9911796707
TMI Blog2013 (4) TMI 314X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowing whole of the expenses is not correct. CIT(A) rightly concluded that out of total expenditure of Rs. 22,69,989/-, Rs.13,16,265/- was on account of salary and wages and Rs.4 lakhs was on account of management consultancy on which TDS was deducted - disallowance of expenses by AO without recording the factual finding was not justified - no interference in the order of CIT(A) on this account required - against revenue. Unexplained cash credit - CIT(A) deleted the addition - Held that:- As on account of share application money received from EN Singapore through proper banking channel and money had traveled from Singapore account of EN Singapore. Considering the copy of Pay Order of Rs.20 lakhs & copy of confirmation of Singapore c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akhs whereas the purchases were to the tune of Rs.11.74 lakhs only and, therefore, he observed that assessee was having huge g. p. Ratio. However, the assessee had declared GP ratio which was quite less as compared to GP ratio calculated from the sales and purchase figures up to October, 2006. The Assessing Officer also observed many discrepancies and listed thrice in his order at page 2,3 4 and from the observations made he concluded that the main object of company was to adjust the un-explained cash credit money received from EI EN Singapore. The Assessing Officer observed that no such documents were filed as to prove that shares were allotted to EN Singapore. Therefore, he held that business was not genuine and entries were generated o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when books of accounts were rejected, the Assessing Officer should have given opportunity to assessee to show cause as to why the assessment should not be completed to the best his of judgment. iv) That Assessing Officer had rejected the books of accounts due to discrepancies mentioned at page 2-4 of assessment order and submitted that the discrepancy as mentioned by Assessing Officer were either not a discrepancy at all or was verifiable from record itself. v) That the figure of sale arrived at by Assessing Officer up to October, 2006 at Rs.20.05 lakhs was not correct and the actual figure was Rs.18,04,863/-. vi) That it is general practice that some times goods are received earlier as per challan and the bill is received latter on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are minor expenditure on account of running the business. It is seen that the Assessing Officer has made sweeping statements that no business was conducted, however, I find that the Assessing Officer has accepted the entire sales and purchases and only the entire expenditure incurred has been disallowed." 5. With regard to addition u/s 68 of the Act amounting to Rs.25 lakhs, the Ld AR submitted before Ld CIT(A) that the assessee had started business operation only during the year and had received share application money from EN Singapore and in this respect copy of share application money account, copy of confirmation from Singapore company, copy of bank account of EN Singapore, copy of Demand Draft of Rs.20 lakhs and registration proof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal before this Tribunal. 7. At the outset, the Ld DR argued that Assessing Officer had proved that no business was done by the company and in this respect page 2 to 4 of assessment order was read. He further argued that no books of accounts were produced before the Assessing Officer and the Assessing Officer has seen the whole transactions in its entirety and after holding that transactions were bogus and there was no business undertaken by the company had disallowed all expenses. Continuing his arguments, he submitted that Ld CIT(A) accepted additional evidence despite Assessing Officer's insistence that additional evidences should not be accepted. In view of above, the Ld DR submitted that Assessing Officer had rightly made the additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. We have heard the rival submissions of both the parties and have gone through the material available on record. We find that company is a private limited company registered under the Companies Act and is liable to statutory audit under Companies Act and tax audit u/s 44AB of the Income Tax Act, 1961. A copy of the audited balance sheet along with tax audit report u/s 44AB of the Act is placed at paper book pages 16 to 35. The Assessing Officer had made the disallowances of all expenses excluding audit fees of Rs.22,472/- alleging that the company had not done any business and it had booked expenditure only to adjust share application money amounting to Rs.25 lakhs. We are not able to understand this proposition of Assessing Officer as ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
