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TMI Blog2014 (10) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing grounds of appeal: 1. "On the facts and in the circumstances of the case, the CIT(A) has erred in law in deleting the addition of Rs. 7,11,260/- out of Rs. 8,54,080/- made by the AO on account of low Gross Profit by applying the GP rate of 9.7% as against 12% applied by the Assessing Officer by ignoring the fact that in the case of Smt. Amrit Rani Prop. M/s Niranjan Dass & Sons, GP was shown @ 16.46% during the relevant accounting period and in the case of Bhagat Ram Godha Ram, Punjabi Market, Saharanpur, GP was shown @ 12.30%; 2. On the facts and in the circumstances of the case, the CIT(A) has erred in law in deleting the disallowances of Rs. 1,62,545/- out of Rs. 2,50,950/- made by the AO on account of various expenses by ignoring the fact that these expenses were either excessive or fully un-vouched & unverifiable; 3. On the facts and in the circumstances of the case, the CIT(A) has erred in law in deleting the addition of Rs. 10,875/- made by the AO on account of difference in closing balance in respect of some creditors by ignoring the fact that the difference in credit balance was noticed at the time of assessment proceedings; 4. On the facts and in the circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submissions of both the parties and have perused the record of the case. 6. Admittedly, the AO has not rejected the books of account but assessee in course of survey had surrendered the amount of Rs. 4,50,000/- to cover up the discrepancy in stock and other items found at the time of survey. Therefore, the books of account were not reliable. The estimation made by ld. CIT(A) is quite reasonable considering the entirety of facts and circumstances particularly because in the case of M/s Niranjan Das & Sons, Saharanpur, the concern was dealing in retail trading of gents suiting and shirting, whereas the assessee dealt in wholesale as well as the retail trading of ladies suits. Therefore, there was no basis to draw comparison with this firm. Similarly, M/s Bhagat Ram Godha Ram was dealing in retail as well as wholesale trading of branded gents suiting and shirting, whereas assessee dealt in wholesale as well as retail trading of ladies suits. Therefore, the trading results of this firm were also not the guiding factor. We, therefore, do not find any reason to interfere with the order of ld. CIT(A). 7. In the result, this ground is dismissed. 8. Brief facts apropos ground no. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT(A) restricted the addition to Rs. 34,512/- being 15% of the expenses claimed by assessee. As regards the disallowance under the head 'salary of Rs. 1 lakh', ld. CIT(A) restricted the disallowance to Rs. 50,000/-, inter-alia, observing as under: "The facts of the case, submissions made by the appellant, remand report of the AO and rejoinder of the appellant have been carefully considered. It is observed that the AO had made addition of Rs. 1,00,000/- being disallowance of expenses debited under the head 'salary' on the ground that no salary/attendance register was maintained. Further, salary paid to family members was on the higher side in comparison to other employees. On the other hand the appellant has contended that salary paid in terms of percentage of sales is lower by 0.17%. Further, it has been contended that the individual salary paid to family members was lower than the salary payable to a clerk of a bank/State Government/any corporate house. The appellant has furnished copy of account salary in the ledger of the appellant. It is observed that the AO has not brought any adverse material evidence on record to suggest that the salary paid to family members was exces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the appellant have been carefully considered. It is observed that the AO had made addition of Rs. 10,875/- as there was difference in closing balance shown by Varundev Overseas (P) Ltd. (Rs. 5450/-) and Bemi Tex (Rs. 5,425/-). On the other hand, the appellant has contended that the appellant was allowed at an agreed rate of discount by the creditors, subject to the condition that the payment was made within time. In view of the above, the appellant accounted for the discount at the time of making payments and also raised a debit note to the concerned party. Some of the parties account for the cash discounts on the date of issuing bills itself without mentioning the same on the purchase bills. As such, the payment of bills outstanding at the end of the year were made by the appellant in the next year, the discount/rate difference was accounted for by the appellant. As per the appellant the copy of account of next year i.e. 2010-11 of the above referred two parties were submitted to the AO during the course of assessment proceedings wherein the aforesaid amounts stood debited on the date of payment made. The appellant has furnished copies of account of the aforesaid two parties as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant's family. In light of the above facts it is held that the AO was not justified in making addition of Rs. 81,500/-. The same is directed to be deleted. Ground No. 11 is allowed." 18. Having heard both the parties, we do not find any reason to interfere with the order of ld. CIT(A) because the findings of ld. CIT(A) that assessee had not significantly contributed towards withdrawals of household expenses as family members had substantially contributed towards the family requirements have not been controverted by Department. We, accordingly, confirm the order of ld. CIT(A). 19. In the result, the Department's appeal is dismissed. 20. Now, we take up the ITA No. 5206/D/2012. The assessee has taken following grounds of appeal: 1. "Because the ld. CIT(Appeals) has grossly erred in law and on facts in applying GP rate of 9.7% as against 9.24% declared by the appellant and thereby confirming part addition of Rs. 1,42,820/- in the income of the appellant. 1.1 Because the AO did not find any discrepancy in the books of accounts and, therefore, the ld. CIT(Appeals) was wholly unjustified in applying the GP rate of 9.7% (as against 12% by Assessing Officer) instead of 9.24% dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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