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TMI Blog2021 (12) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present case, since the authorities below have not rejected the books of account of the assessee, the action of sustaining trading addition is contrary to the ratio laid down by the Hon'ble High Court in the case discussed above. Hence, we allow this ground of appeal and direct the AO to delete the addition Disallowance of interest on the opening debit balance - counsel submitted that the closing balance of capital as on 31.03.2011 is the opening balance of assessment year 2012-13, therefore, no addition is warranted on the said amount - HELD THAT:- CIT(A) has deleted the identical addition in assessee s appeal against the assessment order for the assessment year 2011-12 following the decision of the Amritsar Bench of the Tribunal in the case of ITO vs. Euro Infrastructure Power Ltd. [ 2015 (6) TMI 766 - ITAT AMRITSAR ] The department has not challenged the findings of the Ld. CIT(A). Since, the authorities below have not assigned any cogent reason for making addition in the assessment year under consideration, we find merit in the contention of the Ld. counsel for the assessee. Hence, we allow this ground of appeal. Addition of interest disallowance on adva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee has filed the captioned appeals against the two orders each dated 12.2.2019 passed by Commissioner of Income Tax (Appeals), Palampur [for short CIT(A) ] for the assessment years 201213 2013-14 respectively, whereby the Ld. CIT(A) has dismissed the appeals filed by the assessee against the assessment orders passed u/s 143(3) of the Income Tax Act, 1961 [for short the Act ]. 2. Since, both the appeals pertain to the same assessee for different assessment years, these were clubbed, heard together and are being disposed of by this common order for the sake of convenience. ITA No. 650/Chd/2019 AY 2012-13 3. Brief facts of the case are that the assessee an authorized dealer of two wheelers, filed his return of income for the assessment year under consideration declaring total income of ₹ 13,72,845/-. Since the case was selected for scrutiny, AO passed assessment order u/s 143(3) of Act and determined the total income of the assessee at ₹ 22,27,598/- after making addition of ₹ 3,30,305/- on account of low GP rate, ₹ 2,36,452/- on account of disallowance of interest, ₹ 2,46,150/- on account of interest on capital contribution and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 6,62,907/- may please be deleted. 5. Ground No. 1 and 7 of the appeal are of general nature hence do not require specific adjudication. 6. Vide ground No 2 the assessee has challenged the action of the Ld. CIT(A) in sustaining addition of ₹ 1,50,000/- out of total addition of ₹ 3,30305/- made by the AO on account of low GP on estimation basis. The Ld. counsel submitted before us that the assessee has submitted the complete quantitative tally of two wheelers which is available on record. comparative chart placed on record shows that the assessee s gross profit is progressive. The assessee s sales and purchases are completely vouched and the entire payments to Hero Honda and suppliers were made through banking channel. The Ld. counsel further pointed out that in the past much lower gross profits have been accepted in scrutiny assessment. The Ld. counsel further contended that since AO had made addition on estimation basis without pointing out any defect in the books of account of the assessee, The Ld. CIT(A) ought to have deleted the entire addition made by the AO. The Ld. counsel placing reliance on the judgment of the Hon'ble Rajasthan High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enged the action of the Ld. CIT(A) in sustaining addition of ₹ 2,36,452/- made by the AO on account of disallowance of interest on the opening debit balance of ₹ 19,70,432.16/- The Ld. counsel submitted that the closing balance of capital as on 31.03.2011 is the opening balance of assessment year 2012-13, therefore, no addition is warranted on the said amount. The Ld. counsel further pointed out that in the assessment year 2011-12, Ld. CIT(A) deleted the addition made by AO on the basis of debit balance in assessee s own case. It was further pointed out that in the assessment year 2017-18 assessment order was passed u/s 143(3) of the Act and no such addition was made. The Ld. counsel relied on following cases to substantiate his contention. 1. CIT vs.DD Industries ltd. 231 Taxman 0784 (Delhi), 2. ITO vs. Usha Commercial Pvt. Ltd. ITA No 1469/Kol/2008 AY 2005-06 ITAT Kolkata, 2. ITO vs. Usha Commercial Pvt. Ltd. ITA No 1469/Kol/2008 AY 2005-06 ITAT Kolkata and 3.ITO Bhatinda vs. Euro Infrastructure Power Limited ITA No 457/Asr/2013 (Amritsar). 10. On the other hand, the Ld. DR supporting the order of the Ld. CIT(A) submitted that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain the addition on account of interest disallowance. We accordingly, allow this ground of appeal and set aside the findings of the Ld. CIT(A). ITA No.651/Chd/2019 AY 2013-14 13. In the assessment year under consideration, AO determined the total income of the assessee at ₹ 43,58,160/- as against the returned income of ₹ 22,06,890/- after making addition of ₹ 1,12,434/- on account of bogus entries, ₹ 1,02,811/-on account of unaccounted sale, ₹ 17,91,520/-on account of disallowance of interest on opening debit balance of prop. capital account and disallowance of ₹ 10,96,758/- on account of interest free advances to M/s Orchid Resorts and of ₹ 1,44,507/-on account of miscellaneous expenditure disallowance. The assessee challenged addition of ₹ 6,94,761/- made by the AO on account of disallowance of interest on debit opening balance of proprietor s capital, addition of ₹ 10,96,758/- on account of disallowance of interest on advances given to M/s Orchid Resorts and addition of ₹ 1,44,507/- made on account of disallowance of staff welfare expenses, telephone expenses, car and travelling expenses, miscellaneous e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this appeal is identical to ground No.3 of the assessee s appeal for the assessment year 2012-13 already discussed and decided. Since we have allowed the identical ground in assessee s appeal aforesaid, consistent with our findings we allow this ground of appeal of the assessee for the same reasons and delete the addition. 17. Ground No 3,4 5 are identical to the ground No 4,5 6 of the assessee s appeal for assessment year 2012-13 decided above. Since we have decided this issue in favour of the assessee in assessee s appeal aforesaid, we allow these grounds of appeal of the assessee for the same reasons and direct the AO to delete the addition. 18. Vide ground No 6 the assessee has challenged the action of the Ld. CIT(A) in sustaining disallowance of 10% amounting to ₹ 72,253 out of the total addition of ₹ 1,44,507/- made by the AO on account of disallowance of miscellaneous expenses claimed by the assessee. The Ld. counsel submitted that the expenses were relating to staff welfare expenses, telephone expenses car expenses depreciation mise. Expenses car and travelling expenses repair and maintenance expenses amounting to ₹ 7,22,540/- The Ld. counse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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