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TMI Blog2015 (2) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... side. The assessee has tried to explain that there was increase in the cost of input material during the year, and there was a change in the manufacturing process of the assessee during the relevant year. Considering the totality of the facts of the case, and the pleading of the assessee, we are of the view that the ends of justice shall be met, if the addition on account of GP is restricted to ₹ 12,50,000/- as against ₹ 19,63,023/- made by the AO and deleted by the CIT(A) - Decided partly in favour of revenue. Deemed dividend - CIT(A) granting relief of rs.26,30,779/- on account of advance of ₹ 43,05,779/- given to the assessee by the company through its unit M/s.Akshay Chemicals (NIPL) - Held that:- CIT(A) has passed a well reasoned speaking order on this issue. The payment against the amount receivable by the assessee could not be taken as deemed dividend in the hands of the assessee. The working of addition after allowing adjustments of the amount payable on the date of payment comes to ₹ 15,44,232/-. We find that the CIT(A) has directed the addition of ₹ 16,75,000/- by adding the figure of ₹ 66,742/- paid to the assessee by the company in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .3329/Ahd/2010 - Astt.Year 2007-08 (Revenue s appeal) 2. The ground no.1 of the Revenue s appeal is as under: 1 (i) On the facts and in the circumstances of the case, the ld.CIT(A) erred in deleting the addition of ₹ 19,63,023/- on account of gross profit by invoking the provisions of section 145(3) of the Act, without appreciating the fact that the AO had pointed out various infirmities/discrepancies in the books of accounts. (ii) The ld.CIT(A) ought to have upheld the action of the AO in making the addition on account of low yield of finished product of ₹ 19,63,023/-. 3. The learned DR submitted that there was an abnormal increase in the consumption of power and fuel during the relevant period as compared to earlier year, and the assessee could not explain the reason thereto, and therefore, the addition was made by invoking the provision of section 145(3) of the Act. He submitted that this consumption of sodium acetate solution was 1776.81 MT during the year as against 96.05 MT in the immediately preceding assessment year. In sodium acetate crude, the consumption was 681.00 MTs. as against 1018.175 MT during the preceding year. He sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vouchers for the purchase of raw-material, power and fuel and production related register, stock register etc. were not produced before him despite giving a number of opportunities. In these facts, we are of the view that provisions of section 145(3) of the Act were rightly invoked by the AO. However, we find that the GP rate of last year at 32.03% was applied for the relevant period, resulting in addition of ₹ 19.63 lakhs, which seems to be on the higher side. The assessee has tried to explain that there was increase in the cost of input material during the year, and there was a change in the manufacturing process of the assessee during the relevant year. Considering the totality of the facts of the case, and the pleading of the assessee, we are of the view that the ends of justice shall be met, if the addition on account of GP is restricted to ₹ 12,50,000/- as against ₹ 19,63,023/- made by the AO and deleted by the CIT(A) and the ground no.1 of the appeal of the Revenue is partly allowed. 6. The ground no.2 of the appeal of the Revenue is as under: 2. On the facts and in the circumstances, the ld.CIT(A) erred in granting relief of rs.26,30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (e) of the Act is applicable in the facts of the case of the assessee. 9. We have considered rival submissions and perused the orders of the AO and the CIT(A), and also the copy of ledger account in the books of M/s.Nitrochem India Pvt. Ltd. as appearing at page no.15 and 16 of the compilation filed before us. We find that the CIT(A) has passed a well reasoned speaking order on this issue. The payment against the amount receivable by the assessee could not be taken as deemed dividend in the hands of the assessee. The working of addition after allowing adjustments of the amount payable on the date of payment comes to ₹ 15,44,232/-. We find that the CIT(A) has directed the addition of ₹ 16,75,000/- by adding the figure of ₹ 66,742/- paid to the assessee by the company in February and March, 2007 in the figure of ₹ 15,44,232/- and difference of ₹ 64,000/- was ignored being a meager amount. In these facts, we hold that there being no mistake in the order of the CIT(A) on this issue, the same is confirmed and the ground no.2 of the Revenue is dismissed. CO No.14/Ahd/2011 - Asstt.Year 2007-08 (Assessee s CO) 10. The ground no.1 of the assessees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- for A.Y.2000-01, ₹ 1,00,000/- for A.Y.2004-05 and ₹ 8,45,000/- for A.Y.2005-06] is prayed to be cancelled. 15. The learned counsel for the assessee submitted that the additional amount of income was disclosed in the return filed after search under the provision of section 153A of the Act. The penalty under section 271(1)(c) of the Act was levied on account of additional income disclosed by the assessee in the returns filed under section 153A of the Act. He submitted that the CIT(A) has dismissed the appeal of the assessee by following the decision of the Third Member of the jurisdictional Ahmedabad Tribunal in ACIT Vs. Kirit Dahyabhai Patel, (2009) 129 ITD 159(Ahd)(TM). He submitted that this decision has been reversed in appeal by the Hon ble Gujarat High Court in Kirit Dahyabhai Patel Vs. ACIT in Tax Appeal No.1181, 1182 and 1185 of 2010 order dated 3.12.2014. He submitted that the decision of Hon ble jurisdictional High Court is binding, and therefore, the penalty should be cancelled. The learned DR has relied on the order of the AO. 16. We have considered rival submission and perused the orders of the AO and the CIT(A), and also the decision of the Hon bl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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