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TMI Blog2017 (9) TMI 1351X X X X Extracts X X X X X X X X Extracts X X X X ..... 2/- being the liquidated damages deducted during the year, the biggest deduction of liquidated damages during the relevant year is ₹ 3,70,501/- which was done by Himachal Pradesh State Electricity Board. Taking into consideration all these facts, the Ld. CIT(A) has given relief to the assessee which order we find to be just and reasonable and, therefore, we do not find any reason to interfere with the same. Therefore, we confirm the order of the Ld. CIT(A) and dismiss this ground of appeal of revenue. Addition on suppressed sales - AO has not specifically rejected the books - Held that:- It is well settled that even if it is proved that the suppression of sales has taken place, then also the entire suppressed sales cannot be taxed and only the profit component can be taxed. In any event without finding defects in the books of account maintained by the assessee and without rejecting the books, which is audited, the AO erred in making estimation without giving any credence to the assessee’s explanation why the profit margin decreased, so the action of the Ld. CIT (A) is upheld. Therefore, we do not find any infirmity in the action of the ld. CIT(A) in deleting the addition a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue is against the action of the Ld. CIT(A) to allow the claim of the liquidated damages to the tune of ₹ 5,48,012/-. Brief facts of the issue are that the assessee had claimed deduction of the liquidated damages of ₹ 5,48,012/- which was debited in the P L Account which were claimed by the assessee to have been imposed and deducted from the value of goods by the purchasers for delayed delivery of goods to them. The AO observed that despite the assessee being asked to produce documentary evidence in support of the claim, the assessee could only produce some correspondence with the Himachal Pradesh State Electricity Board wherein the assessee pleads to waive off liquidated damages, which according to AO, does not support the claim of the assessee. The AO, therefore, disallowed the claim of the assessee. Aggrieved, the assessee preferred appeal before the Ld. CIT(A), who was pleased to allow the deduction. Aggrieved, revenue is before us. 4. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the assessee is a manufacturer of underground cable and its major customers are State Electricity Boards, large private sector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les ). At the outset itself, the Ld. DR drew our attention to the deletion of ₹ 18,017/- and ₹ 6,26,631/- as ordered by the ld. CIT(A), we find that the deletion has been ordered on the basis of evidence produced for the first time before the Ld. CIT(A) that has been referred to by the Ld. CIT(A) without calling for the remand report as required by Rule 46A of the Rules. Since there is a violation of Rule 46A of the Rules, we are inclined to remit the matter back to the file of the AO to adjudicate the same afresh on this issue after affording reasonable opportunity of being heard to the assessee. Therefore, this ground of appeal of revenue is allowed for statistical purposes. 6. The next issue is regarding relief granted by the Ld. CIT(A) on account of suppressed sales amounting to ₹ 1,03,17,909/- on reason that the AO has not specifically rejected the books. Brief facts of the case are that the AO noted that the material consumed during the year has increased by ₹ 60 lacs and the stock value has been enhanced by ₹ 37 lacs when compared with the previous year. The AO also took note of the sale figures included scrap sales which has increased by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dhary, AY 2007-08 dated 15.09.2011, it was observed that it is well settled that even if it is proved that the suppression of sales has taken place, then also the entire suppressed sales cannot be taxed and only the profit component can be taxed. In any event without finding defects in the books of account maintained by the assessee and without rejecting the books, which is audited, the AO erred in making estimation without giving any credence to the assessee s explanation why the profit margin decreased, so the action of the Ld. CIT (A) is upheld. Therefore, we do not find any infirmity in the action of the ld. CIT(A) in deleting the addition and we uphold the same. This ground of appeal of revenue is dismissed. 8. Now coming to the Cross Objection preferred by the assessee. We note that ground Nos. 1, 4, 5 and 6 stands dismissed as not pressed. The only ground Nos. 2 and 3 remain to be adjudicated with. The ground no. 2 is against the action of the ld. CIT(A) in confirming the addition of ₹ 45,21,363/- made by the AO on account of bill discounting charges. The facts of the case are that the assessee claimed bill discounting charges to the tune of ₹ 45,21,363/-. Dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the additional evidence filed before us to substantiate the claim. In the interest of justice and fair play we set aside the order of Ld. CIT(A) and remand the matter along with the entire evidence to the AO to adjudicate this issue afresh. Needless to say sufficient opportunity may be granted to the assessee and assessee is directed to cooperate during the remand proceeding. With this observation, this issue is remanded back to the file of the AO for de novo adjudication. Therefore, this ground of assessee s CO is allowed for statistical purposes. 10. Ground no. 3 of assessee s CO is against the action of the Ld. CIT(A) in confirming the addition to the extent of ₹ 88,722/- being 10% of ₹ 8,87,244/- incurred on account of car hire charges, car maintenance and fuel expenses. The AO has noted that the assessee company debited ₹ 5,28,48,338/- under the head administrative and other expenses which included ₹ 23,64,688/- on account of travelling and conveyance expenses. The AO notes that on being asked to furnish evidence supporting the claim, the Ld. AR produced some bills/vouchers out of which a large part consists of self made bills/vouchers which accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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