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TMI Blog2013 (4) TMI 944X X X X Extracts X X X X X X X X Extracts X X X X ..... es and in law, the learned CIT (Appeals), Surat has erred in not granting the benefit of expenditure incurred by the Appellant for conducting the Business. Grounds of ITA No.2635/Ahd/2009 (Revenue s appeal) 1. On the facts and circumstances of the cases and in law, the Ld. CIT(A) has erred in deleting the addition of ₹ 3,52,44,338/- made by the U/s. 40A(3) of the Act without appreciating the fact that the assessee had effected cash payments in excess of ₹ 20,000/-, in contravention of the provisions of section 40A(3) of the Act and also failed to discharge the onus cast on him to prove that such transactions are less than ₹ 20,000/- each as claimed by him. 2. On the facts and circumstances of the cases and in law, the Ld. CIT(A) has erred in directing the A.O. to adopt income @ 0.25% of the turnover as net profit without appreciating the fact that estimation of profit was not an issue and that the A.O. made the disallowance for violation of the provisions of section 40A(3). 3. On the facts and circumstances of the cases and in law, the Ld. CIT(A) has erred in stating that it is an admitted fact by the AO and the assessee that the assessee has onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd also failed to discharge the onus cast on him to prove that such transactions are less than ₹ 20,000/- each as claimed by him. 2. On the facts and circumstances of the cases and in law, the Ld. CIT(A) has erred in directing the A.O. to adopt income @ 0.25% of the turnover as net profit without appreciating the fact that estimation of profit was not an issue and that the A.O. made the disallowance for violation of the provisions of section 40A(3). 3. On the facts and circumstances of the cases and in law, the Ld. CIT(A) has erred in stating that it is an admitted fact by the AO and the assessee that the assessee has only given accommodation entries to earn income @ 0.25%, when no such fact were admitted by the assessee either in the assessment proceedings or in the grounds of appeal filed before the Ld. CIT(A). 4. On the facts and circumstances of the cases and in law without prejudice to the above ground, the Ld. CIT(A) erred in accepting fresh evidence without giving any opportunity to the AO to examine the same, as provided in Rule 46A of the I.T. Rules, 1962. 5. On the facts and circumstances of the cases and in law, the Ld. CIT(A) has erred in deleting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) Out of office rent expenses asDiscussed in para-7 ₹ 91,000/- (5) Out of printing stationery expenses as discussed in para -7 ₹ 28,970/- (6) Out of salary expenses as discussed In para-7 ₹ 4,00,500/- Against scrutiny order u/s. 143(3) dated 29.06.2009 of the A.O., the appellant carried the matter before the CIT(A). Before him, the reopening u/s. 147 was challenged by the appellant. The ld. CIT(A) after considering the decision in case of Shivkala Co-op. Hsg. Soc. Ltd. vs. ITO (Delhi) SMC 391, had rejected the ground of appeal for challenging the reopening u/s. 147 and issued notice u/s. 148 and held that adequacy or sufficiency of reasons to believe cannot be called in question, the A.O. has bonafide reasons to believe that income chargeable to tax has escaped assessment and such belief is relevant material validity of initiation of proceedings u/s. 147 cannot be challenged. The ld. CIT(A) found the purchases and sales of the appellant is bogus and all transactions were sham. The appellant had given accommodation bills for rough and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was argued that the addition made on the basis of any other income which was not formed the subject matter of the notice is invalid. Thus, the order of the A.O. may be cancelled. At the outset, ld. CIT D.R. vehemently argued that reopening u/s. 147 is valid as no scrutiny assessment was made in this case. The notice was issued within four years from the end of the assessment year. The copy of reasons were supplied to the appellant. There was no objection filed by the appellant before the A.O. He made compliance of the notice issued by the A.O. regularly without objecting the reopening. He further relied upon the decision of Hon ble Gujarat High Court in case of Gala Gymkhana (P.) Ltd. v. ACIT, [2012] 211 Taxman 447/27 taxmann.com 294, wherein the taxability of a particular receipt on account of sale of membership of ₹ 5.56 lacs which had escaped assessment without there being any opinion expressed on it by the A.O. held valid reopening u/s.147. He further relied in case of ACIT vs. Rajesh Jhaveri Stock Brokers (P) Ltd., (2007) 291 ITR 500 (SC), wherein it was held that u/s. 147, as substituted w.e.f. 1st April, 1989, if the A.O., for whatever reason, has reason to believe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... soned order. Thus, we do not hesitate to confirm the order of the CIT(A) wherein all addition had been deleted by him. Thus, we confirm the order of the CIT(A) and dismiss the appeal of the Revenue. 7. Ground no.6 of the Revenue s appeal for A.Y. 06-07 is against deleting the addition of ₹ 3,89,356/- made u/s. 40(ia) of the IT Act. The A.O. observed that the appellant had debited ₹ 3,89,356/- as brokerage. Hence, it had shown liability in respect of TDS payable. As per A.O., the assessee was liable to deduct TDS u/s. 194H of the IT Act. The appellant had not furnished any proof of payment of TDS. Therefore, he disallowed ₹ 3,89,356/- u/s. 40(ia) of the IT Act. The ld. CIT(A) had allowed the appeal on the ground that when income of the assessee has been directed to compute @ 0.25% on total turnover of ₹ 1,08,76,86,861/-, which was worked out at ₹ 27,19,217/-. The ld. CIT(A) had allowed all the expenses claimed by the appellant by relying upon the decision in case of Bharat A Master vs. ITO in ITa No. 177/Ahd/2003 dated 29.02.2008 and Hon ble Supreme Court decision in case of Poona Electric vs. CIT 57 ITR 521(SC). After considering the orders of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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