TaxTMI 
TaxTMI 
2010 (1) TMI 898
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....ned Commissioner of Income-tax (Appeals) has erred in confirming the addition to the extent of Rs.3,91,600 to the total income of the appellant. Revenue's grounds of appeal:- 1(1) On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in directing to adopt the gross profit at 10.19% as against 13.88% adopted by the Assessing Officer without appreciating the fact that he has upheld the finding of the Assessing Officer about the defects in the books of accounts maintained by the assessee. 3. Facts of the case, in brief, are that the assessee is the proprietor of M/s. Dhamu Furnitures which acts as a furniture contractor. During the course of assessment proceedings the Assessing Officer on the basis of information collected through issuing notice u/s. 133(6) of the Income-tax Act, 1961 (the Act) and examination of books of account of the assessee found the following discrepancies:- (a) The assessee claimed purchases vide bill No. 8957 dated 17th May, 2003 from M/s. Arsiwala and Co. for Rs.15,921 which has been wrongly entered in the purchase register as Rs.1,59,212. (b) Entries dated 8.11.2003, 17.11.2003 and 8.12.2003 have been made ....
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....ee and in absence of any satisfactory explanation given by the assessee, the Assessing Officer rejected the book results. Considering the GP rate of 25.09% for the A.Y. 2001-02, 22.77% for the A.Y. 2002-03, 10.19% for the A.Y. 2003-04 and 8.69% shown by the assessee for the A.Y. 2004-05, the Assessing Officer held that estimation of GP rate at 13.88% being the average GP for A.Ys. 2002-03 to 2004-05 on a turnover of Rs.2,61,84,541 will be reasonable. He accordingly made an addition of Rs.13,57,810 to the total income of the assessee being the difference in gross profit. 5. Before the CIT(A), it was submitted that all the doubts raised by the Assessing Officer have been reconciled and the genuineness of books of account was established before him. It was submitted that proper opportunity was not provided by the Assessing Officer before rejecting the books of account and estimating the GP rate. As regards the estimation of GP margin at 13.88% it was submitted that the turnover for the impugned assessment year is more whereas the turnover for the earlier years is less. It was further submitted that when the turnover is more the GP rate is less. Therefore, the Assessing Officer is n....
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....results cannot be disturbed. 9. The learned DR, on the other hand, supported the order of the Assessing Officer. She submitted that it is an admitted fact that the assessee could not reconcile the various discrepancies pointed out by the Assessing Officer. The invoice from Arsiwala and Co. for Rs.15,921 has been wrongly entered in the purchase register as Rs.1,59,212. Similarly the purchases form Rashmi Plywood, bills and vouchers of which are placed at Paper Book page 14, are on the basis of proforma invoice on which sales tax has been charged. Therefore, how it is not entered in the books of the assessee remains unexplained. Despite opportunities given by the Assessing Officer the assessee failed to reconcile the various discrepancies. As regards the contention of the learned counsel for the assessee that more is the turnover less is the GP ratio, she submitted that this is always not correct since the assessee himself has disclosed GP ratio of 9.7% on the turnover of Rs.2.6 crores for the A.Y. 2005-06. Therefore, the CIT(A) was not justified in reducing the GP rate to 10.19% as against 13.88% determined by the Assessing Officer. 10. We have considered the rival submissions....
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....ld who are financially dependent on him and he sends Rs.5,000 per month for their livelihood. Similarly he also sends Rs.1500 to Rs.2000 to his parents at Bikaner. Similarly in reply to question No. 5 he stated that he incurs expenditure of Rs.4000 per month for his mobile expenses and Rs.4000 per month for rent of his residence and incurs an expenditure of Rs.2000 to 3000 for his personal expenses. The Assessing Officer further noted that the assessee in his reply to question No. 6 could not explain properly as to how he had given a gift of Rs. 1 lakh when he is not left with enough money. Similarly the donor also could not explain as to why there are immediate withdrawals after the payments were credited to his account apart from telling that these are for payments to labourers. Not being satisfied with the various explanations given by the donor the Assessing Officer held that the receipt of gift of Rs. 1 lakh is a mere farce. He accordingly made addition of Rs.1 lakh u/s. 68 of the Act. 13. Before the CIT(A), it was submitted that the donor was assessed to income-tax and was having sufficient balance in his account for giving the gift. It was submitted that the identity, gen....
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....irmity in the order of the CIT(A) in confirming the addition of Rs.1,00,000 made by the Assessing Officer u/s. 68 of the I.T. Act and the same is accordingly upheld. This ground by the assessee is, therefore, dismissed. 15. Grounds of appeal No. 3 by the assessee reads as under:- The learned Commissioner of Income-tax (Appeals) has further erred in treating the interest u/s. 234C as consequential, whereas in our ground of appeal, we had challenged the calculation of interest u/s. 234C based on assessed income at Rs.30,562 as against liability of interest u/s. 234C as Rs. NIL based on returned income. 16. After hearing both the sides, we find the Assessing Officer has charged interest of Rs.30,560/- u/s. 234C of the I.T. Act in the I.T. computation form. We find the CIT(A) dismissed the ground raised by the assessee on this issue holding the same to be consequential. We find the Assessing Officer in the income-tax computation form has given a credit of Rs.2,93,995 as credit for TDS on the assessed income of Rs.34,80,610. As per the provisions of section 234C interest has to be calculated on account of deferment of advance tax due on the returned income. However, we find the....