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TMI Blog2003 (5) TMI 222X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee has declared a sale of Rs. 94.32 lakhs on which the GP @ 7.14 per cent had been declared. The GP rate of 3.66 per cent, 5.88 per cent and 4.8 per cent was disclosed by the assessee in the asst. yrs. 1995-96, 1996-97 and 1997-98, respectively. However, the AO noted that the sales turnover of the assessee has come down by 50 per cent, the quantitative tallies have not been maintained and no day-to-day stock register has been maintained by the assessee. The AO, therefore, made a lump sum addition of Rs. 20,000 to the trading results of the assessee to cover up the possible leackage. On appeal, the same was deleted by the CIT(A) against which the Revenue is in appeal. 5. While learned Departmental Representative supported the order of the AO, the learned counsel supported the order of the CIT(A). 6. We have considered the rival submissions. It is settled law that the trading addition could be made only if the books of account have been rejected on cogent reasons and the proviso to s. 145 of the Act has been applied. In the instant case, this has not been done. The AO has also accepted the purchases and sales. We also find that the book results declared by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of survey when these facts were also disclosed. In the statement, it was also stated that as the business of the son was a new business, certain goods owned by him were also stored at the assessee s business premises. Separate day book, bill book and bill files were also found. It was also stated that Shri Ajay Kakwani was regularly assessed to tax in the past for other incomes. The AO considered the submissions made by the assessee. He was not satisfied with that. He observed that it was a story to cover up the excess stock found on the date of survey. There was no evidence for existence of new business by the assessee s son. The assessee also could not identify the goods owned by his son. The son was also not paying any income-tax or sales-tax. The AO, therefore, held that the assessee s son was not doing any business independently and the business done by the son was the benami business of the assessee. He, therefore, held that the value of the stock to the extent of Rs. 1,30,721 was unexplained and added the same to the income of the assessee. On appeal, the CIT(A) deleted the entire addition which is challenged before us. 9. While learned Departmental Representative relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that these were given to the assessee for repairs. We also find that in doing the repair work, the assessee has obtained the assistance of Kirloskar Brothers who were manufacturing these pumps and Kirloskar Brothers had raised certain bills on the assessee. These evidences were before the AO. The AO did not believe the genuineness these evidences without commenting adversely. Thus, there does not appear to be any apparent reasons for making the addition. The CIT(A) appreciated these facts and deleted the addition. We do not find any infirmity in the same and while upholding his findings, we dismiss the ground of appeal raised by the Revenue. 14. In ground No. 4, the Revenue has challenged the relief granted by the CIT(A) in respect of value of Kabad. 15. The assessee claimed that there were certain kabad which did not have any value. The AO had adopted the value of such kabad at Rs. 50,300. The assessee requested the AO to reduce the value of stock found on the date of survey by this amount. However, the AO accepted the contention of the assessee partly, inasmuch as, he allowed as relief of Rs. 5,300 and added the balance amount of Rs. 45,000. On appeal, the CIT(A) verified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... staining the part addition. Accordingly, while upholding the findings of the CIT(A), we dismiss the ground of appeal raised by the Revenue as well as raised by the assessee. 23. Ground No. 6 raised by the Revenue related to the deletion of the addition on account of adopting the enhanced price of various goods. At the time of assessment, when the assessee was asked to explain such difference, it was stated that the AO had adopted enhanced value of certain goods which came to Rs. 5,47,680. The AO examined the claim and allowed rebate to the extent of Rs. 90,760 and added the balance amount to the income of the assessee. On appeal, the CIT(A) deleted the addition to the extent of Rs. 3,00,280 and confirmed the addition of the balance amount of Rs. 79,510. While the Revenue has challenged the relief granted by the CIT(A), the assessee has challenged the addition sustained by the CIT(A). 24. Learned Departmental Representative supported the order of the AO and the learned counsel, while supporting the order of the CIT(A) in allowing relief, further argued that the addition sustained by the CIT(A) is not justified. 25. We have considered the rival submissions. We find that the CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d fittings , the AO made an ad hoc disallowance of Rs. 10,000. Such disallowances by the AO were routine without pinpointing any specific items. The CIT(A) appreciated the facts by observing that no disallowance can be made without pinpointing the particular items. While upholding his findings, we dismiss both the grounds of appeal raised by the Revenue. 32. In ground No. 10, the Revenue has challenged the deletion of the addition of Rs. 4,88,100 on account of investment in the construction of residential-cum-shop premises. 33. During the course of assessment proceedings, the AO noted that the assessee has disclosed the investment of Rs. 11.39 lakhs in the construction of residential cum shop premises. He deputed his inspector to make enquiries. The inspector reported that the estimated investment in the construction was Rs. 15.47 lakhs. The AO accordingly made the addition of the differential amount which was deleted by the CIT(A). The Revenue is in appeal before us. 34. We have considered the rival submissions. It is admitted fact that the assessee has maintained the record for investment made by him in the construction of the property. As against that, the estimation by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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