TaxTMI 
TaxTMI 
2014 (11) TMI 173
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....e by the A.O. on account of unsecured loan. 4. The appellant craves the right to add, alter or amend any ground of appeal." The assessee filed cross objection by taking the following grounds of appeal :- "The assessee filed income tax return for A.Y. 2009-10 on 15.09.2009 declaring taxable income of Rs. 2,,99,980/-. The case was selected for scrutiny and AO made addition of Rs. 8,59,248/- on account of addition of G.P. rate and commission (Rs. 6,94,748/- + Rs. 1,64,500 = Rs. 8,59,248), Rs. 13,44,015/- on account of alleged gift and Rs. 3,98,0001- on account of unsecured loan respectively and assessed him at an income of Rs. 29,01,243/-. The assessee filed an appeal before the CIT. The Learned CIT deleted all the three additions. The department filed an appeal with the ITAT against the order of the CIT appeal and has raised the following grounds of appeal - 1. The department objected to the deletion of Rs. 8,59,248/- made by the AO on account of G.P. rate and commission. The addition of G.P. was Rs. 6,94,738/- and of commission Rs. 1,64,500/-. The addition in G.P. was made by increasing G.P. ratio from 0.08% to 0.05% and commission from Rs. 1,35,500/- to Rs. 3,00,000/-. Both the....
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....t Rs. 3,00,000/- and made an addition of Rs. 1,64,500/- (Rs.3,00,000/- minus Rs. 1,35,500/-). The CIT (A) has deleted the addition by holding as under :- "4.2 In Ground No. 2, the appellant has impugned the addition of Rs. 6,94,738/- on account of increase in GP ratio from 0.08% to 0.5% of the turnover. The AO made this addition on the grounds that sales and purchases were not verifiable in the absence of books of accounts, bills and vouchers. On the other hand, the Id. AR of the appellant submitted that during the course of assessment proceedings, following documents were placed before the Id. AO to justify the accounts: (a) Copy of audited balance sheet along with P&L A/c. and " auditor's report. (b) Copy of sales tax returns. (c) Copy of bank account statement of the appellant. (d) Copy of details of ledger accounts of the appellant. (e) Copy of details of VAT paid. (f) Confirmation from debtors and creditors. The appellant submitted that the ld. AO did not bring on record any discrepancy whatsoever with the above papers. Furthermore, he has mentioned in the assessment order that purchase and sales were not verifiable and therefore, he increased the GP ratio. The AR ....
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....eted." 5. We have heard both the sides on this issue. The assessee has submitted the copy of audited balance sheet and profit and loss account along with the auditor's report, copy of sales tax returns, copy of bank account of the assessee, copy of details of ledger account of assessee, copy of VAT paid by the assessee and confirmation from debtors and creditors etc. Assessing Officer ha d not pointed out any specific defect in the books of accounts. Now, also revenue failed to controvert the findings of CIT (A), therefore, we find no merits in the revenue's contentions on this issue. Similarly, the addition on account of commission income has also been deleted by considering the submissions of the assessee. There was no basis to estimate such income. It was completely baseless addition, therefore, after hearing both the sides, we find that revenue is failed to controvert the finding given by the CIT (A). We uphold the order of CIT (A) on this ground. Accordingly, this ground of revenue's appeal is dismissed. 6. Ground no.2, both in revenue's appeal and cross objection of the assessee, is regarding deleting the addition of Rs. 13,44,015/- on account of gifts. 7. The Assessing Of....
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....Dinesh Bansal. CIT (A) had not done so. It is against the basic principle of natural justice. In view of these circumstances, we find it appropriate to remand this issue to the file of the CIT (A) with a direction that he would give an opportunity to Assessing Officer to cross examine Shri Dinesh Bansal (Donor) with regard to the gifts given to the assessee. Therefore, this issue is restored to the file of CIT (A) and this ground of revenue's appeal and cross objection of assessee issue is allowed for statistical purposes. 9. Ground no.3, both the revenue's appeal and cross objection of the assessee, is regarding deleting the addition of Rs. 3,98,000/- on account of unsecured loan. 10. The Assessing Officer made this addition by holding as under :- "5. A perusal of the balance sheet reveals that the assessee has taken unsecured loans of Rs. 1,68,000/- from Priti Bansal, Rs. 1,00,000/- from Raj Rani & Rs. 1,30,000/- from Pradeep Bansal. The assessee was asked to submit confirmation, Income Tax Particulars and bank statements of the lenders for proving identity, creditworthiness and genuineness with respect to these receipts. Perusal of bank statements of the lenders revealed that....