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TMI Blog2017 (6) TMI 955X X X X Extracts X X X X X X X X Extracts X X X X ..... utation of premium was that in case of M/s.Jhaveri Polymers also the sales were not reflected in the accounts of the said firm. The Tribunal, however, noted that such sales were later on reconciled. If that be so, in our opinion, there was no other basis for the Tribunal to confirm the premium on such sales. We may recall that M/s.Jhaveri Polymers was not one of the firms, who was mentioned in the documents seized by the revenue on which Shri J.L.Mehta had made his remarks. In the result, the question is answered partly in favour of the assessee and partly in favour of the revenue. Insofar as the sale of 11.61 Lacs made to M/s.Jhaveri Polymers is concerned, premium paid at the rate of 27.5% would be deleted from the additions made by the Assessing Officer and confirmed by the Tribunal. Remaining additions are confirmed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of ₹ 6.65 Lacs when divided by two would come to ₹ 3.32 Lacs, the share of J.L.Mehta in the partnership, which according to the notings was to be paid to him. The Assessing Officer verified whether the sales worth ₹ 27.69 Lacs were reflected in the accounts of the purchasers or not. The Assessing Officer issued summons to four of them and verified their books of accounts. The Assessing Officer found that in case of none of these parties the sales were appearing in the books of accounts. 7. The Assessing Officer also noted that the assessee had showed sales of a total of ₹ 11.61 Lacs to one M/s.Jhaveri Polymers Pvt. Ltd. of Baroda. During the search and seizure operation in case of M/s.Jhaveri Polymers, it was found that the said sales were not reflected in its books of account. The Assessing Officer further noticed that during search at the office premises of Shri J.L.Mehta, a partner of the firm, pay-inslips of bank account no.14039 of Union Bank of India, Alkapuri Branch, Baroda, which was in the name of M/s.Devidayal Plastic Industries of Bombay were found and seized. The Assessing Officer noted that cash deposits of ₹ 99.90 Lacs spread over t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of ₹ 1.15 Crores which he had come to compute as under:- Sr. No. Name of the party in whose name bills have been prepared. Amount 1 M/s.Arihant Thermowares P. Ltd. 4,90,000 2 M/s Anup Plastic 4,11,000 3 M/s Syntho Plast 4,05,000 4 M/s Plas Colour 4,05,000 5 M/s. Jhaveri Polymers P. Ltd. 11,61,000 6 M/s.Devidayal Plastics Ind. P. Ltd.(sister concern of assessee) 71,15,000 7 M/s Fozdar Industries 1,42,612 8 M/s Flovin Plastics 1,26,608 9 M/s Hi-tech Plastics 68359 10 M/s R.M.P. Plastopach 12,00,000 115,24,579 10. The assessee carried the matter in appeal. CIT (Appeals) allowed the appeal in entirety. He was of the opinion that additions could not be made on the basis of loose papers. He accepted the explanation of Shri Jagdish Mehta in his statement that word "cash" is used in his notings in cases where sales are made against cheques and drafts i.e. in cases where consideration can be realized immediately as against credit sales where payment would be received later. Regarding Shri Balkrishna Devidayal, he was of the opinion that bank account was opened by the concerned firm and it was found at the instance of the assessee firm was not tru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3). 15.1 Counsel referred to the decision of this Court dated 20.7.2016 rendered in Tax Appeal No.207 of 2008 and allied matters in the case of The Commissioner of Income Tax-IV v. Ramanbhai B. Patel to contend that on retracted statements, no reliance can be based. 16. Counsel further submitted that there was no evidence of the assessee having received any cash premium on the sale made. The Assessing Officer proceeded solely on the basis of conjectures and surmises. 17. On the other hand, learned counsel Shri Parikh for the revenue submitted that the Assessing Officer and the Tribunal have examined notings at length. The additions are not based solely on the seized loose documents but on the basis of weighty material. The notings were made by the partner of the firm. He confirmed his handwriting and offered no explanation for the figures mentioned and the amounts contained therein in terms of Section 132-4A, therefore, a presumption arise which the assessee failed to dislodge. 18. We will refer to sales in case of M/s.Jhaveri Polymers separately. For the time being, if we address the issue of additions in connection with the remaining sales, it emerges from the record that d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayal, who had not appeared for crossexamination, the Tribunal noted that subsequently crossexamination was offered and carried out, but no contrary evidence came on record. This is, therefore, not a case where the additions are made on the basis of mere loose papers seized during search. It is a case where the documents seized during search contained entries made by the partner of the firm admittedly in his own handwriting and contained reference to the cash receipts. His explanation was simply either non-existent or not acceptable. 21. With respect to M/s.Jhaveri Polymers, however, the case stands on a slightly different footing. The primary reason for adding such sales for computation of premium was that in case of M/s.Jhaveri Polymers also the sales were not reflected in the accounts of the said firm. The Tribunal, however, noted that such sales were later on reconciled. If that be so, in our opinion, there was no other basis for the Tribunal to confirm the premium on such sales. We may recall that M/s.Jhaveri Polymers was not one of the firms, who was mentioned in the documents seized by the revenue on which Shri J.L.Mehta had made his remarks. 22. In the result, the question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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