2013 (6) TMI 154

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....nsactions (2) the appellant craves liberty to raise additional ground and to modify/amend the ground of appeal at the time of hearing." The assessee has filed the cross-objection taking following grounds : "(1) The impugned additions and disallowances made in the order under section 145(3) dated October 28, 2011 are bad in law and on the facts of the case for want of jurisdiction and various other reasons and hence, the same kindly be deleted. (2) Rs. 1,00,000 : The learned Commissioner of Income-tax (Appeals) erred in law as well as on the facts of the case in confirming the trading addition of up to Rs. 1,00,000 (out of Rs. 3,19,477 made by the Assessing Officer). The addition so made and partly confirmed by the learned Commis....

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....ee but applied higher gross profit rate and made total addition of Rs. 3,19,477 in respect of income from newspaper business. Besides above, the Assessing Officer also made trading addition of Rs.21,59,700 under section 40A(3) of the Act on the ground that the assessee made cash payments to the newspaper company. Being aggrieved, the assessee filed appeal before the first appellate authority. After considering the submissions of the assessee, the learned Commissioner of Income-tax (Appeals) upheld the order of the Assessing Officer in rejecting the books of account under section 145(3) of the Act but stated that considering overall facts, total addition sustained by him is Rs. 1 lakh as against Rs. 3,19,477 made by the Assessing Officer.....

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....tatives of the parties and the orders of the authorities below and the cases cited before us. At the outset we may state that the decision of the hon'ble Gujarat High Court in the case of CIT v. Hynoup Food and Oil Ind. P. Ltd. [2007] 290 ITR 702 (Guj) cited by the learned Departmental representative is neither relevant to the issue before us nor the facts of the case. There is no dispute to the fact that the Assessing Officer rejected the book results under section 145(3) of the Act. Now the question arises as to whether any addition, inter alia, under section 40A(3) can be made by making disallowance over and the above ad hoc addition made and/or when gross profit rate is applied after rejecting books results. The hon'ble jurisdictional H....