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TMI Blog2022 (7) TMI 556X X X X Extracts X X X X X X X X Extracts X X X X ..... ds of the assessee. We, therefore, affirm the impugned order on this score. This ground is not allowed. Bogus purchases - In absence of the assessee filing truck numbers, transportation and delivery challans with toll tax receipt etc., the AO held that the purchases were bogus - CIT(A) restricted the addition to 15% of the purchase price as profit element in the bogus purchases - HELD THAT:- Admittedly, no appeal has been preferred by the assessee before the Tribunal against the impugned order. When certain goods are recorded in the books of account as purchased, then these would either get consumed in the manufacturing process or appear in the closing stock. There cannot be a situation in which the purchase of raw material is recorded and the same does not get reflected either in the manufacturing or in the closing stock. As the assessee could not establish the genuineness of purchases recorded in the books of account, what follows, as a corollary, is that steel was actually purchased from some other parties at lower rates but recorded at higher purchase price in the books of account through bogus bills. In such circumstances, only the additional profit, which the assessee su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see did not maintain log book for the vehicles. In that view of the matter, personal use of vehicles cannot be ruled out. Considering the entirety of facts and circumstances of the case, we are satisfied that it would be just and fair if the disallowance on account of Vehicle expenses, vehicle insurance, interest over vehicle and depreciation is restricted for personal use to 10% of the expenses - Decided partly in favour of assessee. Addition of Travelling and Repair and maintenance expenses - Since the expenses were in cash and claimed on the basis of self-made vouchers, the AO disallowed 20% thereof - CIT(A) deleted the addition - HELD THAT:- We find that the assessee claimed deduction on the basis of self-made vouchers. Considering the entirety of the facts and circumstances of the case, we are of the considered opinion that it would be just and fair if the disallowance of 10% of total expenses, namely, Rs.22,105/- is sustained. We order accordingly. This ground is partly allowed. Addition on account of other items consumption - AO made all the above additions on the ground that the consumption of tyres, tubes, axel wheels and axel was shown on lower side - CIT(A) de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cultural loan of Rs.93.50 lakh from bank which shows that the agricultural activity was carried on by the assessee. Existence of the agricultural land is not disputed because the assessee furnished 7/12 extracts also. Considering the entirety of the facts and circumstances of the case, we are of the considered opinion that the ld. CIT(A) was justified in restricting the addition to the above level. Assessee appeal is partly allowed. - ITA No. 1224/PUN/2016 - - - Dated:- 11-7-2022 - Shri R.S. Syal, Vice President And Shri S.S. Viswanethra Ravi, Judicial Member For the Assessee : Shri Manish Somani For the Revenue : Shri S.P. Walimbe ORDER PER R.S. SYAL, VP : This appeal by the Revenue arises out of the order dated 25-03-2016 passed by the CIT(A)-2, Aurangabad in relation to the assessment year 2011-12. 2. The first ground is against the deletion of addition amounting to Rs.1,46,94,904/- on account of capital gain. 3. Briefly stated, the facts of the case are that the assessee is a manufacturer and supplier of Tyre Bullock carts and other fabrication works. Return was filed declaring total income at Rs.44,83,560/-. During the course of assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us purchases. The AO noticed that the assessee did not have evidence of material purchased amounting to Rs.75,50,210/- from M/s Manish Steel Centre, Kolhapur. In the absence of the assessee filing truck numbers, transportation and delivery challans with toll tax receipt etc., the AO held that the purchases amounting to Rs.75.50 lakh were bogus. He, therefore, made addition for the said sum. The ld. CIT(A) restricted the addition to 15% of the purchase price as profit element in the bogus purchases. 6. After considering the rival submissions and perusing the relevant material on record, it is seen that the assessee recorded purchases worth Rs.75.50 lakh. Such purchases were of steel, which is consumed in the manufacture of Bullock carts. The assessee could not lead proper evidence before the authorities below to substantiate the genuineness of the purchases. Admittedly, no appeal has been preferred by the assessee before the Tribunal against the impugned order. When certain goods are recorded in the books of account as purchased, then these would either get consumed in the manufacturing process or appear in the closing stock. There cannot be a situation in which the purchase of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO. Nothing has been placed on record to show that this finding of the ld. CIT(A) is erroneous. In that view of the matter, the entire edifice of the addition erected on such misunderstanding, falls flat. We, therefore, countenance the impugned order on this score and dismiss this ground of appeal. 9. Ground No.4 is against the deletion of disallowance of Labour payments. The AO noticed that the assessee claimed wages of Rs.87.95 lakh on a turnover of Rs.8.79 crore. He compared it with the figures of last year of wages at Rs.38.03 lakh and turnover of Rs.16.65 crore. He found certain infirmities in the labour payments inasmuch as the signatures of 6 persons were not matching. In that view of the matter, he allowed wages to the extent of Rs.37.95 lakh and made the disallowance of Rs.50.00 lakh. The ld. CIT(A) reduced the disallowance to Rs.19.49 lakh. 10. After considering the rival submissions and perusing the relevant material on record, it is seen that the AO disallowed Rs.50.00 lakh out of Rs.87.95 lakh paid by the assessee as Labour charges. The AO found difference in signatures of 6 persons only. Without quantifying the amount of wages pertaining to such 6 persons, an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.32,38,592/- made by the AO on account of other items consumption. The facts of this ground are that the AO took note of the fact that the assessee sold 2583 bullock carts. He noticed that the assessee had shown purchase of 4296 tyres. With the opening stock of 60 tyres and closing stock of 28 tyres, the figure of tyres consumption was determined at 4328 tyres. Multiplying the number of bullock carts manufactured for the year at 2583 with the figure of 2 (two tyres per bullock cart), he held that the consumption of tyres ought to have been 5166 as against the consumption available as per record at 4328, thereby giving excess consumption of 838 tyres. By applying the average purchase rate of Rs.3573 per tyre, he made an addition towards excess consumption of tyres at Rs.29,94,174/-. In the same manner, he computed excess value of tubes consumed at Rs.6846/-; excess value of axle wheels at Rs.1,11,160/-; and excess value of axles at Rs.1,26,412/-, thereby making total addition on this count at Rs.32,38,592/-. The ld. CIT(A) deleted the addition except sustaining Rs.64,314/- in tyres due to actual excess 18 pieces of tyres. 16. We have heard the rival submissions and perused t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bstantiate the agricultural income, the assessee produced photocopies of cash sale of the agricultural produce, which has been tabulated at pages 15 to 17 of the assessment order along with necessary details of expenses incurred for agriculture purpose. The assessee brought it to the notice of the AO that a loan of Rs.93.50 lakh was also taken from Bank of Maharashtra for the agriculture activity. The assessee also furnished total area under cultivation pertaining to him and his family members along with the necessary 7/12 extracts. The AO conducted inquiry in respect of 4 persons to whom the assessee claimed to have sold the agricultural produce. Three letters were returned unserved and one letter was received by wife of the fourth buyer of agriculture produce. She informed, with the medical certificate, that her husband had suffered paralysis attack. The AO deputed an Inspector to verify the factual position in this regard. The Inspector reported to the AO that he went and met wife of Mr. Ganesh S. Bharadiya, proprietor of Dayaram Ramadhan Bharadiya, Grain merchant and Commission Agent, New Mondha, Nanded. His wife informed that her husband was suffering from paralysis attack and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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