×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
03-01-2019, Ram Jagannath Singare, Section 44AB, 234B, Tribunal Pune
This appeal preferred by the assessee emanates from the order of Ld. CIT(Appeals)-1, Aurangabad dated 08.02.2016 for assessment year 2011-12 as per following grounds of appeal on record:
“1. The Hon'ble Commissioner (Appeal) has erred in confirmation alleged bogus purchases Rs.17,41,834/-. Appellant prays to cancel the same.
2) Hon'ble Commissioner (Appeal) has erred in disallowance commission of Rs.15,12,700/-. The appellant prays to cancel whole addition of Rs.15,12,700/-
The appellant prays for deletion of whole disallowance /addition of expenses made by Assessing Officer which is enhanced by the Hon'ble Commissioner (Appeals).
3) Commissioner (Appeals) has erred in confirming disallowance of interest of Rs.13,98,527/- alleged as interest on interest free advances to sister concerns-when appellant has capital account and interest free loans accepted from sister concerns. Appellant pray to allow the same.
4) Appellant prays for just and equitable relief.
5) Appellant prays for cancellation of interest charged u/s.234B.
6) Appellant prays for add, amend, alter, modify and/or withdraw the grounds as occasion may demand.”
2. At the time of hearing, Ld. AR of the assessee filed written submissions before the Bench and prayed that the instant case may be decided on the basis of the written submissions. However, we asked the Ld. AR of the assessee to place argument which he refused to do so and insisted that the written submissions may kindly be considered while deciding the appeal of the assessee. Accordingly, we have taken written submissions on record while deciding the grounds of appeal.
3. With regard to the first ground of appeal, the facts are that the assessee is engaged in the business of extraction of oil from cotton seed and refining the wash oil. The assessee is running two proprietary concerns under the name and style as Shree Ganesh Refinery , Jalna and M/s. Balaji Oil Mills, Jalna which is mainly engaged in manufacturing of all types of oil and oil cakes. The total turnover of the assessee, during the year of account exceeds Rs.60 Lakhs. Therefore, as per provisions of section 44AB of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’), assessee has got audited his books of accounts and filed along with the return of income audited statement of accounts and audit report in Form No.3CB and 3CD.
4. During the course of assessment proceedings, it was requested to the assessee to furnish day to day purchase, sale and closing stock in terms of quality, quantity rate narrating the name and addressed of the parties with whom transactions were made. Accordingly, the assessee had furnished the said details. The aforesaid details were verified with reference to the books of accounts and purchase and sales bills of the assessee On verification of the same, it was noticed that the assessee has shown purchase of cotton seed oil cake to the extent of 800 quintals at the rate of Rs.1100/- and Rs.1105/- per quintals from M/s. Sai Oil Industries, Jalna which is a sister concern of the assessee totaling to Rs.11,02 000/ Similarly, the assessee has also shown to have purchased sunflower oil from Sai Oil Industries Jalna for Rs.6,39,837/-.
The total purchases shown in respect of cotton seeds oil, cake and sunflower oil from the sister concerns during the year under consideration at Rs.17,41,834/-. The assessee was asked to furnish the purchase bills as verification of the assessee’s purchase. In response, it was stated that absolutely no bills for such purchases are available with the assessee. The Assessing Officer on verification found that the assessee was purchasing the goods from the sister concern on a higher rate and selling the same on lower rates. On further verification of the bank accounts, it was observed that the assessee has made substantial cash deposits in to the bank account out of the corresponding cash sales for which no corresponding purchase are available with the assessee along with any evidences. The Assessing Officer concluded that the aforesaid purchases are totally bogus, therefore, in absence of any iota