9911796707
TMI Blog2014 (7) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... ounts, no defect had been pointed out in books of accounts, quantitative details of stock were duly certified by auditors – thus, the order of the FAA is upheld – Decided against Revenue. Ad-hoc disallowance – Held that:- FAA was of the view that the assessee has explained in detail that the employees are villagers doing hand jobs who come from far flung areas and then go back to their villages or some other business concerns - Salary register has been maintained and primary details are available regarding the employees to whom salary was paid - there are also certain flaws in the assessee’s explanation which cannot be brushed aside - on salary register, signatures of the employees have not been taken - some amount of disallowance is jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of ₹ 42,50,158/- made by Assessing Officer being the purchases made outside the books as discussed in detail in assessment order. 2. That the Ld.CIT (A) has erred in law and on facts in accepting the submission of the assessee that month wise closing stock details cannot be worked out by adopting an average uniform gross profit rate, which have been worked out by the Assessing Officer on the basis of month wise details of sales/purchases furnished by the assessee and on the basis of books of accounts. 3. That the Ld.CIT (A) has erred in law and on facts by restricting the disallowance at ₹ 4,00,000/- out of disallowance of ₹ 10,68,000/- by treating the disallowance made by Assessing Officer as excessive, whereas th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfaction of the Assessing Officer, an adhoc disallowance has been made. 5. The Ld.Counsel for the assessee Mr.Charitra Gupta, on the other hand, supported the order of the First Appellate Authority. He submitted that additions cannot be made on mathematical calculations and that too, without rejecting books of accounts. He relied on the decision of the Delhi A Bench of the Tribunal in the case of ITO vs. Anand Prakash Gupta in ITA 4026/Del/2011 order dt. 20th May, 2013, 36 CCH 084, Delhi Tribunal. On the issue of adhoc disallowance he relied on the order of the First Appellate Authority and also submitted that similar expenditure has been allowed in full by the Assessing Officer in order passed u/s 143(3) dt. 12.7.2011 for the subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal income of assessee u/s 69B, being unexplained investment in stock CIT(Appeals) deleted addition holding that there were no proper findings by Assessing Officer Held, assessee referred to paper book where Assessing Officer had tried to compute monthly closing stock in amounts Assessing Officer had tried to apply gross profit rate in every month and arrive at closing balance of stock every month Assessee submitted that above was totally erroneous approach He submitted that proper quantitative stock had been duly culled out from submissions made before authorities and same was submitted before CIT(A) It was found that assessee had maintained proper books of accounts, no defect had been pointed out in books of accounts, quantitat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 4.16 crores this year. However, there are also certain flaws in the assessee s explanation which cannot be brushed aside. Firstly, on salary register, signatures of these employees have not been taken. Secondly, the increase in salary is almost three times, while increase in turnover is less than two times. Considering both the sides of the arguments, I hold that some amount of disallowance is justified. But I find that amount disallowed by Assessing Officer is excessive. 11. The assessee has pointed out that in the subsequent Assessment Year the Assessing Officer has accepted this claim of the assessee u/s 143(3). The Ld.D.R. was not able to contradict the factual findings of the Ld.CIT(Appeals). Thus we uphold these findings ..... X X X X Extracts X X X X X X X X Extracts X X X X
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