9911796707
TMI Blog2022 (2) TMI 106X X X X Extracts X X X X X X X X Extracts X X X X ..... has failed to do so. At the same time, we observe that the assessee's turnover has not been doubted by Ld. AO. The assessee is unable to explain the purchases and could not produce any evidence in support of the same. However, all these purchases could not have been termed as income of the assessee since the material purchased by the assessee would have been consumed in the manufacturing process. The manufacturing process would require consumption of raw material. Therefore, it could be presumed that the purchases were made from unknown sources. Under these circumstances, the profit element embedded in unaccounted purchases would have to be brought to tax. Considering the facts of the case as well as the nature of assessee's busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,05,54,155/- as unexplained expenditure u/s. 69C of the Act without assigning proper reasons and justification and further ought to have appreciated that the provisions of Section 69C of the Act had no application to the factual matrix of the case. 2. The CIT (Appeals) failed to appreciate that the computation of the unexplained purchases on various facets was wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts bad in law. 3. The CIT (Appeals) erred in sustaining the disallowance of ₹ 13,19,853/- by invoking the provision of Section 40(a)(ia) of the Act without assigning proper reasons and justification and ought to have appreciated that the applicability of second proviso was not examined in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lacs. The cost of material consumed was shown at ₹ 30.20 Lacs. On the basis of this data, Ld. AO concluded that the assessee should have purchased material for ₹ 118.49 Lacs as against the purchase bills of ₹ 12.95 Lacs as produced by the assessee. The same was computed as Opening Stock + Purchases-Closing Stock=Cost of raw material consumed. Further, no amount was shown as payable to sundry creditors. Since there was no evidence for payment of material worth ₹ 105.54 Lacs, it was to be presumed that expenditure was made outside the books. Accordingly, the amount of ₹ 105.54 Lacs was added to the income of the assessee as unexplained expenditure u/s. 69C. 3.3. The assessee was saddled with another addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . AR are not acceptable. The complete onus to reconcile the accounts including stock valuation was on the assessee and the assessee has failed to do so. At the same time, we observe that the assessee's turnover has not been doubted by Ld. AO. The assessee is unable to explain the purchases of ₹ 105.54 Lacs and could not produce any evidence in support of the same. However, all these purchases could not have been termed as income of the assessee since the material purchased by the assessee would have been consumed in the manufacturing process. The manufacturing process would require consumption of raw material. Therefore, it could be presumed that the purchases were made from unknown sources. Under these circumstances, the profit e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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