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TMI Blog2018 (1) TMI 1527X X X X Extracts X X X X X X X X Extracts X X X X ..... these items is regularly maintained by the assessee for excise purpose and the same duly checked by the concerned excise authorities is more reliable to ascertain the exact discrepancy - HELD THAT:- As urged that since the said record maintained for excise purpose could not be produced by the assessee either before the A.O. or before the Ld. CIT(A), the matter may be sent back to the Assessing Officer for giving the assessee an opportunity to produce the same for verification. Since the learned DR has not raised any objection in this regard, we set aside the impugned order of the Ld. CIT(A) on this issue and restore the matters to the file of the A.O. for deciding the same afresh after giving the assessee an opportunity to produce the relevant stock record maintained for excise purpose. Bogus purchases - undisclosed investment of the assessee under section 69B - GP estimation - HELD THAT:- Addition on account of unexplained investment in stock as made by the A.O. under section 69B thus is based on presumption and the same cannot be sustained. In our opinion, the only presumption that can be reasonably drawn in the absence of anything brought on record to show that the quantity pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y exceptional circumstances as specified under Rule 6DD of Income Tax Rules 1962 for making such payments, he made a disallowance of ₹ 76,02,027/- under section 40(a)(3) of the Act. On appeal, the Ld. CIT(A) confirmed the said disallowance made by the A.O. 5. We have heard the arguments of both the sides and also perused the relevant material available on record. It is observed that this issue involved in the case of the assessee relating to disallowance under section 40(a)(3) is squarely covered in favour of the assessee by the decision of this Tribunal rendered in assessee s own case for A.Y. 2008-09 vide its order dated September 16, 2016 passed in ITA No. 2858/Kol/2013 wherein a similar issue has been decided by the Tribunal vide paragraph no. 6 to 11 of its order as under: 6. At the outset, we may state that there is no dispute in respect of the genuineness of the transactions made by the assessee. So also the identity of the receiver of' the funds is not in dispute. Payments made into the Bank account of the wholesale licensee or the appointment of M/s. IFB Agro Industries Limited, Durgapur, Burdwan by the State Government Notification dated 04.09.2006, stands admit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation prescribed to such notification. We, therefore, can safely conclude that the payments made to M/s. IFB Agro Industries Ltd., Durgapur for all practical purposes are the payments to be reached to the State Government and once this is so, the said wholesale licensee shall be construed as an agent of the State Government. We, therefore, can safely conclude that once such payments are made to the credit of IFB Agro Industries Ltd., Durgapur, the source and destination of such funds cannot be doubted. Therefore, the provision of section 40A(3) is not frustrated by the assessee making payments into the account of M/s. IFB Agro Industries Ltd., Durgapur maintained in the State Bank. 9. Commercial expediency in relation to the application of section 40A(3) is well recognized by the various courts vide in the cases as under: (i) Attar Singh Gurmukh Singh vs ITO reported in (1991) 191 ITR 667 (SC) (ii) CIT vs CPL Tannery reported in (2009) 318 ITR 179 (Cal) (iii) CIT vs Crescent Export Syndicate in ITA No. 202 of 2008 dated 30.07.2008 (Calcutta High Court) (iv) Anupam Tele Services vs ITO reported in (2014) 43 taxman.com 199 (Guj) (v) Ashok Mondal vs ITO in ITA No. 873/Kol/2012 (Ko ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said company but the quantity purchased in the quantitative details was shown by the assessee only as 114900 Ltrs. showing a discrepancy of 2700 Ltrs. Since the assessee could not offer any satisfactory explanation in respect of these two discrepancies pointed out by the A.O. in the stock of 60UP category of country spirit aggregating to 3093.80 Ltrs., the A.O. treated the same as unexplained closing stock of the assessee of 60UP category of country spirit and added the value thereof amounting to ₹ 1,55,742/- to the total income of the assessee under section 69B of the Act. Similarly, further addition of ₹ 82,804/- was made by the A.O. on account of discrepancy of ₹ 5606.2 Ltrs. found in respect of 80UP country liquor by treating the same as unexplained stock of the assessee under section 69B. On appeal, the Ld. CIT(A) confirmed both these additions made by the A.O. 9. We have heard the arguments of both the sides and also perused the relevant material available on record. The learned counsel for the assessee has not disputed the fact that there are some discrepancies in the stock record maintained by the assessee in respect of 60UP and 80UP category of country ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irmed by the Ld. CIT(A) on account of purchases made from M/s. IFB Agro Industries Ltd. outside the books of account by treating the same as undisclosed investment of the assessee under section 69B of the Act. 14. As per the information gathered directly by the Assessing Officer from M/s. IFB Agro Industries Ltd., Panagarh, Burdwan, the said party had made a total sale of ₹ 57,72,398/- to the assessee during the year under consideration. The assessee in its books of accounts however had shown purchases made from the said party only to the tune of ₹ 51,84,704/-. Similarly, it was also found by the A.O. that purchases made by the assessee from M/s. IFB Agro Industries Ltd., City Centre, Durgapur were not accounted for in its books of account to the extent of ₹ 8,12,535/-. Since the assessee could not offer any satisfactory explanation in this regard, the A.O. treated the unaccounted purchases made by the assessee aggregating to ₹ 14,00,229/- as its undisclosed stock and made the addition of ₹ 14,00,229/- to the total income of the assessee under section 69B of the Act. On appeal, the Ld. CIT(A) confirmed the said addition made by the A.O. 15. We heard th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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