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TMI Blog2017 (7) TMI 915X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to ₹ 83,85,200/- and expenses under head other expenses amounting to ₹ 86,84,062/-. We are, therefore, inclined to set aside this issue is back to file of Ld. AO for a suo motu verification of these entries in books of accounts. Ld. AO shall take into consideration all documents that may be filed by assessee to establish its claim and may verify to his satisfaction as per law regarding the identity, creditworthiness, and genuineness of the transaction in respect of credit entries. Assessee is directed to furnish all the necessary details like bills/vouchers/discount coupons etc., before Ld. AO for purposes of adjudication of these grounds. - ITA No. 2401/Del/2012 - - - Dated:- 24-3-2017 - SH. R. K. PANDA, ACCOUNTANT MEMBE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was not able prove that the increase was for tin-purpose of business. 4. The appellant craves leave for reserving the right to amend, modify, alter, add or forego, any ground(s) of appeal at any time before or during the hearing of appeal. 2. Brief facts of the case are as under: The assessee filed its return of income on 15.11.2007 declaring a total income of rupees nail. However, it has been recorded in the assessment order that the return was not based on the audited profit and loss account because the accounts of the assessee were not audited before filing of return of income. Thereafter, books of accounts were finalized and audit report was prepared as on 30.05.2008. Subsequently the assessee filed revised retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auditors, expresses various irregularities in the books of accounts maintained by assessee. He submitted that turnover has decreased but carriage expenses has increased. Ld. DR further submitted that there was no details that were produced before internal auditors regarding commission and discount received from Tata Motors by assessee. Ld. DR submitted that assessing officer has rightly added difference in the commission and discount as compared to previous year to income of assessee. In respect of sundry creditors Ld. DR submitted that assessee has not been able to establish the credit entries in books of accounts and has not given any details regarding creditors. He submitted that assessing officer was right in not considering such advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. It is observed that assessing officer has made disallowance based on irregularities pointed out by internal auditors in audit report. On perusal of audit report it is observed that assessee has not substantiated any of its claim, expenses or commission received with proper bills, vouchers or any other such document. We shall reproduce here relevant observation by internal auditors, pertaining to issues raised by revenue before us, more particularly placed at pages 72 to 83 of the paper book: 4.10 No reconciliation/analysis/confirmation of balances in various accounts with Tata Motors showing a net debit balance of ₹ 73.32 lacs were made available to us. We have been provided with letter dated December, 2007 from Tata Mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laging leading to falsification by accounting for payments to temporary workers and booking the expenses under other heads of accounts. 11. It has been argued by Ld.AR that once books of accounts are rejected and gross profit has been calculated, no separate addition should be made. He placed is reliance upon decision of Hon ble Andhra Pradesh High Court in the case of Madi Sundaram Mills Co Ltd vs. CIT reported in 32 ITR 369. He submitted that once the gross profit has been estimated by assessing officer based on total turnover, then assessing officer cannot rely upon rejected books of accounts in terms of cash credits for making further addition. We agree with contention of Ld. AR that by making addition in respect of cash credits, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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