TaxTMI 
TaxTMI 
2014 (7) TMI 126
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....ar, he filed the return of income declaring total income of Rs. 7,58,300/-. During scrutiny assessment proceedings, the Assessing Officer after examining the trading and Profit & Loss a/c noticed that on a total turnover of Rs. 33,06,60,497/- the assessee had declared gross profit of Rs. 34,90,041/- which works out to 1.06%. Considering it to be on the low side, compared to the assessment years 2007-08 and 2008-09, the Assessing Officer that by applying the rate of 1.28% worked out gross profit to Rs. 41,99,381/- which resulted in a difference of Rs. 7,09,346/- which the Assessing Officer proposed to add. Likewise, the Assessing Officer in the said show cause notice proposed addition/disallowance on various other issues. Though the assessee submitted its explanation objecting to the proposed additions/disallowance, the Assessing Officer ultimately completed the assessment by determining the total income at Rs. 50,42,755/- on the following additions:- i) Addition towards low gross profit Rs. 7,09,346 ii) Addition towards un-vouched expenditure Rs. 4,05,755 iii) Addition towards 40A(3) payments Rs. 4,35,220 iv) Addition towards donation Rs. 1,25,000 v) Addition towards....
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....ut finding any defect or deficiency in the books of accounts or rejecting the books of accounts. On a perusal of the assessment order, we find that the Assessing Officer has not specifically rejected the books of accounts or made any adverse comments with regard to the same. However, there is a finding by the Assessing Officer that the vouchers produced by the assessee in support of the expenditure claimed are mostly self made vouchers. The CIT (A) has restricted the disallowance to 10 lakh by observing that the Assessing Officer has rejected the books of accounts and the expenditure claimed by the assessee are not supported by bills and vouchers. However, considering the claim of the assessee that all the expenditures are supported by genuine bills and vouchers and books of accounts have been correctly maintained which can be proved by the assessee, we are inclined to remit the matter to the file of the Assessing Officer for verifying it again. If the assessee is unable to prove the expenditure claimed and the profit declared with proper evidence, the Assessing Officer is free to draw his own conclusion on the basis of materials available on record. However, the assessee must be g....
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....rchased from unregistered dealers who insist on payment of cash and do not accept cheque. It was further submitted that as such payments have to be made after the banking hours, therefore, payments were made in cash. The learned AR further submitted that even otherwise also except three instances, all other payments made in cash are below Rs. 20,000/-. The Assessing Officer by clubbing payments made on two successive days has arrived at the figure of Rs. 4,35,220/- made in cash. In support of such contention, the learned AR referred to the ledger extract of fuel expenses as appearing in the books of the assessee and a copy of which is placed at pages-36 to 38 of the paper book. 12. The learned DR, on the other hand, while supporting the orders of the revenue authorities however submitted that the assessee's claim can be verified by the Assessing Officer. 13. We have heard the submission of the parties , perused the orders of the revenue authorities as well as other material on record. It is the claim of the assessee that the CIT (A) has misconceived the facts by concluding that the assessee has made payments to petrol pump towards purchase of petrol, whereas the assessee has ....
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....h was made by two persons, the assessee would be eligible for claiming deduction u/s 80G of an amount of 50% of Rs. 50,000 i.e., Rs. 25,000/-. Since the assessee has not added back the amount of Rs. 1 lakh debited to Profit & Loss a/c in the computation of income and straightaway claimed 50% thereof towards deduction from the total income he added back an amount of Rs. 1,25,000/- to the returned income of the assessee. The assessee challenged he addition in appeal before the CIT (A) . 16. Before the CIT (A) it was contended by the assessee that the amount of Rs. 1 lakh debited to the Profit & Loss a/c was actually paid by the assessee though the receipt was in the name of two persons. The CIT (A) after considering the submission of the assessee directed the Assessing Officer to verify the receipt and allow the claim if the receipt is found to be genuine and the trust to which donation was given is found to be registered u/s 80G of the Act. 17. Learned AR submitted that, though the receipt towards donation of Rs. 1 lakh was in the name of the assessee as well as other person Namely G.K. Kedia but the assessee has actually paid the amount of Rs. 1 lakh by himself which can be v....