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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 ..... rds first ground regarding validity of reassessment proceedings, and additional issue raised by the assessee for not supplying of reasons for reopening of the assessment, the ld.counsel for the assessee submitted that for passing an order under section 147 recording of reasons under section 148 and communicating the same to the party concern is mandatory. The assessee is entitled to be supplied with the reasons in case he wants to challenge the validity of notice issued under section 148 of the Act. In the present case, the assessee was not given a copy of reasons recorded for reopening of the assessment. During the hearing on 25.1.2021, the ld. Sr. DR had expressed doubt about the veracity of assessee's contentions that the assessee has not provided copy of reasons for reopening of the assessment under section 147 of the Income Tax Act, 1961. During the course of appellate hearing before us both the ld. representatives asked for obtaining report from Assessing Officer as a counter verification regarding supplying of reasons for reopening of the assessment in this case. In this regard, Office of Addl. Commissioner of Income-Tax (Sr.DR)(ITAT)-1(1), Ahmedabad vide letter dated 11.02. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and served to the assessee. Assessee requested the Department that the original return filed under section 139 be treated as return filed in response to the notice under section 148 of the Act. During the assessment proceedings, the AO noticed that the assessee has not reflected the value of the goods of Rs. 1,77,37,360/- supplied through M/s.Shakti Freight and Carriers, Ahmedabad without invoices in its books of accounts. Accordingly, the AO issued a show cause notice dated 18.1.2016 proposing as to why unaccounted value of goods delivered through the above carriers should not be added to the income of the assessee. The assessee in its reply dated 29.2.2016 contended that there was a difference between the value of goods shown by the AO and the DGCEI, and that the actual amount worked out for the Asstt. Year 2009-10 would be only Rs. 1,33,70,948/-. Even the figures mentioned by the DGCEI was not correct and could not be believed because dispute in this regard was pending before the appropriate authority; that there was a dispute between value of book-stock and the actual stock; Department has not found any shortage in stock of the company and wastes/process loss so as to treat th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d made an application under section 154 in this behalf, and the ld.AO has rectified the same. This is evident from the Grounds of appeal filed along with form no.35 filed before the ld.CIT(A). Therefore, the ld.CIT(A) confirmed the addition to the extent of Rs. 17,20,563/- after considering the fact as referred above that assessee has himself requested for taking the G.P. purchase @ 9.70%. Still aggrieved, the assessee is now before the Tribunal. 7. Before us, the ld. counsel for the assessee reiterated the submissions as were made before the Revenue authorities, while, the ld. DR supported orders of the Revenue authorities. 8. We have considered rival submissions and gone through the record carefully. We find that the during the appellate proceedings before the CIT(A), the assessee has been given as many as eleven opportunities starting from 12.09.2016 to 6.9.2017, but no compliance has been made on the part of the assessee for disposal of its appellate proceedings. Therefore, the ld. CIT(A) found no option but to dispose of the appeal after considering material available on records. The dispute before us is against addition of Rs. 33,73,722/- on account of alleged quantum of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... milar in this appeal of the Asstt.Yar 2010-11 as well, for the reasons discussed by us in the Asstt.Year 2009-10 (supra), we reject this ground no.1 of the appeal also. 12. Similarly, as regards addition on account of suppressed sales in the form of sales without invoices are concerned, the facts and circumstances in this year also similar to the asstt.Year 2009-10 except variation 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 2010-11 also stands dismissed. 13. Now we take ground no.3 of the assesee's appeal. In the ground no.3, the assessee is aggrieved by the action of the CIT(A) in confirming addition of Rs. 26,25,000/-. 14. Brief facts of the case are that during the course of assessment proceedings, an information was received from the office of DCIT, Cent.Cir.1(4), Ahmedabad dated 16.10.2015 wherein it was mentioned that a search under section 132 of the Act was conducted in the case of M/s.Vitale Bio Science Ltd., Ahmedabad. Director of the company, Shri Lalit Kantilal Rathod in his statement stated that the company is in the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding accommodation entries, and whatever statement made by them was general in nature and would not corroborate stand of the AO. There was no proof that the assessee company or its directors have given any cash to the said M/s.Vitale Bio Science Ltd. clandestinely, and therefore, the impugned transaction cannot be deemed to be a sham transaction. All the necessary supporting documents have been provided to the AO to support the claim of the assessee that transaction entered into between the assessee company and the said M/s.Vitale Bio Science Ltd. are genuine, and there was no room for doubting identity, genuineness, and credit-worthiness in respect of the transaction. However, the ld.CIT(A) did not accept the submissions of the assessee. The ld.CIT(A) based on the finding of the AO and also considering the statement made by the directors under section 131 of the Act on 1.5.2013, particularly question no.2, as also question no.5 & 6 wherein the directors of the company have admitted of providing accommodation entries to the parties, confirmed action of the AO in making addition of Rs. 26,25,000/-. Aggrieved further, the assessee is now before the Tribunal. 16. Before us, the ld. c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We do not find any infirmity in the order both the authorities below accordingly, we reject this ground appeal. 18. In the result, appeal of the assessee for 2010-11 is dismissed. 19. Now we take the appeal for assessment year 2011-12. In this appeal, the assessee has raised following grounds of appeal:- "1. That the reassessment proceedings is bad in law and therefore the order passed by the learned AO 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 the addition of Gross Profit of Rs. 30,20,466/- and therefore the learned AO should be directed to delete the said addition. 3. That the learned Commissioner of Income Tax(Appeals)has erred in law and facts by confirming the disallowance of foreign commission u/s 40(a)(i) of Rs. 36,98,579/- and therefore the learned AO should be directed to allow the said expense." 20. As regards first ground challenging validity of reopening of the assessment is concerned, the issue is similar to the issue raised in Asstt. Year 2009-10 in ground no.1. We have dealt with the same hereinabove and rejected contentions of the assessee and d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted the submission of the assessee on the ground that assessee had not furnished the form no. 15CA. Consequently, the Assessing Officer has disallowed the amount of Rs. 36,98,579/- as per provision of section 40(a)(i) of the act for not furnishing form no. 15CA and 15CB. 25. Aggrieved assessee has taken the matter before the ld. CIT(A). The ld. CIT(A) reiterating the facts reported by the Assessing Officer, the ld. CIT(A) has dismissed the appeal of the assessee. 26. Heard both the sides and perused the material on record. The Assessing Officer has made addition of Rs. 36,98,579/- u/s. 40(a)(i) of the Act on failure of the assessee to deduct tax at source on payment of commission to various persons outside India. During the course of assessment proceedings the 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 forei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection in India. In spite of scrutiny assessment, the Assessing Officer had merely referred non-submission of form no. 15C and 15CB but did not make any investigation/verification to disprove the material facts reported by the assessee as stated above in this order. The Assessing Officer has not brought any material on record to substantiate that income was accrued in India or deemed to accrue in India. Therefore, in the light of the above facts and finding of the judicial pronouncement as supra, we consider that ld. CIT(A) is not justified in confirming the action of the Assessing Officer. Therefore, this ground of appeal of the assessee is allowed. 27. Now we take the appeal for assessment year 2013-14. The grounds in this appeal read as follows:- "1. That the learned Commissioner of Income Tax(Appeals)has erred in law and facts by confirming the addition of Rs. 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 Rs. 69,06,808/-,b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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