9911796707
TMI Blog2015 (2) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... . We, therefore, set aside the order of the CIT(A) on this issue and restore the order of the AO on this issue. - Decided in favour of revenue. Disallowance u/s.40(a)(ia) - non-deduction of TDS on the payment made for packing material - Held that:- The purchases on account of plastic trays, cups, spoons and plastic dishes etc. which did not carry the logo of the assessee and were in the nature of purchases. The purchases were of standardized material available in market. These submissions of the assessee could not be controverted by the Revenue by bringing any material evidence on record. We are, therefore, of the view that the purchases made by the assessee from the aforesaid three parties cannot be considered as being a case of contract which would require deduction of TDS u/s 194C of the Act and, therefore, no disallowance u/s 40(a) (ia) of the Act is called for. -Decided in fvaour of assessee. Late remittance of employees contribution to PF - disallowance confirmed - Held that:- ssue now stands covered against the assessee by the decision of the Hon’ble Gujarat High Court in the case of Commissioner of Income-tax-II Vs. Gujarat State Road Transport Corporation, (2014 (1) TMI 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... KUMAR YADAV AND SHRI N.S. SAINI, JJ. For the Appellant : Shri G.C. Pipara For the Respondent : Shri Dinesh Singh, Sr.DR ORDER PER N.S. SAINI, ACCOUNTANT MEMBER: These are cross appeals by the assessee and the Revenue against the order of the Commissioner of Income-Tax (Appeals)-XI, Ahmedabad dated 8.3.2011. 2. The Ground no.1 of the appeal of the assessee is as under: "1. The ld.CIT(A) has erred in confirming the estimation of sales at ₹ 3.75 crores as against sales as per books of ₹ 3,45,32,261/-. In view of facts and submissions filed, the ld.CIT() ought to have accepted the sales as per books of accounts." The ground no.1 of the appeal of the Revenue is as under: "1. The ld.CIT(A) has erred in law and on facts in estimating the sales at ₹ 3.75 crores as against ₹ 5 crores estimated by the AO." 3. The brief facts of the case are that the AO made addition by observing as under: "1. The assessee was asked to submit month-wise as well as item-wise breakup of purchase and consumption of raw materials, production, sales of finished goods and closing stock, for year under consideration. In response to the query raised, the assessee company, vid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , i.e. A.Y.2006-07, the expenses under the following heads have shown significant increase:- Expenses head A.Y.2006-07 A.Y.2007-08 Cold storage rent 25320 79341 Power supply charges 1887088 2014104 Coal & Fuel expenses 110285 153008 Advertisement 347870 896505 Packing materials & utilities 488794 735748 Decoration charges 154200 220580 4.6. As discussed above, the assessee is not maintaining any item-wise as well as quantity-wise details of purchases, consumption, production, sales, etc. Vide submission dated 09.12.2009, the assessee has expressed its inability to provide the above details. Hence, in absence of records showing complete details of production, consumption, stock, sales, cost working of major items, etc., no proper examination of the-book results shown by-the assessee could be carried out. It is stated that the assessee is intentionally not maintaining the basic details of its business, so as to not permit the AO to arrive at the correct picture of its business. Considering these facts, it is held that the sales disclosed by the assessee is not found acceptable and therefore, I am constrained to estimate the total sales of ₹ 5 crores, by r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rough the assessment order as well as my own findings en similar issue for A.Y.2006-07 and the orders of the Hon'ble ITAT of earlier years. The A.O. has consistently estimated the GP @ 32% in all the earlier years right from A.Y. 2001-02 to 2006-07. My predecessor restricted the said GP to 31% for A.Y. 2003-04 to A.Y. 2005-06. On facts of the case, I have restricted the G.P. for A.Y.2006-07 at 29%. That since during the year under dispute, the appellant has shown a better GP of 29.65% compared to earlier year, I see no reason for estimation of G.P. Keeping in view the said fact, the A.O. is directed to accept the GP rate of 29.65%. Accordingly, the Ground of Appeal No. 3 stands allowed 5. The DR supported the order of the AO. 6. The AR submitted that in the earlier Asstt.Years 2001-02 and 2003-04, materials were found during the course of search, which showed that the assessee has suppressed its turnover, and therefore, the turnover of the assessee was estimated by the AO. In the present year in appeal, there is no such material for estimating sales of the assessee. 7. We have considered rival submissions and perused the orders of the lower authorities and material availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dhinagar. In the above facts and circumstances of the case, in our considered view, the AO is fully justified in estimating the turnover of the assessee at ₹ 5.00 crores (Rupees Five Crores). We, therefore, set aside the order of the CIT(A) on this issue and restore the order of the AO on this issue, and thus, this ground of the appeal of the Revenue is allowed and that of the assessee is dismissed. 11. The Ground no.2 of the appeal of the assessee is as under: "2. The ld.CIT(A) has erred in law and on facts in confirming the addition of ₹ 1,24,270/- on account of disallowance u/s.40(a)(ia) of the At on account of non-deduction of TDS on the payment made for packing material to two parties by mechanically following the decision taken by him in the case of the appellant in A.Y.2006-07 without independent consideration and appreciation of the facts and legal position. In view of facts and submissions filed coupled with legal position, the impugned addition of ₹ 1,24,2760/- requires to be deleted." 12. Brief facts of the case are that the AO disallowed deduction for expenditure incurred on packing material of ₹ 1,24,270/- on the ground that no TDS was deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Accordingly, the impugned addition of ₹ 18,602/- requires to be deleted." 17. Brief facts of the case are that the AO disallowed ₹ 18,602/- on account of employees' contribution to PF as the same were not deposited within the stipulated date as per the provisions of section 36(1)(va) and 2(24)(x) of the Act. 18. On appeal, the CIT(A) confirmed the disallowance. 19. Before us, the AR of the assessee submitted that the issue now stands covered against the assessee by the decision of the Hon'ble Gujarat High Court in the case of Commissioner of Income-tax-II Vs. Gujarat State Road Transport Corporation, (2014) 366 ITR 170 (Guj) wherein it was held that employees' contribution to provident fund and/or state insurance fund not credited by the assessee to the accounts of the employees in relevant funds within the due dates as specified in section 36(1)(va) of the Act, the amounts are not deductible. Respectfully following the above decision of the Hon'ble Gujarat High Court, we dismiss the ground of appeal of the assessee. 20. The ground no.2 of the Revenue's appeal is as under: "2. The ld.CIT(A) has erred in law and on facts in adopting GP rate of 29.65% as agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this, the assessee has shown gross profit of ₹ 1,02,38,309/-. Therefore, an addition of ₹ 57,61,691/- is made to the income of the assessee. Penalty proceedings u/s.271(1)(c) of the Act are initiated for concealing the particulars of income/furnishing inaccurate particulars of income." 22. On appeal, the CIT(A) held that the AO has consistently estimated the GP at 32% in all the earlier years starting from Asstt.Year 2001-02 to 2006-07. He observed that his predecessor restricted the said GP to 31% for A.Y.2003-04 to 2005-06. He observed that on the facts of the case, he had restricted the GP for A.Y.2006-07 at 29%. Since during the year under consideration, the assessee had shown better GP at 29.65% compared to earlier years, he held that there was no reason for estimation of GP, hence, the CIT(A) directed the AO to accept GP rate at 29.65% in instead of 32% estimated by the AO. 23. The DR relied on the order of the AO, whereas, the AR of the assessee submitted that in A.Y.2006-07, the Tribunal in the case of assessee itself has estimated the GP at 29%. 24. After considering the rival submissions, we find that as no distinguishing facts have been pointed out during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The DR relied on the order of the AO. 34. We find that the finding of the CIT(A) in allowing depreciation on vehicles purchased in the name of director was confirmed in appeal by the Tribunal in the Asstt.Year 2006-07 in ITA No.1794/Ahd/2010 and Co No.188/Ahd/2010 vide order dated 19.4.2013. Therefore, respectfully following the same, we dismiss this ground of appeal of the Revenue. 35. The ground no.5 of the Revenue's appeal is as under: "2. The ld.CIT(A) has erred in law and on facts in deleting the disallowance of ₹ 1,21,432/- out of expenses u/s.40A(3)." 36. Brief facts of the case are that the AO observed that the assessee has made cash payment for various bills aggregating to ₹ 6,07,164/- to Torrent Power AEC Ltd. which was in violation of provisions of section 40A(3) of the Act. Since the assessee had not furnished any explanation, he disallowed 20% out of the said amount which works to ₹ 1,21,432/-. 37. On appeal, the CIT(A) deleted the disallowance by observing that as the book results of the assessee was rejected, and the AO estimated the sales and GP ratio, no separate addition was warranted. The CIT(A) further observed that the assessee has furn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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