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TMI Blog2014 (6) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... ove the profit declared by the assessee – Decided partly in favour of Assessee. Addition u/s 43B and section 40A(3) of the Act - Estimation of income from business – Held that:- The contention of the assessee is accepted that the income of the assessee from business, having been determined by resorting to estimation, there is no scope for any separate addition – Relying upon Indwell Constructions V/s. CIT [1998 (3) TMI 121 - ANDHRA PRADESH High Court] – thus, the additions are set aside - the income that may be determined by the AO for each of the years, shall not fall below the income returned by the assessee for the relevant year, and in case returned income is higher for any year(s), returned income shall be accepted – Decided partly in favour of Assessee. - ITA No.1212/Hyd/2009, ITA No.1213/Hyd/2009, ITA No.1214/Hyd/2009, ITA No.1215/Hyd/2009, ITA No.1216/Hyd/2009, ITA No.1217/Hyd/2009 - - - Dated:- 12-2-2014 - Chandra Poojari, AM And Smt. Asha Vijayaraghavan,JM,JJ. For the Appellant : Shri S. Rama Rao For the Respondent : Shri B. Yadagiri, DR ORDER Per Smt. Asha Vijayaraghavan, Judicial Member: These six appeals, filed by the assessee, are directe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifference in purchases Rs. 74,48,113 2001-02 Difference in sales Rs. 2,63,70,004 Additio0n u/s. 43B Rs. 5,91,571 Addition u/s. 40A(3) Rs. 1,64,176 2002-03 Difference in purchases Rs. 70,19,851 Difference in sales Rs. 1,26,67,326 Additions u/s. 43B Rs. 13,96,518 2003-04 Difference in purchases Rs. 66.69,900 Difference in sales Rs. 1,39,44,327 Addition under S.43B Rs. 2,85,3851 Addition under S.40A(3) Rs. 1,50,799 2004-05 Difference in purchases Rs. 1,22,94,537 Difference in sales Rs. 1,59,23,157 Addition under S.43B Rs. 19,90,990 Addition under S.40A(3) Rs. 3,32,482 2005-06 Difference in purchases Rs. 33,18,462 Difference in sales Rs. 1,06,12,645 Addition under S.43B Rs. 1,17,107 Addition under S.40a(ia) Rs. 39,500 4. Aggrieved by the assessments made with the above additions, assessee preferred appeals before the CIT(A). The CIT(A) sent copies of the appeals to the Assessing Officer, vide letter dated 20.2.20008, and also gave appropriate notices of hearing with copies to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferring to the discrepancies noticed and the additions made, the CIT(A) held as follows- 4.3.4. The figures in the above charts (page 5, 6 of this order) have been verified by the Assessing Officer during the remand proceedings. It will be clear on taking a book at the above figures that in some years there is excess purchase shown by the Appellant while in other years the purchases shown are short. Overall the Appellant has shown Rs.1,87,98,842 worth of short purchases in this return of income from the assessment year 2000-01 to 2005-06. Looking at the sales, once again it is noticed that in some years the sales shown by the Appellant are less than those estimated by the Sales Tax Department while other years the Appellant has shown more sales than those estimated by the Sales Tax Department in its books for the above six years. I find form the above that the Assessing Officer has added excess purchases as well as short purchases even though the sales are disclosed. From the above, I find that there is no doubt that there are discrepancies which the appellant has not been able to reconcile. However, the Assessing Officer has not brought forth any evidence to bring on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, the CIT(A) sustained the additions made by the Assessing Officer under S.43B and S.40A(3) of the Act. 7. Aggrieved by the additions sustained by the CIT(A), assessee preferred these appeals before us. 8. Originally, assessee raised only the following grounds contesting the directions given by the CIT(A) in relation to the GP additions, and those additions sustained by the CIT(A) in that process. Those grounds originally, common in these appeals, read as follows- 1. The CIT(A) is not justified while directing to recompute the profits of each year by adding 1% gross profit in each assessment year over and above the declared gross profit, calculated as 1% of the sales declared by appellant without the component of sales tax added to the turnover, over and above the income declared, on the facts and in the circumstances of the case. 2. Assessee has also filed additional grounds in the appeals for the assessment years 2001-02 to 2005-06, whereby the additions made by the Assessing Officer and sustained by the CIT(A) by the impugned order dated 30.9.2008 in terms of S.43B and S.40A(3) are also contested. Such additional ground, taken for the assessment year 2001-02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the CIT(A) has already given reasonable relief to the assessee, and there is no justification for any further interference. 11. We heard both the parties and perused the orders of the lower authorities. Assessee is in the business of purchase and sale of cars as a dealer of Maruti Udyog Ltd., and as noted by the CIT(A) itself, there is no scope for any business outside the books of account in this line of business of the assessee. At the same time, there is no dispute with regard to differences in the purchases as per the books of account of the assessee and as per the MUL on the one hand, and sales as per the books of the assessee and the sales as per the Sales Tax Department on the other. Taking into account various discrepancies in the books of account, the CIT(A) rejected the books of the assessee, and proceeded to estimate the income of the assessee from business. Considering the unreconciled differences on account of sales and purchases as noted above, the CIT(A) has directed the Assessing Officer to make a uniform addition worked out at 1% of the sales declared by the assessee, net of the sales tax. As noted above, assessee's grievance in the first place is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee, so as to nullify the discrepancies in the turnover noticed. We order accordingly. 12. Now turning to the other grievance of the assessee for the assessment years 2001-02 to 2005-06 with regard to additions made in terms of S.40A(3) and S.43B of the Act, we agree with the learned counsel for the assessee, that the income of the assessee from business, having been determined by resorting to estimation, there is no scope for any separate addition in view of the decision of the jurisdictional High Court in the case of Indwell Constructions V/s. CIT(232 ITR 776). We accordingly delete the additions made by the Assessing Officer and sustained by the CIT(A) in this behalf, accepting the grounds of the assessee in this behalf. 13. We hasten to add before parting with these appeals, that the income that may be determined by the Assessing Officer for each of these years, shall not fall below the income returned by the assessee for the relevant year, and in case returned income is higher for any year(s), returned income shall be accepted. 14. In the result, all the six appeals of the assessee are partly allowed. Order pronounced in the court on 12.2.2014. - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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