TaxTMI 
TaxTMI 
TaxTMI 
2014 (6) TMI 35
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....so vacated the business premises, and in that process the impugned order of the CIT(A) has not been served on the assessee in time. In support of his contentions as to discontinuance of the business, assessee also furnished a letter written for the cancellation of the VAT registration. On careful consideration of the matter, we find that there is a reasonable cause for the delayed filing of these appeals by the assessee. We accordingly condone the delay and proceed to dispose of these appeals on merits. 3. Factual background leading to the filing of the present appeals by the assessee before us is that the assessee company is a dealer in Maruti Udyog Ltd. (MUL) during the assessment years under consideration and dealt in purchase and sale of Maruti Cars. Subsequent to assessment orders under S.143(3) passed on 29.11.2002, information was received from the Sales Tax Authorities that the assessee company had not accounted for purchases correctly and had also not reported the actual sales turnover. Information was verified by the Assessing Officer by writing to the Maruti Udyog Ltd. and the relevant Commercial Tax authorities. It was found that there was indeed variation between the ....
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....the assessee was to report a higher cost of cars and repairs as compared to the actual cost to him. This is because of the fact that he has not varied the number of cars purchased from MUL. He noted that the Assessing Officer has not reported any difference in the number of cars as per the dispatch statements. During the assessment and remand proceedings, the Assessing Officer could not find any evidence to indicate that the amounts reflected in the books of the assessee were different from those appearing in the bills issued by MUL. He however, noted that the assessee has also not been able to fully account for the difference in these figures. The CIT(A) further noted that the assessee has been able to show that there was variation in the periods in which some sales were accounted for by the MUL vis-à-vis the corresponding purchases appearing in the books of the assessee. Considering these aspects, the CIT(A) noted that the assessee has not been able to reconcile all the discrepancies with the books, and there continue to be glaring differences in purchases and other figures when compared to the data obtained from MUL. He further observed that it is a fact to be noted that ....
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....ccordingly, the Assessing Officer is directed to recompute the profits of each year by adding 1% gross profit in each assessment year over and above the declared G.P., calculated as 1% of the sales declared by the Appellant without the component of Sales Tax added to the turnover. For example, for the assessment year 2005-06 the sale declared by the Appellant as per his return of income are Rs.17,04,57,881/-. The Assessing Officer will add Rs.17,04,578/- to the income of the Appellant for the assessment year 2005-06 and so on." 6. As for the additions under S.43B and S.40A(3) of the Act, the CIT(A) noted that the Assessing Officer has looked into these issues and given the following figures in the remand report dated 9.7.2008- A.Y. Amounts to be disallowed and added back to the income declared as per provisions u/s. 43B of the I.T. Act RS. Short deduction as per assessee's own computation vide his letter dt.21.4.2008 Rs. 2001-02 4,04,682 - 2002-03 18,11,621 13,14,291 2003-04 8,41,371 7,90,222 2004-05 - 1,34,506 2005-06 4,66,489 6,27,625 ......" Observing that the assessee, during the appellate proceedings, could not explain the discrepancies, ....
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.... ranged from 3.45 in assessment year 2001-02 and 2002-03 to 10.02 in assessment year 2004-05. That being so, making additions to the G.P. of all the years on a uniform basis, irrespective of the reasonable G.P. disclosed by the assessee is not fair and justified. As for the additions under S.403B and 40A(3), he submitted that once the income from business of an assessee is estimated, there is no scope for any other additions under the same head, viz. 'business'. In support of this contention, he placed reliance on the decision of the jurisdictional High Court in the case of Indwell Constructions (232 ITR 776). 10. On the other hand, the Learned Departmental Representative strongly supported the order of the CIT(A), and submitted that the assessee has failed to produce the books of account or the vouchers either before the Assessing Officer or before the CIT(A). Assessee could not even reconcile the differences pointed out and clearly submitted that it is not in a position to explain each and every entry in the books of account, since the Managing Director has expired and the old accountant who kept all the accounts was also not there. He further submitted that the CIT(A) h....