9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 2179 - AT - Income TaxTrading addition - rejection of books of accounts - CIT(A) deleted the addition - Held that - CIT(A) simply accepted the submissions without making any verification on the huge addition made by the AO and there is no whisper in his order that on what basis he has accepted the sales and purchases without any verification and just on the submissions of made by the assessee. The valuation has not been submitted by the assessee before the AO. The gross profit figure shown by the assessee is also contradictory at every level. There was also discrepancy in the gross profit declared by the assessee in the return form. The ld. AR has also not submitted the shortage chart as well as quantity chart of last two years. The ld. AR has also not filed the copy of explanation before the Bench. He only filed the copy of the letter without date and without any signature at Serial No. 6 & 7 of the paper book. In this view of the matter, we set aside the Ground No. 1 of the assessee to the file of the AO to examine it afresh by providing reasonable opportunity of being heard to the assessee and the assessee is also directed to produce the relevant records to verify the quantity of sales and purchases as well as opening and closing stock before the AO and also to produce the books of account to verify the gross profit rate. Further it should be verified from the auditor whether he has audited the books of account or not. If yes, then the assessee s expenses for payment of auditor are also required to be verified. - Decided in favour of revenue statistical purposes. Addition u/s electricity expenses u/s 40A(3) - CIT(A) deleted the addition - Held that - We find from the records that the assessee has paid in cash electricity bill of ₹ 80,092/- for the month of Nov. 2008 to Rajasthan State Electricity Board under the bona fide belief that the payment is made to the Government because of the business expediency and to avoid electricity connection. The ld. CIT(A) has taken into consideration the decision of Hon ble Delhi High Court in the case of R.C. Goyal vs. CIT (2012 (12) TMI 452 - DELHI HIGH COURT) wherein it is held that cash payments made in view of the business expediency is allowable as per Section 40A(3) of the Act. Thus we do not find any infirmity in the order of the ld. CIT(A) on this issue which is sustained. - Decided against revenue. Disallowance u/s 40(a) - CIT(A) restricted part addition - Held that - As find from the ld. CIT(A) s order that he has confirmed the disallowance of transportation expenses to the extent of ₹ 50,364/- paid to M/s. Jai Bharat Transport Co. and deleted the remaining disallowance. We have observed that ld. CIT(A) has taken care to consider all the aspects as to disallowance transportation expenses of ₹ 4,79,532/- u/s 40(a)(ia) of the Act made by the AO. However, for confirming disallowance of ₹ 50,364/- paid to M/s. Jai Bharat Transport Co. by the ld. CIT(A), we feel that the transport company has no role except to get the commission from the truck driver for issuing bilty and it is the truck owner /driver who is paid freight by the assessee. It is also seen that individual payment to each truck owner/ driver towards the freight is less than ₹ 20,000/- in each case and it does not exceed ₹ 50,000/- in the financial year which is evident from the bilty and other records - Decided against revenue. Addition of interest expenses - non deduction of TDS - assessee had failed to submit the proof of submission of form 15G to the Department - CIT(A) deleted the addition - Held that - As find from the records that the assessee has submitted the Form No. 15G before the AO for claiming certain interest payment without deduction of tax u/s 194A of the Act. However, the AO disallowed the same because of non-production of proof of submission of above forms to the Department at the time of framing the assessment. The ld. CIT(A) considering the order of this Bench in the case of Shyamsunder Kailash Chand vs. ITO (2010 (7) TMI 998 - ITAT JAIPUR) deleted the addition made by the AO observing that the same were available to the AO while framing the assessment. Thus in this view of the matter, we find no infirmity in the order of the ld. CIT(A) which is confirmed on this issue - Decided against revenue. Addition on short weight expenses - Held that - We find from the records that the assessee has not furnished evidence for claiming the expenses on account of short weight expenses before the AO but the assessee has submitted the same before the ld. CIT(A) who has allowed this ground of the assessee without any verification. This issue of the assessee is directly connected with the gross profit rate. We therefore, in the interest of justice set aside this issue to the file of the AO to decide it afresh by providing reasonable opportunity of being heard to the assessee. Disallowance of salary expenses paid to Shri Lokesh Maheshwari - Held that - We have observed from the records that the Shri Lokesh Maheshwari was the employee of the assessee. Shri Lokesh Maheshwari is assessed to tax and has filed his return of income for A.Y. 09-10 on 21.03.2011 declaring income of ₹ 1,15,800/-. The Copy of his PAN is filed in the paper at page 30. Thus, the identity of the employee is established. In view of the facts, circumstances of the case and the records available, the disallowance of ₹ 70,000/- confirmed by the ld. CIT(A) is deleted. - Decided in favour of assessee.
Issues Involved:
1. Deletion of trading addition of Rs. 97,77,900/- after rejecting the books of account u/s 145(3). 2. Deletion of electricity expenses of Rs. 80,092/- u/s 40A(3). 3. Restriction of addition to Rs. 50,364/- against the addition of Rs. 4,79,532/- for inadmissible expenses u/s 40(a). 4. Deletion of interest expenses of Rs. 85,950/- due to failure to submit proof of submission of form 15G. 5. Deletion of addition of Rs. 7,39,409/- on account of short weight expenses. 6. Confirmation of disallowance of transportation expenses of Rs. 50,365/- u/s 40(a)(ia). 7. Confirmation of disallowance of salary expenses of Rs. 70,000/-. Detailed Analysis: 1. Deletion of Trading Addition of Rs. 97,77,900/-: The Revenue contested the deletion of the trading addition made after rejecting the books of account u/s 145(3). The AO had observed several discrepancies, including incomplete audit reports and failure to maintain quantitative details of stock. The CIT(A) found that the assessee had maintained proper books of account and stock registers, and the AO had not proved any inflated purchases or suppressed sales. The Tribunal, however, noted inconsistencies in the gross profit rates and the valuation of closing stock. It set aside the issue to the AO for re-examination, directing the assessee to provide the necessary records. 2. Deletion of Electricity Expenses of Rs. 80,092/-: The AO disallowed electricity expenses paid in cash, citing Section 40A(3). The CIT(A) deleted the disallowance, noting that the payment was made to avoid disconnection and was covered by business expediency. The Tribunal upheld the CIT(A)'s decision, referencing the Delhi High Court's ruling in R.C. Goyal vs. CIT, which allows cash payments under business exigencies. 3. Restriction of Addition to Rs. 50,364/- Against Rs. 4,79,532/-: The AO disallowed transportation expenses due to non-deduction of TDS. The CIT(A) confirmed disallowance only for payments exceeding Rs. 50,000/- to Jai Bharat Transport Co., while deleting the rest. The Tribunal agreed with the CIT(A), noting that payments were made to truck owners/drivers directly and not to transport companies, thus not attracting TDS provisions. 4. Deletion of Interest Expenses of Rs. 85,950/-: The AO disallowed interest expenses for non-submission of Form 15G. The CIT(A) deleted the disallowance, citing that the forms were submitted to the AO during assessment. The Tribunal upheld the CIT(A)'s decision, referencing the ITAT Jaipur ruling in Shyamsunder Kailash Chand vs. ITO, which allows non-disallowance if forms are available during assessment. 5. Deletion of Addition of Rs. 7,39,409/- on Account of Short Weight Expenses: The AO disallowed short weight expenses due to lack of evidence. The CIT(A) deleted the addition, noting that weight shortages were inherent in the business and supported by debit notes from purchasers. The Tribunal set aside the issue to the AO for re-examination, directing the assessee to provide supporting evidence. 6. Confirmation of Disallowance of Transportation Expenses of Rs. 50,365/- u/s 40(a)(ia): The CIT(A) confirmed the disallowance of Rs. 50,364/- paid to Jai Bharat Transport Co. The Tribunal found that payments were made directly to truck drivers/owners, not exceeding Rs. 50,000/- annually, thus not requiring TDS. It deleted the disallowance, citing relevant case laws. 7. Confirmation of Disallowance of Salary Expenses of Rs. 70,000/-: The AO disallowed salary expenses due to unsigned vouchers and incomplete address of the employee. The CIT(A) confirmed the disallowance. The Tribunal deleted the disallowance, noting that the employee had filed a tax return and the identity was established, thus confirming the genuineness of the salary payment. Conclusion: The Tribunal allowed the Revenue's appeal for statistical purposes and the assessee's cross-objection, directing re-examination of specific issues by the AO. The Tribunal's decision emphasized the need for proper verification and substantiation of claims with supporting evidence.
|
