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TMI Blog2003 (5) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... antity discount , 4. deleting the disallowance of Rs. 7,400 made out of professional fee made under s. 40A(2) of the Act. That the appellant craves for permission to and delete or amend the ground of appeal before or at the time of hearing of appeal." 2. The assessee claimed 100 per cent depreciation on the cost of 125 trolleys. Fabrication of these trolleys was got done through concern M/s Shiv Engineering Works M/s Pradeep Engineering Works, Rewari. For the reasons given in the impugned assessment order, the AO held that the claim of fabrication of 125 trolleys was sham and bogus. He, therefore, disallowed the claim of depreciation on the said trolleys. 3. Aggrieved the assessee preferred first appeal before the learned CIT(A) who after considering the submissions made before him held that the disallowance of claim of depreciation on the said trolleys was unjustified and wrong. He made the following observations in this regard: "I have considered the submissions of the appellant and have also gone through the reasons for which the claim of the appellant was disallowed. The main reasons for disallowing the claim of the appellant were that: (a) The fabrications were n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Thus, the trolleys which cost less than Rs. 5,000 will be entitled to 100 per cent and for the rest of the trolleys the depreciation will be allowed at the rates prescribed in the rule. The appellant will give the working in respect of the trolleys." 4. Aggrieved the Revenue has come up in second appeal before the Tribunal. 5. We have heard both the sides and considered the materials on the file. The learned Departmental Representative relied on the detailed reasons given by the AO in the impugned assessment order for holding that the claim of fabrication of 125 trolleys was not proved and it was sham and bogus. He contended that the learned CIT(A) directed the AO to allow depreciation on the said trolleys without rebuttal of the reasons given by the AO for holding that the claim of fabrication of the said trolleys was sham and bogus. 6. The learned Authorised Representative of the assessee on the other hand relied on the order of the learned CIT(A). He reiterated the submissions made before him. 7. After considering the rival submissions and the materials on the file, we are of the view that on the facts and in the circumstances of the case and in view of the detailed re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k reconciliation statement, work in progress, closing stock as per assessee s books and that declared to the bank. There were also discrepancies in the accounts of various customers. He also observed that the assessee had utilised the same sale voucher book for issuing the duplicate bills. In its explanation the assessee contested all the allegations to claim that the books of accounts were in order and there were no discrepancies in the bank reconciliation statement, work-in-progress, etc. It claimed that the goods were excisable and there were no discrepancies found by the excise authorities. 10. The AO was not satisfied and convinced. He held that the books of accounts were not reliable and trading results were not acceptable. Invoking the provision of s. 145(2), he rejected the trading results and estimated sales at Rs. 45,13,53,130 as against declared sales of Rs. 33,47,55,892 and applying GP rate of 13.79 per cent on the estimated sales, he made the impugned addition in the trading account. 11. Aggrieved the assessee preferred first appeal before the learned CIT(A) who after considering the submissions made before him deleted the impugned addition. 12. Aggrieved the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of discrepancy must be worked out and additions if any, after giving opportunity to the assessee for being heard, must be restricted to that. Neither the AO nor the learned CIT(A) appreciated these matters. The AO, to make his task easy, made addition by enhancing sale and GP on estimate and the learned CIT(A), to make his own task easier, deleted the entire addition. Neither course of action was proper and just. 16. In the above view of the matter, we consider it imperative in the interest of justice and fair play to restore the matter to the AO for passing fresh order after giving fresh opportunity to the assessee. Addition if any called for must be restricted to the actual amount of discrepancy/difference in sales, purchase, stock, declaration to the bank, customers and suppliers accounts, etc. We order accordingly. 17. The next grievance of the Revenue is against the deletion of disallowance of Rs. 5,50,990 on account of bogus claim of expenses under the head quantity discount. The assessee had shown payment of cash and quantity discount of Rs. 6,58,150 to M/s C.L. Gupta Sons, Moradabad. The AO observed that the assessee had not allowed similar discount to other bulk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sale that they had allowed this quantity discount to this concern which was on the basis of agreement and it was on the basis of this agreement that they allowed discount and, accordingly, received the payment. In view of these facts, the disallowance made under the head quantity discount cannot be sustained and is deleted. Thus, the disallowance under the head rebate/discount amounting to Rs. 6,58,150 is deleted." 20. Aggrieved the Revenue has come up in second appeal contending that the deletion of the quantity discount of Rs. 5,50,990 to M/s CL Gupta Sons was unjustified. 21. The learned Departmental Representative relied on the AO s order. He submitted that the quantity discount paid to M/s CL Gupta Sons was not in the interest of business and the same was not allowable because it was also excessive. 22. The learned Authorised Representative of the assessee, on the other hand, relied on the order of the learned CIT(A). 23. After considering the rival submissions and the materials on the file, we are of the view that on the facts and in the circumstances of the case and for the reasons given in the impugned appellate order the learned CIT(A) was justified in delet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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