9911796707
TMI Blog2020 (12) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... d how the AO has conceded the issue in respect of Smt. Shashi Rustagi and Smt. Kamlesh Rustagi. Transactions in the name of the family members appear to be sham transaction and is a clear case of the income of the assessee being diverted in the name of the family members. No hesitation in sustaining the addition - Decided in favour of revenue. Addition being the difference in the value of closing stock of Bajra commodity - assessee has valued closing stock at the average rate of ₹ 750 p. quintals AO adopted the rate of ₹ 936 p. quintal thereby disturbing the method of valuation consistently followed by the assessee from past many years - HELD THAT:- AO should not have disturbed the method of valuation followed by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mediately assessment year 2008-09 the gross turnover of the assessee was ₹ 86.50 lacs which has jumped to 3.21 crores during the year under consideration this also justifies the slight fall in the GP rate. Therefore, do not find any merit in this addition and accordingly direct the AO to delete the addition. Addition on account of alleged interest charged on interest free advances to the family members - HELD THAT:- From the balance sheet as find that the capital account show the balance of ₹ 656350/- out of which the assessee has given interest free advances of ₹ 190400/-. It is true that the assessee has some unsecured loans on the liability side of his balance sheet, but find that no interest have been paid by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound and, therefore, the AO could not make any comment nor could verify the details. 6. Considering the concession given by the assessee before the AO, I do not find any reason to interfere with the findings of the CIT(A) this addition is accordingly sustained and ground No.2 is dismissed. 7. Ground No.3 relates to the addition of ₹ 3,52,834/- on account of diversion of income to the following persons :- 1. Smt. Shobha Rustagi ₹ 101509/- 2. Smt. Shashi Rustagi ₹ 1,15,503/- 3. Smt. Kamlesi Rustagi ₹ 135822/- 8. Briefly stated the facts of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant raise doubts on the genuineness of the transactions. 11. I further fail to understand how the AO has conceded the issue in respect of Smt. Shashi Rustagi and Smt. Kamlesh Rustagi. In my considered opinion the transactions in the name of the family members appear to be sham transaction and is a clear case of the income of the assessee being diverted in the name of the family members. Therefore, I do not have any hesitation in sustaining the addition of ₹ 352834/- 12. Ground No.3 is accordingly dismissed. 13. Ground No.4 relates to the addition of ₹ 58480/- being the difference in the value of closing stock of Bajra commodity. 14. Facts on record show that the assessee has valued closing stock at the average ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es below. I find that during the assessment proceedings the assessee did not produce complete record and even in the remand proceedings complete bills and vouchers were not produced. In my considered opinion looking to the nature of expenses, business of the assessee and the place of business, ad-hoc disallowances of 5% should meet the ends of justice, hence, I direct the AO to restrict the disallowance to 5% of the expenditure claimed by the assessee. 21. Ground No.5 is accordingly partly allowed. 22. Ground No.6 and 7 relates to estimation of gross profit. During the course of scrutiny assessment proceedings assessee was asked to furnish the comparative GP and NP rate of last three years alongwith current year. The assessee furnishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rged on interest free advances to the family members. 29. During the course of assessment proceedings the AO noticed that the assessee has advanced ₹ 150300/-to Pradeep Rustagi and ₹ 40,100/- to Neeru Rustagi who happened to be the family members. The AO further found that the assessee has paid interest on unsecured loans and, therefore, charged interest at the rate of 15% par annum on the aforementioned interest free advances and made the addition of ₹ 285600/-. 30. Assessee agitated the matter before the CIT(A) but without any success. 31. Before me the counsel for the assessee stated that the assessee was having sufficient interest free advances to the family members and, therefore, no adverse inference shou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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