9911796707
TMI Blog2023 (11) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... 022-23/1046438026(1), dated 21/10/2022 arising out of the order passed by the Ld. AO u/s. 143(3) r.w.s 153A of the Income Tax Act, 1961 [the Act] for the AY 2015-16. The assessee has filed cross objections. 2. Brief facts of the case are that the assessee is a Private Limited Company engaged in trading of Tobacco and filed its return of income for the AY 2015-16 on 28/12/2015 admitting a total income of Rs. 24,01,89,770/- comprising of 'income from other sources' of Rs. 13,91,496/- and 'Long Term Capital Gains' of Rs. 23,87,98,274/-. Subsequently, the assessment was completed u/s. 143(3) wherein the Ld. AO made an addition of Rs. 5,86,00,000/- towards LTCG by disallowing the cost of improvement. A search and seizure operation was conducted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vt Ltd [M/s. PSSPL]. Mr. Polisetty Somasundaram further submitted that the fixed assets of the company i.e., M/s. PSSPL were partitioned between himself and his brother Sri Polisetty Amarnath as per the MoU dated 22/7/2008 wherein Sri Polisetty Amarnath received factory premises of M/s. PSSPL including plant and machinery as part of his share. Subsequently, Mr. Polisetty Amarnath sold his share of property for a consideration of Rs. 30 Crs to M/s. Jyothirmaye Properties Pvt Ltd. Sri Polisetty Somasundaram further submitted that Sri Polisetty Amarnath withdrew Rs. 14.47 Crs from the sale proceeds deposited into the State Bank of Hyderabad account of the company. Subsequently, a sworn statement u/s. 132(4) of the Act was recorded from Sri Pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... patnam. During the first appellate proceedings, the Ld. Counsel for the assessee submitted that the assessee did not claim any expenditure in the impugned assessment year for the purchase of tobacco. Further, the Ld. Counsel for the assessee also submitted that the stock which was written off during the AY 2019-20 was also not claimed as an expenditure by the assessee during the impugned assessment year. Considering these submissions, the Ld. CIT(A) allowed the appeal of the assessee. Aggrieved by the order of the Ld. CIT(A), the Revenue is in appeal before us by raising the following grounds of appeal: "1. The order of the Ld. CIT(A) is erroneous in law and the facts and circumstances of the case. 2. The Ld. CIT(A) erred in law and fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t u/s. 143(3) r.w.s 153A of the Act. 2. The Ld. CIT(A) is justified in deleting the addition made by the Assessing Officer by treating the opening stock of Rs. 3,39,29,117/- and purchases of Rs. 14,32,13,500/- aggregating to an amount of Rs. 17,71,40,620/- as bogus purchases. 3. The Ld. CIT (A) is justified in deleting the addition of Rs. 5,86,00,000/- made under the head 'long term capital gains'. 4. Any other ground of cross objection that may be raised at the time of hearing." 5. At the outset, the Ld. Departmental Representative [DR] referred to the sworn deposition u/s. 132(4) of the Act by Sri Polisetty Abhinava Sundaram which was recorded on 13/2/2020 and stated that in response to Question No. 10, Sri Polisetty Abhinava Sunda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that the assessee in his own deposition has stated that purchases of tobacco was made out of the withdrawals from the bank account of the assessee company to the extent of Rs. 14.47 Crs. We also find that the assessee has admitted the sale proceeds of Rs. 30 Crs towards the sale of property and has offered the capital gains tax while filing the return of income. The Ld. AO has not disputed the source for the withdrawals however, has considered the purchases as bogus. From the submissions of the Ld. AR and from the materials placed before us, we find that the assessee has not claimed any expenditure with respect to purchases during the FY 2014-15 and has shown the entire purchases as stock-in-trade from AY 2015-16 to 2019-20. Further, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting to Rs. 30 Crs. The capital gains arising from the sale of impugned property was admitted as income and was assessed in the assessment u/s. 143(3) of the Act on 30/11/2017. In view of the above facts on record the sources for the purchases cannot be considered as unexplained nor disallowed as no expenses have been claimed under the head purchases by the appellant for the purpose of computation of income under the Act.........." 7. Further, we find that the Ld. AO has not brought on record any material to corroborate the seized material warranting addition of bogus purchases to the extent of Rs. 14.47 Crs. In these circumstances, we find that the Ld. CIT(A) has rightly considered these facts and has deleted the addition made by the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
