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TMI Blog2013 (7) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... eted addition - Held that:- It is pertinent to note that the books of account maintained by the assessee have not been rejected. No defect has also been pointed out by the AO with respect to the books of account. No discrepancies with regard to shortage affecting the yield were also pointed out by the AO. Thus addition made by the AO based on 2% shortage cannot be sustained. Addition u/s 69B for stock difference - CIT(A) deleted addition - Held that:- CIT(A) deleted the addition since the AO could not find any defect in the stock statement arrived at on the basis of physical verification. Further, AO had ignored the reconciliation statement for quantity difference submitted by the assessee. Thus it not necessary to interfere in the order of the CIT(A). - ITA No.2792/Ahd/2012 - - - Dated:- 21-6-2013 - Shri D. K. Tyagi, JM And Shri A. Mohan Alankamony, AM,JJ. For the Appellant : Shri Rahul Kumar, Sr. DR For the Respondent : None ORDER Per A. Mohan Alankamony: This appeal is preferred by the revenue aggrieved by the order of the learned CIT(A)-II, Surat dated 27-09-2012 in appeal No. CAS-II/388/10-11, for the assessment year 2008-09 passed u/s 250 read with s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge/commission expenses, (ii) addition of Rs.13,00,000/- u/s 68 of the Act on account of unexplained cash credit, (iii) disallowance of Rs.52,142/- on account of interest expenses, (iv) addition of Rs.37,35,148/- on account of suppressed sale and (v) addition of Rs.3,78,690/- u/s 69B on account of stock difference were made. On appeal, the learned CIT(A) allowed the appeal of the assessee by deleting all the additions/disallowances made by the learned AO against which the revenue has preferred this appeal before us. 5. Ground No.1 Deleting the addition of Rs.20,90,908/- made on account of disallowance of non-genuine brokerage expenses:- The learned AO observed that the assessee had debited Rs.21,46,305/- in the name of agents as commission. On further perusing the issue the following discrepancies were noted by the learned AO:- (a) In the month of March huge amount of commission of Rs.21,03,552/- was accounted without correlating to the concern sales bills. Therefore, it was clear that this amount is nothing but an adjustment entry. (b) On verification of commission bills various discrepancies with regard to the parties, address etc. were noticed for which no proper explanatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose. 8. Ground No.2 Deleting the addition of Rs.13,00,000/- made u/s 68 and disallowance of interest expenses on that of Rs.52,142/-:- It was observed by the learned AO that the assessee had obtained unsecured loan from various parties. To verify the genuineness of these persons, notice u/s 133(6) of the Act were sent which was returned as un-served. On further perusing the issue, the learned AO observed the following discrepancies based on which, he made an addition of Rs.13,00,000/- u/s 68 of the Act being disallowance of interest expenses:- (a) Address of confirmation given by party and in copy of return is different. (b) Signature in confirmation and signature in copy of his return provided is different. (c) Business place of assessee remain open only for two hour is not acceptable and in that case assessee shall furnish his residential or other address because its not possible for income tax department to ask postal service to serve notice in particular time. (d) Due to non providing of perfect address it is also not possible to issue summons to verify genuineness of lender. (e) Copy of return alone did not serve any purpose in absence of computation, copy of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO on very weak grounds. The basis given by AO for making disallowance that shortage of goods on account of job workers is not an acceptance theory, higher shortage leads to higher sale price of finished goods and only sample bills were produced by appellant, are again superficial and flimsy grounds. As per chart given in the submissions, appellant has shown better results in the form of turnover, gross profit and net profit in comparison to earlier year. The books of account maintained by appellant have not been rejected and accepted by AO as complete and without any error. No defects have been pointed out by AO in those books of account. In plethora of judgments, different courts and tribunals have held that unless the books of account of assessee are rejected, no estimation can be made. The normal shortage worked out by AO from 15% to 17% in this line of business is based on which details are not made clear by AO. Such details are not confronted to appellant which is clearly violation of natural justice. Why only 2% of shortage has been disallowed, it is not made clear by AO. The major part of job work has been carried out by outside parties to whom payments have been made acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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