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TMI Blog2020 (6) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... of 0.80% for making the addition. Thus, the crux of the matter had been that the A.O. accepted the sales and purchases disclosed by the assessee in the Trading A/c. A.O. has also accepted profit declared by the assessee. A.O. with regard to the unexplained purchases applied the G.P. rate for the purpose of making the addition, but, with regard to sales without comparing with the bank statement made the addition of the entire amount in question. Thus, there is a difference in the opinion of the A.O. with regard to the same matter in issue as regards sales and purchases. CIT(A) on examination of the record, accepted the explanation of assessee that purchases and sales made by assessee of other connected parties since routed through the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, no interference is called for in the matter. Accordingly, Ground No.2 of the appeal of the Revenue is dismissed. Ad-hoc disallowance of expenses - assessee has claimed shop expenses, labour charges, printing and stationary, and travelling expenses - assessee did not produce complete vouchers - HELD THAT:- A.O. has not pointed out as to which of the vouchers of the expenditure have not been produced by the assessee. No details of the amount has also been mentioned. Therefore, disallowing 1/5th of the expenditure claimed of the assessee would amounts to adhoc addition which cannot be sustained in law. - ITA.No.4534/Del./2016 - - - Dated:- 16-6-2020 - Shri Bhavnesh Saini, Judicial Member And Shri Anil Chaturvedi, Accountant M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. had issued a letter dated 05.02.2016. As per the said letter, out of total purchase of ₹ 5,42,47,469/-, only a sum of ₹ 30 lakhs were paid through the bank account of the individual. It goes to prove that purchases made on behalf of individual were also routed through the bank account of the assessee HUF. The Ld. CIT(A) further relied upon Judgment of the Hon ble High Court of Madhya Pradesh in the case of CIT vs., Bal Chand Ajit Kumar 263 ITR 610 (M.P.) in which it was held that Unrecorded sales found at the time of survey, net profit rate has to be applied. It is further noted in the impugned order that in the case of the assessee there is no difference in purchase and sales and the alleged difference in bank deposits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Counsel for the Assessee also referred to observations of the A.O. on Ground No.2 with regard to suppression of the purchases and submitted that since the A.O. himself has accepted the difference in the sales and purchases, therefore, there is no question of adding the entire amount of the sales and as such the application of net profit rate was sufficient and as such no further interference is required in the matter. 7. We have considered the rival submissions. The A.O. noted details of the sales and purchases as per the audit report in the assessment order. The details of the sales are as per the Trading A/c of the assessee. The A.O. found some excess deposit of the impugned amount in the account of the assessee. The assessee explai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies since routed through the bank account of the assessee, therefore, could not be treated as sales and purchases of the assessee. In such circumstances, even if there was some excess sales declared by the assessee, the entire sales could not have been treated as unaccounted income of the assessee. As against the undisclosed or unaccounted sales, only profit rate should have been applied to make the addition. We are fortified in our view by Judgment of Hon ble Gujarat High Court in the case of CIT vs., President Industries 258 ITR 654 (Guj.) and Judgment of the Hon ble Madhya Pradesh High Court in the case of CIT vs., Bal Chand Ajit Kumar 263 ITR 610 (M.P.). Further no material is produced before us to rebut the finding of fact recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we are of the view that no interference is called for in the matter. Since the purchases recorded in the books of account have not been disputed by the A.O, therefore, there is no question of making such addition against the assessee. The explanation of assessee that other purchases were also routed through the account of the assessee, have not been disputed by the Revenue. Therefore, no interference is called for in the matter. Accordingly, Ground No.2 of the appeal of the Revenue is dismissed. 13. Ground No.3 of the Revenue is as under : 3. CIT(A) has erred in deleting addition of ₹ 55,500/- made on account of ad-hoc disallowance on the ground that the disallowance has been made without any finding of concealment is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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