86,373/- is added back to the income of the assessee on the basis that all these creditors (list enclosed) which are merely book entries and have already been paid off in cash. Therefore, it is abundantly clear tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les 47734 18 M/s. Mahavir Silk Mills 50049 19 M/s. Maruti Textiles 27430 20 M/s. Nikita Fabrics 49324 21 M/s. Priya Textiles 37147 22 M/s. Rakhee Prints 36500 23 M/s. Ronak Fashipn 38550 24 M/s. Shabnam Textiles 45030 25 M/s. Sheev Synthetics 49687 26 M/s. Shree Gopal Synthetics 43836 27 M/s. Sonu Fashions 45123 28 M/s. Trishna Silk Mills 49453 29 M/s. Yogita Synthetics, 47268 Total 1286378 4. The assessee carried the matter before the ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such reason that the ratio of Vijay Proteins (Supra) cannot be applied to the Assessee's case, quite contrary to the plea taken by the AR. The AO's action is therefore sustained, and the addition of the sum of ₹ 12,86,373 is confirmed. 5. During the course of hearing, the ld. A.R. submitted before us that the ld. AO did not doubt the purchase made by the assessee since they were duly recorded in the stock register and accounted in the books of accounts. He further submitted that the assessee had made payments to the creditors by cheque. Since the purchase of cloth was made through agents who acted as intermediaries between the manufacturer of the cloth and the assessee, blank cheques were given to the agents, who, in turn, handed over the same to the actual sellers of the cloth. Therefore, the assessee did not have direct contact with the manufacturer of the cloths. The ld. A.R. further submitted that the AO himself has admitted for the genuineness of the purchase but has only doubted the bills to be bogus and inflated. The ld. A.R. vehemently argued that the assessee had made genuine purchases and therefore the entire amount cannot be added to his income. Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In his detailed arguments as reproduced in pages 13-14, it has been explained by the AO as to why the entire sum of ₹ 12,86,373 was to be disallowed and treated as the unexplained income/investment of the Assessee. It is for such reason that the ratio of Vijay Proteins (Supra) cannot be applied to the Assessee's case, quite contrary to the plea taken by the AR. The AO's action is therefore sustained, and the addition of the sum of ₹ 12,86,373 is confirmed . 7.1 Considering the facts and circumstances of the case and the findings of the ld. AO and following the ratio of the decision in the case of Vijay Proteins (supra) and in the cases of M/s. Bholanath Poly Fab P. Ltd. vs- ITO in ITA No.137/Ahd/2009 and M/s. Raj Exports vs- ACIT in ITA No.1827/Ahd/2005 and M/s. Sanket Steel Traders vs- ITO in ITA No.2801/Ahd/2008, relied on by the ld. A.R., we restrict the addition to 12.5% of the bogus purchase made by the assessee. Thus, 12.5% of ₹ 12,86,373/- i.e. ₹ 1,60,797/- is added to the income of the assessee instead of the addition of ₹ 12,86,373/- added by the ld. AO and confirmed by the Ld. CIT(A). The ld. AO is hereby directed to m ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
