9911796707
TMI Blog2012 (10) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... - Rs. 30,045/- -Out of Diwali expenses - Rs. 2,68,854/- -Out of advertisement expenses - Rs. 32,062/- 3. The assessee company is engaged in the manufacturing of copper pipes. Return of income was filed on 31.10.2007 declaring total income at Rs. 47,04,776/-. The case was selected for scrutiny and notice u/s. 143(2) of the Act dated 18.9.2008 was issued to the assessee. During the course of assessment, the Assessing Officer inter-alia noted that assessee has provided some information and failed to provide some of the information and documents. 4. Apropos issue of addition for low GP ratio On this issue Assessing Officer found that following is comparative results of the GP of the assessee are : Particulars Year ending - 31.3.2007 Year ending - 31.3.2006 Sales Rs. 6109.79 lacs Rs. 4105.76 lacs Gross profit Rs. 266.28 lacs Rs. 240.58 lacs GP rate Rs. 4.36% Rs. 5.86% 4.1 Assessee was asked to justify the fall in the GP rate. The assessee submitted that assessee's unit was excisable unit and maintaining the full quantitative details on accounts of sales/ purchase made during the year. There are no sales bills / purchase bills which were unaccounted for in the stock reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r for fresh examination. The Ld. Assessing Officer has given us opportunity to appear on 21.7.2010 and 23.7.2010. on both the days the appellant appeared through its Ld. Authorised Representative and the matter has been recorded in the remand report of the Assessing Officer dated 5.8.2010. A close look in the remand report would reveal that all the documents as asked for were duly produced barring the original cash vouchers which could not be produced on the scheduled date as those were inadvertently left in the office on the first day. On the second day i.e. on 23.7.2010 only purchase and sales bills were called for, by the Assessing Officer and the same was religiously produced before her and the report of the Assessing Officer would speak for itself. On 3.8.2010, Sh. Anuj Jain, Ca appeared alongwith the Director Sh. Ajay Gupta before the Assessing Officer and she was asked to state whether any other documents were specifically required by her and she has answered in negative. Both the persons in affidavit before you have given the matter. The moot question is regarding verification of trading result and it is stated that no cash sale or purchase was made and it will be demonst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort which was forwarded to the assessee for its comments. Ld. Commissioner of Income Tax(A) observed that following is the gist of the AO's submissions in this regard:- "Assessing Officer noted that cash book was asked to be verified first by the Assessing Officer. However, the assessee's counsel submitted that the same may not be verified, since the original vouchers have not been produced. Assessing Officer thereafter, verified the purchase bills on test check basis and no discrepancy was noticed in this regard. Assessing Officer further submitted that assessee was requested to produce all the original documents mentioned in the paper book filed on which the assessee wished to rely during the remand proceedings. However, the assessee simply produced the books of accounts and did not produce in original the pages 336 to 404 of APB-II. Thereafter, Assessing Officer observed that in the present case that it is seen that none of the circumstances of Rule 46A would apply to the assessee since the Assessing Officer had neither refused evidence not prevented the assessee to produce the evidence. Therefore, Assessing Officer submitted that in view of the above, additional evidence being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erference. 7. Against the above order the assessee is in appeal before us. 8. We have heard the rival contentions and produced the records. We find that the main grievance of the Assessing Officer in this regard is that the assessee has not submitted the requisite books of accounts and vouchers. Ld. Commissioner of Income Tax (A) further observed that at the remand stage this was not complied with and in this view of the matter lower authorities have invoked the section 145 and made the estimated addition of Rs. 91,64,692/-. In this regard, it is the submission of the assessee that the assessee has produced all the necessary documents and vouchers. Some documents in this regard which could not be produced before the Assessing Officer originally were subsequently produced before the Assessing Officer in the remand proceedings. However, the Assessing Officer has not considered the same. It has further been submitted that detail in this regard was also submitted before the Ld. Commissioner of Income Tax (A) who also failed to examine the veracity of the same. On the other hand, Ld. Departmental Representative's submissions in this regard is that assessee has failed to produce the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Rs. 30,045/- and Diwali Expenses Rs. 2,68,854/-. While disallowing the claims of expenditure, Assessing Officer noted that assessee has not given sufficient explanation regarding the business needs of the expenditure. he also noted that assessee was asked to explain the nature of expenses. As regards, advertisement expenses, Assessing Officer noted that assessee was asked to explain the expenses and how this expenditure was incurred for the purpose of business, but the assessee could not offer any explanation in this regard. Hence, Assessing Officer disallowed the expenditure. As regards, business promotion assessee was asked to explain the nature of expenditure. However, assessee did not submit any reply and hence, Assessing Officer opined that expenditure does not fulfill the need of the assessee. Hence, he disallowed the same. As regards, Diwali expenditure, Assessing Officer noted assessee was asked to explain the supporting evidence for incurring expense under this head. No proper supporting evidence was filed by the assessee, nor the business needs were established. Hence, Assessing Officer made the disallowance. 14. Upon assessee's appeal Ld. Commissioner of In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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