9911796707
TMI Blog2013 (2) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... e Unaccounted advance – Search & Seizure – Document found during search shows that assessee has lent some advance money to employee for marriage and construction of house – Held that:- Advance given by assessee could not be controverted by assessee. Employee of the assessee-firm and the assessee was given specific opportunity in this regard by the AO during the course of assessment proceedings. The assessee could not prove with evidence that the amount pertained to the later A.Y 2007-2008. Employee has signed voucher of the assessee-firm on revenue stamp. Addition confirmed - In favour of revenue Depreciation u/s 32- Claim of depreciation was not made in the original return of income file u/s 139 – Assessee claim depreciation u/s 153A – Held that:- Following the decision in case of Eversmile Construction Co.Pvt.Ltd. (2011 (8) TMI 495 - ITAT MUMBAI) that the AO has to compute total income of the assessee on the basis of the return filed and there was no scope for arguing that the assessee has been rendered powerless to even lodge a claim in respect of which deduction was not allowed earlier. As the Revenue has not doubted the genuineness of the claim of the assessee for allowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Rs.2.30 lakhs representing the net profit – Partly allowed in favour of assessee - IT(SS)A No.233, 234, 235, 236, 237, 238 and 239/Ahd/2010 - - - Dated:- 7-8-2012 - G.C. Gupta And Tej Ram Meena, JJ. Appellant Rep by: Shri Sakar Sharma Respondent Rep by: Shri Katarsingh ORDER Per: G.C. Gupta: These seven appeals by the assessee for the Asstt.Year : 2001-2002, 2002-2003, 2003- 2004, 2004-2005, 2005-2006, 2006-2007 and 2007-2008 are directed against the order of the CIT(A)-IV, Ahmedabad. These are being decided with this consolidated order. IT(SS)A.No.233/Ahd/2010 (Asstt.Year : 2001-2002) 2. The ground no.1 of the assessee s appeal reads as under: 1. The ld.CIT(A) erred on facts and in law in confirming disallowance of interest of Rs.1,55,297/- u/s.40A(2)(b) of the Act. 3. The learned counsel for the assessee submitted that the similar rate of interest is allowed by the AO in the earlier years, though, the order of the assessment was framed under Section 143(1) of the Act. He submitted that during the relevant period, the highest rate of interest paid to outside parties as well as related parties was 18% per annum, and therefore no cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the IT(SS)A.No.233/Ahd/2010 of the assessee is allowed. IT(SS)A.No.234/Ahd/2010 (Asstt.Year : 2002-2003) The ground no.1 of the appeal of the assessee reads as under: 1. The ld.CIT(A) erred on facts and in law in confirming disallowance of interest u/s.1,98,521/- u/s.40A(2)(b) of the Act. 9. Both the parties before us has submitted that the issue of disallowance of interest u/s.40A(2)(b) of the Act is identical with the issue in the assessee s appeal for the asstt.year 2001-2002 in IT(SS)A No.233/Ahd/2010 with the only difference is that during this year the highest rate of interest paid to outside party was 17% as against 18% paid to related parties. 10. We have considered rival submissions. For the reasons recorded while disposing of ground no.1 in the assessee s appeal for the earlier assessment year 2001-2002 in IT(SS)A No.233/Ahd/2010, we decide the issue in favour of the assessee and the ground no.1 is allowed. 11. The ground no.2 of the assessee s appeal reads as under: 2. The ld.CIT(A) erred on facts and in law in confirming disallowance of Rs.2,01,513/- on account of bad debts without appreciating submissions and explanations of the appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asstt.year 2003-2004. A copy of Shri Ram Dulare Mistri s accounts has been filed at page no.363 to 368 of the paper book filed by the assessee. The learned DR referred to the relevant portions of the assessment order and the order of the CIT(A) in support of the case of the Revenue that the assessee has been taking inconsistent stand in this regard and in spite of opportunity, the assessee has not given any satisfactory explanation regarding the source of the amount lent out to Shri Ram Dulare Mistri who was employee of the assessee-firm during the relevant period. 19. We have considered rival submissions and have perused the orders of the AO and the CIT(A) and also copies of the explanation of the assessee and copy of the account of Shri Ram Dulare Mistri in the books of the assessee. We find that the fact that the assessee has given Rs.50,000/- and Rs.5,000/-to one Shri Ram Dulare Mistri could not be controverted on behalf of the assessee. Shri Ram Dulare Mistri was employee of the assessee-firm and the assessee was given specific opportunity in this regard by the AO during the course of assessment proceedings. The assessee could not prove with evidence that the amount pertain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the AO and the CIT(A) in support of the case of the Revenue. He has relied on the orders of the AO and the CIT(A). 25. We have considered rival submissions and perused the orders of the AO and the CIT(A). We find that the claim of the depreciation was made by the assessee in the return filed under Section 153A. We find that the issue is covered in favour of the assessee with the decision of the Mumbai Tribunal in the case of DCIT Vs. Eversmile Constructions Co. P. Ltd. (supra) wherein it was held that the AO has to compute total income of the assessee on the basis of the return filed and there was no scope for arguing that the assessee has been rendered powerless to even lodge a claim in respect of which deduction was not allowed earlier. We being in agreement with the decision of the Mumbai Tribunal in the case of DCIT Vs. Eversmile Construction Co. P. Ltd. (supra) and as the Revenue has not doubted the genuineness of the claim of the assessee for allowance of the depreciation, decide the issue in favour of the assessee and allow the ground no.1 of the assessee s appeal. 26. The ground no.2 of the assessee s appeal reads as under: 2. The ld.CIT(A) erred on facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and as such there was no claim of excess depreciation. The claim of depreciation has been denied merely because appellant claimed depreciation in return filed u/s.139 at a lower figure. 37. Both the parties before us submitted that the issue regarding claim of depreciation is identical with the ground no.1 in the assessee s appeal for A.Y.2004-2005 in IT(SS)A.No.237/Ahd/2010. 38. We have considered rival submissions. We find that the issue of claim of depreciation is identical with the decision in the assessee s appeal for A.Y.2004-2005 in Ground no.1 thereof. For the reasons recorded while disposing of ground no.1 of the assessee for A.Y.2004-2005 in IT(SS)A.No.236/Ahd/2010 in the foregoing paragraphs of this order, we decide this issue in favour of the assessee and ground no.2 of the assessee s appeal is allowed. 39. The ground no.3 of the assessee s appeal reads as under: 3. The ld.CIT(A) erred on facts and in law in confirming action of the AO in disallowing deduction claimed u/s.40(a)(ia) on payment basis amounting to Rs.5,13,093/- without appreciating that the said amount was disallowed in computation of income for AY 2005-06 due to delay in making payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on on account of deficit in stock at the time of search proceedings amounting to Rs.63,274/- was merely on the basis of suspicion and has been made without any basis. He submitted that overall yield is higher than the earlier years and shortage was due to ad hoc measurement of quantity of stock on the date of search. He categorically stated that no actual weighment was done by the department at the time of search. He submitted the GP and NP rate is better than the earlier assessment years and no defects in the accounts of the assessee were pointed out by the department. The learned CIT-DR on the other hand relied on the orders of the AO and the CIT(A). 45. We have considered rival submissions. We find that overall yield of the assessee is better than the earlier years and likewise the GP and NP rate were also better than the earlier years. There is a force in the learned counsel for the assessee that no actual weighment was done and it was only way of ad hoc measurement of quantity of stock on the date of search. We find that the difference in the value of stock at Rs.63,274/- is only marginal, and therefore no case of addition could be made out by the department on this issue, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lakhs as tuvar dal and Rs.5.69 lakhs as churi dal . The assessee could not explain that to whom these were sold and where the entries were made in its accounts. In these facts of the case, we are of the considered opinion that the sale figure of Rs.17.25 lakhs and Rs.5.69 lakhs making the total of Rs.22.94 lakhs seems to be unaccounted sales for which the profit element as well as investment element is addable as income of the assessee. We find that it would not be reasonable to add the entire amount of Rs.22.94 lakhs taking the unaccounted sales as undisclosed income of the assessee. In this view of the matter, we hold that it shall be reasonable to add the net profit element at the rate of 5% of the total sale and also 5% on account of investment element in the unaccounted sales of dal totaling to Rs.22.94 lakhs, and accordingly, we sustain the addition of Rs.2.30 lakhs representing the net profit and the investment element in the unaccounted sales of the dal out of total addition to Rs.22,95,264/- made by the AO, and accordingly, the ground no.2 of the assessee s appeal is partly allowed. 49. The ground no.3 of the assessee s appeal reads as under: 3. The ld.CIT(A) e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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