9911796707
TMI Blog2023 (10) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... and trading of readymade garments. Return declaring income of Rs. 1,56,891/- was filed and statutory notice u/s 143(2) of the Act was issued. Ld. AO had found that assessee has shown purchases amounting to Rs. 76,88,380/- from M/s. Thakur Associates but on investigation made at the premises it was found that it was a residential house of brother of Sanjiv Thakur, the proprietor of M/s. Thakur Associates, who lived in Joint family. Sanjiv Thakur was not available and inquiries were made from Rahul who was nephew of Sanjiv Thakur. Based on the statement of Rahul that the premises is of his deceased father, N.K. Thakur and that his uncle Sanjiv Thakur resided in the premises till April, 2013 and that he is not aware of the existence of the firm M/s. Thakur Associates, the assessee was directed to ensure the presence of the party himself for verification of genuineness of transactions. However, as assessee failed to produce anyone, Ld. AO considered M/s. Thakur Associates to be an entity created to provide accommodation entries. Ld. AO observed that the confirmation filed by the assessee from M/s. Thakur Associates was not reliable and thus in the absence of any other details like purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Investigation Wing, Delhi it was revealed that Neena Hardeep Singh and Shri hardeep Nihal Singh visit frequently abroad and own M/s. Trans Europe (Textiles) BV, 124, M.J. Street, the Netherlands. This concern appears to be special purpose company. The assessee has made total export sales to this one company i.e. M/s. Trans Europe (Textiles) BV which is owned by the assessee along with Shri Hardeep Nihal Singh. The assessee executes bogus exports in names of these concerns and bring equivalent sale proceeds to invoice value in convertible foreign exchange in India through banking channels in the name of the assessee. Against these fictitious exports, assessee has also claimed export benefits i.e. duty drawback of Rs. 9,34,254/- and DEPB of Rs. 4,92,174/-. Considering the above, it is crystal clear that assessee-concern has not made any actual sale whether local or export but the money received against export sale received in convertible foreign exchange is only the Hawala amount brought into India through the garb of export followed by the assessee. Further, the assessee has not proved genuineness of purchases and fabrication and making charges against local sales made by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther on the facts and in the circumstances of the case, the CIT(A) has erred in law in deleting the addition of Rs. 1,18,41,518/- made on account of peak export by the A.O. 2. Whether on the facts and in the circumstances of the case, the CIT(A) has erred in law in deleting the addition of Rs. 74,96,688/- made by the AO on account of bogus sales to M/s. Golden Harvest. 3. Whether on the facts and in the circumstances of the case, the CIT(A) has erred in law in deleting the addition of Rs. 76,88,380/- made by the AO on account of bogus purchase from M/s. Thakur Associates. 4. Whether on the facts and in the circumstances of the case, the CIT(A) has erred in law in deleting the addition of Rs. 16,09,094/- made by the AO on account of unexplained cash credit. 5. Whether on the facts and in the circumstances of the case, the CIT(A) has erred in law in deleting the addition of Rs. 5,65,490/- made by the AO on account of disallowance of fabrication expenses had not been incurred on the business. 6. The order of the CIT(A) is erroneous and not tenable in law and facts. 7. The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such exports has been accepted and added back. Ld. Sr. Counsel submitted that the cryptic manner in which the assessment order is passed while calculating the additions, there is no logic and reason or justification for taking a peak export for addition. 7.1 In regard to the addition of Rs. 74,96,688/- on account of sales to Golden Harvest it was submitted that the sales of readymade garments were lesser than the sales tax turnover threshhold and required no sales tax. It was submitted that Ld. CIT(A) has taken into consideration all the relevant facts including that the payment were received through banking channels and no adverse evidence was available with the Ld. AO to make the addition. Ld. Sr. Counsel also relied the judgment in case of husband of assessee where similar addition was deleted by the Tribunal. 7.2 In regard to deletion of Rs. 76,88,380/- towards alleged bogus purchases from Thakur Associates, Ld. Sr. Counsel submitted that without giving any opportunity to the assessee to cross examination, Rahul, who was nephew of Sanjiv Thakur, the statement was relied by the Ld. AO and Ld. CIT(A) has rightly observed that the statement cannot be made basis for addition. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to ground no. 3 and 4 in assessee's cross objection, it was submitted that the Ld. AO while calculating assessable income erroneously did not reduce the remaining undoubted expenses of Rs. 1,06,09,019/- as claimed in the profit and loss account by the assessee. No reason for disallowing such expenses have been given by the Ld. AO, yet the same were not reduced while computing the assessed total income. That the aforesaid expense, were undisputedly incurred for business purposes need to be reduced from the total income/ business income. 9. Further, it was contended that assessee has also claimed deduction under section 80HHC of the Act of Rs. 36,557/- which is not allowed in the computation at end of the assessment order without any cogent reasons being provided thereof. Since the assessee undisputedly satisfies all the conditions, the same calls for being allowed. 9.1 Ld. Sr. Counsel has submitted that the said grounds and issue raised in the cross objection are undisputedly emanating from the order of the assessing officer and CIT(A) deserves to be considered and allowed as issues raised in the cross objection undisputedly emanate from the order of the assessing officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecessary to give an opportunity to rebut the same to the assessee. Ld. AO was drawing inferences from the statement of Rahul, and Ld. CIT(A) has rightly observed that no reason have been given in the assessment order in not allowing cross examination of Rahul which is a violation of principle of natural justice. Ld. CIT(A) has taken into consideration the assessment record and observed that assessee was never asked by Ld. AO to produce Sanjeev Thakur for verification. The Revenue in this appeal does not dispute that this was an incorrect factual aspect of the assessment proceedings as recorded by Ld. CIT(A) on the basis of records before it. Further what transpires is that the payments were made through banking transactions and without any factual evidences, Ld. AO concluded that the amount deposited in the account of Thakur Associates was withdrawn as cash by the assessee. The findings of Ld. CIT(A) require no interference. Thus this Ground has no substance. Same is decided against the Revenue. 12. Ground no 2 in appeal of Revenue. The order of ld. Assessing Officer shows that the sales which were made to M/s. Golden Harvest were considered to be bogus sales without commenting an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeds were received through banking channel and duty draw back, DEPB received on account of export were duly accounted by the assessee. The finding of Ld. AO that assessee has exported some other types of good instead of those mentioned in the export documents cannot be accepted as it is not supported with any direct or circumstantial evidence and to the contrary the custom clearance documents being records of a statutory authority have to be presumed to be correct. Thus, Ld. CIT(A) taking into account all the aforesaid aspects and pointing deficiencies in the order of ld. AO, including the contrary stand of rejecting the exports and allowing shipping and forwarding and travelling expenses incurred on these export, had set aside the peak addition which need no interference. 15. Ground no 4 in appeal of Revenue. It can be observed that Revenue cannot dispute the fact that the opening balances in the book of accounts has been added as an unexplained credits. While the settled proposition of law is that Section 68 of the Act cannot be invoked in case of outstanding balances of creditors as recorded at the beginning of FY. Reliance in this regard can be placed on the judgment of Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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