TaxTMI 
TaxTMI 
2014 (11) TMI 140
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....f Rs. 17,06,797/-, Rs. 56,919/- and Rs. 31,296/- and the gross profit estimated thereon of Rs. 1,00,000/-, Rs. 3,000/- and Rs. 3,000/- respectively made by the A.O. U/s.14A of the Act. 2. The CIT(A) has erred in law and on facts in allowing the income from insurance commission and power generation for calculating deduction u/s.80IA of the Act, which do not form part of income derived from manufacturing activities. 3. The CIT(A) has erred in law and on facts in reducing the amount of deduction U/s.80IA/80IB of the Act, before calculating the deduction allowable u/s.80HHC of the Act. 4. On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the A.O. 5. It is, therefore, prayed that the order of the CIT(A) be set aside and that of the A.O. be restored to the above extent. 2.1. Briefly stated facts are that a notice u/s.153A of the Income Tax Act,1961 (hereinafter referred to as "the Act") was issued to the assessee. In response to the notice, assessee filed its return of income for the year declaring the income at Rs. 62,46,170/-. The AO framed the assessment u/s.153A rws 143(3) of the Act, thereby the AO made addition of Rs. 17....
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....terial, such type of shortages are bound to incur. Even in case of appellant, total shortages found for wash cotton during the year is 44119 kgs which is just 0.18% of total purchases of wash cotton and same is very negligible. Considering the same, the addition made by AO treating the alleged difference in quantity as per stock movement register and books of account as inflated purchases for Rs. 17,06,797 is deleted and consequential addition of gross profit of Rs. 1,00,000 is also deleted. The ground of assessee is allowed." 5.1. The above finding of the ld.CIT(A) has not been controverted by the Revenue. Therefore, we do not find any reason to interefere with the order of the ld.CIT(A), same is hereby upheld. Thus, this ground of Revenue's appeal is rejected. 6. Ground Nos.2 & 3 of Revenue's appeal are inter-related and, therefore, the same are decided together. The ld.CIT-DR supported the order of the AO, whereas the ld.counsel for the assessee supported the order of the ld.CIT(A). The ld.counsel for the assessee submitted that these grounds are squarely covered by the decision of the Coordinate Bench (ITAT Ahmedabad 'A' Bench) rendered in assessee's own case for AYs 2001-02 ....
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....the Tribunal in ITA Nos.2502 & 2503/Ahd/2007(supra) in favour of the assessee. He has drawn our attention towards the Tribunal's order dated 12/09/2014(supra), wherein the Tribunal after considering the submissions of the assessee had come to the conclusion that the amount in respect of the Kasar/Vatav is directly related to the business activity of the assessee. Therefore, the claim of the assessee is squarely covered by the decision of the Coordinate Bench, dated 12/09/2014(supra). 11.2. On the contrary, ld.CIT-DR supported the orders of the authorities below. 12. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the Coordinate Bench of this Tribunal in ITA Nos.2502 & 2503/Ahd/2007(supra) had decided this issue in favour of the assessee. Therefore, taking a consistent view in this year also, this ground of assessee's cross-objection is allowed and the AO is directed to allow the claim of the assessee accordingly. 13. Ground No.3 of assessee's cross objection is general in nature require no independent adjudication. 14. Now, we take up the additional ground raised by the assessee in ....
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....s allowed for statistical purposes. As a result, CO filed by the assessee is partly allowed for statistical purposes. 16. Now we take up the Revenue's appeal in ITA No.2505/Ahd/2007 for AY 2004-05. The Revenue has raised the following grounds of appeal:- 1. The CIT(A) has erred in law and on facts in deleting the disallowance of Rs. 4,54,575/- made by the A.O. u/s.14A of the Act. 2. The CIT(A) has erred in law and on facts in deleting the addition of Rs. 10,37,291/- made by the A.O. on account of sale of oil tins out of books without considering the facts that the entries in this regard were made in the documents found and seized from the premises of the assessee. 3. The CIT(A) has erred in law and on facts in deleting the addition of Rs. 14,91,868/- made by the A.O. on account of inflated purchases and consequential estimation of gross profit of Rs. 1,00,000/- without considering the fact that the entries in this regard were made in the documents found and seized from the premises of the assessee. 4. On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the A.O. 5. It is, therefore, prayed that the order of the CIT(A) be se....
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....de the addition of Rs. 10,37,291/-. However, ld.CIT(A) after considering the facts, deleted the addition made by the AO. 17.1. The ldCIT-DR submitted that the AO has analyzed and has rightly came to the conclusion that there were discrepancies which were not reconciled by the assessee. Therefore, ld.CIT(A) was not justified in deleting the addition. 17.2. On the contrary, the ld.counsel for the assessee reiterated the submissions as were made before the lower authorities. 18. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the AO rejected the explanation of the assessee by observing as under:- "i) As regards to contention of the assessee that for the month of April & May purchase figure has inadvertently taken at 5088890 Kg and 508260 Kg. instead of actual figure of 1005480 Kg. and 19463553 Kg. respectively is concerned, same was verified with the seized data file and found correct. ii) As regards to contention of the assessee that monthwise quantity details is because of different accounting method of recording the stock book by the assessee is concerned, same is also found accept....
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.... difference during the year is only 0.08% of total purchases of tins made during the year. The Appellant company is selling such scrapped tins and sale value have already been offered to tax on year to year basis which proves the fact that in handling of material and in usage of such tins for packing, breakages/damages happen. Even during the course of search proceedings, authorized officer has not pointed out any discrepancy in physical stock and book stock of oil which proves that no tins have been utilized for making any unaccounted sale of finished goods. Considering such facts, addition made by assessing officer is deleted." 18.2. After considering the totality of the facts of the case and the submissions made by the parties, we are of the considered view that there is no infirmity in the order of the ld.CIT(A) as he has examined the practical aspect of the business of the assessee. Therefore, we do not find any reason to interfere with the order of the ld.CIT(A), same is hereby upheld. Thus, this ground of the Revenue's appeal is rejected. 19. Ground No.3 of Revenue's appeal is against the deletion of addition of Rs. 14,91,868/- on account of inflated purchases and consequen....
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....s inflated purchases for Rs. 13,91,547 is deleted and consequential addition of gross profit of Rs. 1,00,000 is also deleted. The ground of assessee is allowed." 20.1. The above finding of the ld.CIT(A) has not been controverted by the ld.CIT-DR by placing any material on record, therefore we do not find any infirmity in the order of the ld.CIT(A), same is hereby upheld. Thus, this ground of Revenue's appeal is rejected. 21. Ground Nos.4 & 5 are general in nature require no independent adjudication. 22. As a result, Revenue's appeal in ITA No.2505/Ahd/2007 for AY 2004-05 is dismissed. 23. Now, we take up the Assessee's Cross Objection No.190/Ahd/2009 for AY 2004-05 (in ITA No.2505/Ahd/2007 for AY 2004-05). The assessee has raised the following grounds in its crossobjection: 1. On the facts and in the circumstances of the case, the learned CIT(A) erred in confirming disallowance of foreign traveling expenditure of Rs. 2,00,000 made by the Assessing Officer. 2. On the facts and in the circumstances of the case, the learned CIT(A) erred in holding that for the purposes of clause (baa) of the Explanation to Section 80HHC of the Income-tax Act netting of interest is not to be done....
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....ure claimed in profit and loss account. Even before this Tribunal, the assessee has not placed any supporting evidence on record. Therefore, we do not see any infirmity in the order of the ld.CIT(A), same is hereby upheld. As a result, assessee's this cross-objection for AY 2004-05 is partly allowed for statistical purposes. 26. Now we take up the Revenue's appeal in ITA No.2506/Ahd/2007 for AY 2005-06. The Revenue has raised the following grounds of appeal:- 1. The CIT(A) has erred in law and on facts in deleting the disallowance of Rs. 1,37,906/- made by the AO u/s.14A of the Act. 2. The CIT(A) has erred in law and on facts in deleting the addition of Rs. 1,71,927/- made by the AO on account of sale of disallowance of travelling expenses. 3. The CIT(A) has erred in law and on facts in deleting the addition of Rs. 2,42,857/- made by the AO on the basis of the documents found and seized at the time of search. 4. On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the order of the A.O. 5. It is, therefore, prayed that the order of the CIT(A) be set aside and that of the A.O. be restored to the above extent. 26.1. Apropos to ground No.....
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....004. While confronting with the same Shri Chandubhai I.Patel, Managing Director of the assessee company has denied of having any knowledge about the transactions recorded in these two files. As the seized papers were found from the premises of the assessee company as per section 132(4A) of the Act, onus lies on the assessee to explain the details of transactions noted. In view of the above mentioned facts and circumstances the assessee was asked to explain the same vide notice u/s.142(1) dated 15.12.006. Contents of the notice are as under:- Please refer to item No.14 & 15 of Annexure-A found from the office premise of Vimal Oil & Foods Ltd. which contains details of purchase and sale of shares from 11.06.2002 to 18.08.2004 it is noticed from the seized paper that total sales of share is Rs. 78,32,108/- and corresponding purchases are Rs. 75,89,215/-. Thus, there is net profit of Rs. 2,42,857/-. As the seized papers as referred above are found from the business premise of the company you are required to explain and reconcile the same with supporting documentary evidences. You are also required to show cause that why the same should not be considered as unaccounted receipt of the co....
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....any material on record, therefore, we do not find any infirmity in the order of the ld.CIT(A), same is hereby upheld. Thus, this ground Revenue's appeal is rejected. 31. Ground Nos.4 & 5 are general in nature require no independent adjudication. 32. As a result, Revenue's appeal for AY 2005-06 is dismissed. 33. Lastly, we take up the Assessee's Cross Objection No.191/Ahd/2009 for AY 2005-06 (in ITA No.2506/Ahd/2007 for AY 2005-06). The assessee has raised the following effective ground in its cross-objection:- 1. On the facts and in the circumstances of the case, the learned CIT(A) erred in confirming disallowance to the extent of Rs. 3,61,959 from out of the total foreign travel expenditure of Rs. 5,33,886 disallowed by the Assessing Officer. 33.1. The ld.counsel for the assessee submitted that the ld.CIT(A) was not justified in confirming the disallowance to the extent of Rs. 3,61,559/- out of total foreign travel expenditure of Rs. 5,33,886/- disallowed by the AO. 33.2. On the contrary, the ld.CIT-DR supported the orders of the authorities below on this issue. 34. We have heard the rival submissions, perused the material available on record and gone through the orders of ....