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TMI Blog2016 (9) TMI 381X X X X Extracts X X X X X X X X Extracts X X X X ..... venue Disallowance u/s 40A(3) being 20% of total payment - Held that:- As noted that the payments were made in excess of ₹ 20,000/-. Therefore, we find no infirmity in the orders of the authorities below - Decided against assessee Addition u/s 40(a)(ia) of legal and professional expenses - TDS was not deducted - Held that:- No force in the submission of the learned counsel for the assessee as the total payment under the head “legal and professional charges” fell within the provisions of section 40(a)(ia) of the Act, hence, the disallowance confirmed by the learned CIT(A) is upheld.- Decided against assessee Disallowance on account of various expenses being telephone expenses, vehicle expenses, depreciation, travelling and conveyance expenses - Held that:- The assessee repeated the same arguments and vehemently argued that the disallowances were made without pointing out any specific defect or instance, hence such disallowance need to be deleted nned not to be accepted.- Decided against assessee - I.T.A. No. 374/Ind/2014, C.O. No. 40/Ind/2014 - - - Dated:- 27-7-2016 - SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER For The Revenue : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll deal with ground no. 1 of the revenue s appeal. 4. Ground no. 1 relates to deleting the addition of ₹ 8,99,950/- on account of undervaluation of closing stock. The facts apropos to this ground are that the assessee has made purchases of ₹ 44,97,813/- on 30.30.2005 and 31.3.2005. However, the assessee has shown the closing stock of hatching egg at ₹ 35,98,223/-. The Assessing Officer also observed that there was no sale of hatching egg as per the trading account. Therefore, the assessee was asked to explain the same but no satisfactory reply was furnished. According to the Assessing Officer, there is a normal process for hatching egg which requires 21 days to convert broiler to chicks. Therefore, the Assessing Officer made the addition of ₹ 8,99,590/- being the difference of purchases made on 30.3.2005 and 31.3.2005 (Rs.44,97,813 (-) ₹ 35,98,223) and closing stock disclosed by the assessee, towards undervaluation of closing stock. 5. Aggrieved with this order of the Assessing Officer, the assessee filed appeal before the learned CIT(A). The learned CIT(A) observed that the Assessing Officer failed to examine the explanation of the assessee that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has purchased chicken from M/s Simran Hatcheries Ltd., Dhulia, of ₹ 55,30,554/- and from M/s Singh Hatcheries of ₹ 67,88,282/- aggregating to ₹ 1,23,18,636/- and as per the audited trading account, total purchases of ₹ 95,60,261/- are shown. Therefore, the Assessing Officer was of the view that the assessee has made unaccounted sale to the tune of ₹ 32,23,011/- during the year on which the Assessing Officer has worked out GP @ 14.41% as disclosed in the audit report and, accordingly, made the addition of ₹ 4,64,436/-. The Assessing Officer further made the addition on account of unexplained purchases at ₹ 27,58,575/- being the difference of total purchases of ₹ 1,23,18,836/- from the aforesaid two parties and purchases of chicken shown in the audited books of accounts at ₹ 95,60,261/-. 11. In appeal before the learned CIT(A) it was submitted by the assessee that a typographical error occurred in the tax audit report in the office of the auditor, details of which, as per the certificate given by the CA, are as under :- S.No. Name of party Purchases as per Tax audit report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned CIT(A) was not convinced with the explanation of the assessee and confirmed the addition made by the Assessing Officer. Now the assessee is in cross objection before us. 17. Before us, the learned counsel for the assessee submitted that the learned CIT(A) has overlooked the basic intent of the legislature behind enacting section 40A(3) and it was stated that the payments made were never debited to P L account and the Assessing Officer has not doubted the genuineness of the transaction. 18. On the other hand, the learned DR relied upon the orders of the authorities below. 19. We have considered the rival submissions of the parties and noted that the payments were made in excess of ₹ 20,000/-. Therefore, we find no infirmity in the orders of the authorities below. Accordingly, this ground of cross objection is dismissed. 20. Ground no. 2 relates to addition of ₹ 18,700/- u/s 40(a)(ia) of the Act out of legal and professional expenses. 21. Briefly stated, the facts of the case are that the addition of ₹ 83,580/- was made by the Assessing Officer u/s 40(a)(ia) of the Act for non-deduction of TDS on consultancy and legal professional charges. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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