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TMI Blog2021 (4) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... ellate authority, in his final conclusion recorded a finding that during the appellate proceedings the appellant has submitted that the AO has rectified the mistake of quantum by taking gross profit @19.02% and has passed a rectification order under section 154 of the Act by taking the gross profit at 9.70%, and accordingly, this has resulted into a reduced addition of ₹ 17,20,563/- and not ₹ 33,73,722/- as made by the AO in his assessment framed under section 143(3)/147 of the Act. This means, the assessee himself has agreed in principle to the addition at the rate of 9.70% of GP. Even during the assessment proceedings, the assessee has not disputed or denied selling of products out of books of accounts without invoices. Therefore, we do not find any infirmity in the conclusion of the ld.CIT(A) to confirm the addition to the extent of 9.70% of GP to the income of the assessee on account of sales without invoice. Accordingly, his order is confirmed, and this ground of appeal is dismissed. Sham transaction - HELD THAT:- CIT(A) referred to statement recorded under section 131 on 1.5.2013 and answers given to question no.2, 5 and 6, in which they explained the modus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the addition only to the extent of ₹ 2,79,660/- which was remained unexplained. After perusal of the aforesaid facts and findings of the ld. CIT(A) we consider that ld. CIT(A) has rightly restored the issue to the extent of ₹ 69,06,808/- to the file of Assessing Officer as per the claim made by the assessee for verification as the same was shown as income for F.Y. 2011-12 with direction to delete the same if it is found correctly reported by the assessee. In respect of remaining amount of ₹ 2,79,660/- the assessee has neither explained before the lower authorities nor furnished any explanation during the course of appellate proceedings before us, therefore, we do not find any infirmity in the decision of ld. CIT(A). - ITA No.50, 51, 52 and 53/Ahd/2018 - - - Dated:- 7-4-2021 - Shri Rajpal Yadav, Vice-President And Shri Amarjit Sinh, Accountant Member For the Assessee : Shri P.D. Shah, AR For the Revenue : Shri S.S. Shukla, Sr.DR ORDER PER AMARJIT SINGH, ACCOUNTANT MEMBER The above four appeals are by the Assessee against separate orders of the ld.CIT(A)-8, Ahmedabad of even dated i.e. 25.10.2017 passed for the above four assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f reasons for reassessment proceedings to the assessee, we are of the view that there is no merit in the contention of the assessee that reason for reopening was not furnished to him. Since it is evident from the material placed on record from the assessment record that assessee has been supplied reasons for reopening the assessment therefore the judicial pronouncements referred by the assessee of Hon ble Court of Bombay in the case of CIT Vs. IDBI Ltd. vide Tax Appeal No. 494 of 20014 and decision of ITAT Pune vide ITA No. 492/Pune/2018 are distinguishable from the facts of the case of the assessee and not applicable to the case of the assessee. In the light of the above circumstances, we do not find any justification of the contention of the assessee that no reasons for reopening of the assessment under section 147 was furnished to the assessee, and therefore, we reject this ground of appeal. 5. As regards second ground of appeal, brief facts of the case are that the assessee company is engaged in manufacturing and trading of hot-rolled steel, ingot, bright bar, fasteners etc. It has filed its return of income on 30.9.2009 declaring total income at ₹ 1,34,40,680/-, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sales would be added and not the entire amount of stock as unaccounted income of the assessee company. It was ultimately contended that merely on the basis of the show cause notice of the DGCEI, no cognizance can be taken for making addition on account of alleged suppressed sales in the case of assessee. However, the AO did not accept these contentions of the assessee. He observed that the assessee has not disputed selling of the goods out of books, and the only dispute is with regard to quantum of sales without invoice. The Assessing Officer has also considered that for unrecorded sale there must be unrecorded purchases also. Since the details of unrecorded purchases was not provided, therefore, the AO has applied the GP rate of 19.02% shown by the assessee on the unrecorded sales of ₹ 1,77,37,760/- and addition of ₹ 33,73,722/- was made to the total income of the assessee. 6. Aggrieved assessee preferred appeal before the ld.first appellate authority. Before theld.CIT(A) the assessee reiterated its submissions, the assessee has paid excise on the basis of stock valuation arrived by the DGCEI to buy peace, and the issue was challenged before the adjudicated aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and not ₹ 33,73,722/- as made by the AO in his assessment framed under section 143(3)/147 of the Act. This means, the assessee himself has agreed in principle to the addition at the rate of 9.70% of GP. Even during the assessment proceedings, the assessee has not disputed or denied selling of products out of books of accounts without invoices. Therefore, we do not find any infirmity in the conclusion of the ld.CIT(A) to confirm the addition to the extent of 9.70% of GP to the income of the assessee on account of sales without invoice. Accordingly, his order is confirmed, and this ground of appeal is dismissed. 9. In the result, appeal for the assessment year 2009-10 is dismissed. 10. Now we take the appeal for the Asstt.Year 2010-11. The grounds in this appeal read as under: 1. That the reassessment proceedings is bad in law and therefore the order passed by the learned AO is be quashed and the returned income be accepted in toto. 2. That the learned Commissioner of Income Tax(Appeals) has erred in law and facts by confirming addition of Gross Profit of ₹ 50,15,649/-and therefore the learned AO should be directed to delete the addition. 3. That the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Ltd. during the year under consideration. The AO, vide show cause notice, proposed as to why the credit amount of ₹ 26,25,000/- given by a bogus entity should not be added to the income of the assessee. In response it was submitted by the assessee that the said Vitale Bio Science Ltd. was a genuine company, and therefore, the credit given by the said company was not bogus. In order to justify the same, the assessee has filed copy of the share application form received from Vitale Bio Science Ltd., extract of the resolution of the lender, PANCARD of Vitale Bio Science Ltd. , copy of ITR for the Asstt.Year 2008-09 and copy of bank statement showing that payment made by the said company was towards share capital. However, the reply of the assessee was not found to be tenable to the AO. He dismissed the claim of the assessee on the ground that both director of M/s.Sarang Chemicals Ltd., and director the assessee company, Shri PRS admitted that M/s.Vitale Bio Science Ltd. was engaged in providing accommodation entry i.e. cheques were issued in lieu of receipt of cash. Thus, on the basis of the statement of the directors and also analysis the books of accounts the ld.AO conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the Revenue during the course of search proceedings conducted at premises of M/s.Sarang Chemicals Ltd., it revealed to the AO that M/s.Vitale Bio Science Ltd., was a paper company and engaged in providing accommodation entry. The assessee-company received a cheque of ₹ 26,25,000/- in the garb of share capital from M/s.Vitale Bio Science Ltd. and directors of both the companies admitted in a statement given under section 131 that they were entry providers giving accommodation entries after receiving cash. Assessee furnished PAN of subscriber-company, share application forms, board resolutions, copy of bank statement, etc. However the explanation adduced by assessee with regard to the creditworthiness of lender company and genuineness of transactions was not acceptable for the reasons that there was a categorical statement by both the directors to the effect that they provided accommodation entries to the assessee company. For this, the ld.CIT(A) referred to statement recorded under section 131 on 1.5.2013 and answers given to question no.2, 5 and 6, in which they explained the modus operandi of the transaction and how the accommodation entries are given. Assessee has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on in the amount of quantum of addition. Therefore, for the reasons discussed in ground no.2 of the appeal for the Asstt.Year 2009-10, the present ground no.2 in the appeal for the Asstt.Year 2011-12 also stands dismissed. 22. Now, we take the ground no. 3 of the assessee s appeal. In the ground no. 3 the assessee is aggrieved by the action of ld. CIT(A) in confirming the addition of ₹ 36,98,579/-. 23. The brief facts of the case are that during the course of assessment proceedings, the Assessing Officer observed that assessee has paid commission of ₹ 36,98,579/- to the following parties:- Sr. No. Name Amount Rs. 1. Across Y Aluminus Repersentaction(Spain) 58,824/- 1. Amrak Ltd.( British Virgin Island) 9,01,596/- 3. Ana Patrica Milan LopezfColumbia) 2,91,278/- 4. Esteem Intemational(U.A.E.) 2,46,90 1/- 5. Euoropian Mold and Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee has explained that the foreign agents have operated in their own countries and they were not having business connection in India. No income was deemed to accrue or arise in India as per the provision of section 9(1) of the Income Tax Act, 1961. Without disproving the material facts about the nature of the transactions as stated above, the Assessing Officer has disallowed the amount of payment made to the foreign parties of ₹ 36,98,579/- u/s. 40(a)(i) of the Act on the grounds that assessee has not furnished form no. 15CA and 15CB. In this regard, we have noticed that Coordinate Bench of the ITAT in similar issue in the case of Dy. CIT, Puducherry vs. Integra Software Services Pvt. Ltd. (2020) 113 taxmann.com 9 (Chennai Trib.) wherein it is held that rule 37BB of the Income Tax Rule provides for furnishing such information in form no. 15CA and 15CB. Subsection (6) of section 195 of the Act does not require the assessee to deduct tax. What is required is furnishing information in specified form, namely form no. 15C and 15CB. However, sub-section (1) of section 195 of the act requires the assessee to deduct tax at the time of the credit of such income to the accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. That the learned Commissioner of Income Tax(Appeals)has erred in law and facts by confirming the addition of ₹ 2,79,660/-.being the difference of income declared in Profit Loss Account and income shown in 26AS and therefore the learned AO should be directed to delete the said addition in full. 2- That the learned Commissioner of Income Tax(Appeals) has erred in law and facts by not deleting the addition of ₹ 69,06,808/-,being the difference of income declared in Profit Loss Account and income shown in 26AS and therefore the learned AO should be directed to delete the said addition in full. 28. Ground Nos. 1 and 2 in this appeal of the assessee are interconnected to the same issue pertaining to difference of income shown in the 26AS therefore for the sake of convenience, these two grounds of appeal of the assessee are adjudicated together as under:- 29. The fact in brief is that during the course of assessment proceedings, the Assessing Officer has noticed that third parties have deduced tax on various payments to the assessee. On verification of the detail, the Assessing Officer observed that assessee has shown less amount as its income than the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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