TaxTMI 
TaxTMI 
TaxTMI 
2011 (7) TMI 536
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.... order." 4. Brief facts of the case are that the assessee-company in the relevant assessment year was engaged in manufacturing and distribution of processed food and beverage. It had filed its return of income declaring total income of Rs.1,05,69,200/-. The Assessing Officer noticed that G.P. rate in assessment year 2005-06 was 15.87% whereas it was 14.28% in assessment year 2006-07. The assessee explained that the fall in G.P. rate of 1.59% was due to massive increase in the price of Cooking Gas which was increased by 74.21% during the intervening period from 01.04.2004 to 31.03.2006. The Assessing Officer examined the assessee's accounts and found that assessee did not maintain any stock register for purchase. There was no record for the production and consumption either. The opening and closing stock was certified by the assessee. He further observed that assessee failed to produce relevant vouchers, bills/invoices in support of cash purchases of milk, one of the essential ingredients of the trade, amounting to Rs.45,95,508/- during the year. The assessee had only produced the details of journal entries in respect of cash purchases. As regards the sales, Assessing Office....
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....ting to goods manufactured/traded; (d) Licensed capacity/installed capacity of goods manufactured. Ld. Counsel relied on the decision in the case of ITO vs. TEXCO INDIA 1996-(055)-TTJ-TDEL, wherein under similar circumstances Tribunal had upheld the Ld. CIT(A)'s finding in deleting the addition. 7. We have considered the submissions of both the parties and have perused the records of the case. The assessee's books were rejected for the various reasons given by the Assessing Officer as noted earlier. The Ld. CIT(A) confirmed the findings of the Assessing Officer on this issue and the assessee is not aggrieved by the said findings. Now, the issue which remains for consideration is how to estimate the assessee's income. It is well settled law that the Assessing Officer is required to estimate the assessee's income on a reasonable basis having regard to all the details available with him. In this regard, we find that as far as the sales returned by the assessee is concerned, same could not be disturbed in the absence of any evidence to show that there was some sales outside the books of account. The assessee had maintained its sales on computer and, therefore, m....
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....ducts. The proposed name of the subsidiary company is "Haldiram clay oven U.K. Ltd." During the period 06.04.2003 to 19.04.2003 the Directors had visited the U.K. for negotiating an office/Showroom for the above business. A letter dated 23.05.2003 sent by Speed Post to the Hon'ble Indian High Commissioner in the above matter is enclosed herewith again for your perusal. The current visit is also in continuation and in the chase of the above purpose. Further we like to in form you that the expenses Rs.16,36,223/- made on account of the Foreign Travel has been covered by FBT and the due FBT has been paid by us" The Assessing Officer observed that assessee had only furnished photo-copy of the letter addressed to Hon'ble Indian High Commissioner at London dated 23.05.2003, which was as old as more than two years. However, assessee could not furnish any evidence to demonstrate that new avenue for the activity of the company was explored neither for the year of travel nor for the subsequent year. He, therefore, held that assessee failed to substantiate the nexus of the foreign travel expenses vis-a-vis the business expenditure of the company. He, therefore, disallowed Rs.1....
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....mittedly, assessee had shown export turn over of Rs.1.00 crores to UK. Therefore, assessee's claim regarding visit of Director to UK for business purposes can not be doubted. The assessee had produced all the relevant correspondence in this regard which has been taken note of by Ld. CIT(A) and not rebutted by Department. We, therefore, confirm the action of Ld. CIT(A). This ground of Department is dismissed. 11. Ground No.3 reads as under:- "That in the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the disallowance of commission of Rs.3,93,3631- u/s. 40A(2)(a) of the Act by holding that the commission paid was not excessive, was allowed in the past, and reflected in the return of income of the recipient, without appreciating the fact that the assessee had failed to produce any evidence for the services rendered for which the commission was paid and the claim of the assessee was inadmissible for this reason." 12. The Assessing Officer noticed that assessee had debited commission of Rs.9,11,432/- in the profit and loss account during the year which included payment of commission of Rs.3,93,363/- to Smt. Kamala Devi Agarwa....