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TMI Blog2025 (2) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... does not need any interference. X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 24,33,094/- is bad in law and therefore, the same may please be deleted. 2. That the Ld. Commissioner of Income Tax (Appeals) has erred in law and facts of the case while sustaining part of disallowance made by the Ld. AO on ad-hoc basis to the extent of 20% of the expenses incurred by the assessee without any cogent reason as compared to 50% of expenses disallowed by the Ld. AO. As such, the addition of Rs. 57,970/- is bad in law and therefore, the same may please be deleted. 3. That the Ld. Commissioner of Income Tax (Appeals) has erred in law and facts of the case while sustaining the addition of Rs. 1,85,599/- made to the income of assessee by the Ld. AO on account of addition in Capital Account without appreciating that the subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed addition to Capital account. - Rs. 1,85,599/- - Addition on account of explained credits in PNB Account - Rs. 6,02,2350/- 5. Upon assessee's appeal, Ld. CIT(A) elaborately considered the issues. Ld. CIT(A) held that since books have been rejected, hence, estimating the 1% GP instead of 1.5% estimated by the AO would serve the end of justice. He held that other additions were made on adhoc basis because the books have already been rejected ultimately, Ld. CIT(A) restricted the addition to 1% of the GP by holding as under:- "8. I have gone through the submissions and the order. It is a fact that the Assessing Officer has rejected accounts and estimated the GP in respect of turnover shown by the appellant. Once the books of accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer himself accepted that the purchases have been made from M/s. India Technometal Co. Ltd. and thereafter he states it to be unverifiable. I fail to understand what justice is he making with the revenue or the appellant by disallowing 10% of the outstanding credits. If we accept that the purchases have been made then why he is making disallowance of 10% in respect of credit balance of M/s. India Technometal Co. Ltd. In view of the facts that books of accounts have already been rejected the adhoc addition made is deleted. 9. As far as the addition in respect of the sales is concerned the appellant has explained that the difference in the sundry creditors and purchase and sales shown was on account of the VAT but he was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the fact that books of accounts and the vouchers have not been produced the disallowance is restricted to 20% of these expenses. 11. Next Ground is in respect of addition to capital account. The Assessing Officer observed that appellant had made an addition of Rs. 1,85,599/- in his capital account. It was explained that the same was made out of withdrawal from the personal account of the appellant. However, appellant was not able to substantiate the same. Even during the course of appeal, the appellant has not been able to illustrate as to how money was withdrawal from his personal account and deposited in his firm. The addition is therefore sustained. 12. The Assessing Officer observed there were deposits in the Punjab National Bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is a fact that the AO has rejected accounts and estimated the GP in respect of turnover shown by the assessee, hence, Ld. CIT(A) has taken a correct view that once the books of accounts are rejected, it does not warrant any adhoc addition. Accordingly, he rightly restricted the GP @ 1% instead of 1.5% estimated by the AO. During the hearing, both the parties fairly agreed that restricting the GP @1% by the Ld. CIT(A) serves the end of justice, which does not need any interference. Accordingly, we affirm the action of the Ld. CIT(A) and dismiss both the cross appeals filed by the Revenue as well as Assessee, for which both the Ld. Representatives has agreed. 8. In the result, both the cross appeals filed by the Revenue and Assessee stan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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