TaxTMI 
TaxTMI 
2014 (11) TMI 651
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....ed his return of income (ROI), on 30.10.2005, along with audit-report in Form No. 3CD, declaring total income of Rs. 5,85,276/-. This ROI was processed u/s 143(1) on 15.05.2006. The regular assessment u/s 143(3) of the Act was made vide order dated 28.12.2007 on a total income of Rs. 58,84,438/-. In arriving at the above income the A.O. has made the following additions :- Taxable income as per Return of income Rs. 5,85,276/- Add: As discussed above. i) u/s 40(a)(ia) Rs. 20,39,121/- ii) Payments made to M/s. Shekhawati Filling Station Rs. 14,36,740/- iii) Payments made to M/s. Verma Tyres Rs. 1,20,000/- iv) Drafts made but debited In cash book u/s 68 Rs. 3,00,400/- v) Deposit in bank account n ....
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.... journal accounts revealed that the entries therein did not match with the corresponding copy of the ledger account of expenses. The P&L account of these books was found to be totally different from that of furnished as a audited. The reason for this anomaly has been stated to be that the Kacchhi Books were produced on that date but the correct books are being produced on 28.11.2007. The A.O. asked the assessee to produce third party evidence to establish transport expenses. The A.O. has mentioned his own reasoning as to why the assessee changed his books of accounts. However, the assessee's contention in this regard is as under:- "The Kacchi books are only the memorandum books and simply written for memorandum purposes. Such books are h....
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....d No. (2) of this appeal are that A.O. has made addition of Rs. 1 4,36,740/- u/s 69 A of the Act. The assessee had purchased diesel and oil from Shekhawat Filling Station during the year. All payments are recorded in the books of the assessee. The A.O. has found that these payments are in cash and are not recorded in the books. The A.O. has directly called for the books of Shekhawati Filling Station and has made this addition. In appeal, the ld. CIT(A) has deleted this addition by observing as under:- "I have considered the submissions of the learned A/R along with the finding of the A.O. given in the assessment order. From the order, it appears that the A.O. has made the addition purely on the basis of ledger account of the appellant as....
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....e. In the case of the appellant, the A.O. has made the addition on the basis of third party books of account which cannot be sustained particularly when the books of account of the appellant has not been rejected. Therefore, in my view, the addition made by the A.O. under section 69A on the basis of third party books of account deserves to be deleted and I order accordingly." 5. Before us both parties have reiterated their earlier stand. The A.O. has made this addition on account of disallowance on the basis of account copy of the party directly obtained, he had consolidated payments made on different dates. As per the books of account of the assessee, there is no violation of section 40A(3) of the Act, as payment were by different vehic....
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....the arguments of the learned A/R alongwith the findings of the A.O. made in the order under appeal. There is no dispute that there is difference on the dates of withdrawal from the bank account of the appellant and in the cash book of the appellant . The A.O. treated the entry of cash under section 68 of the Act as the appellant could not give evidence for the source of such deposits. On going through the findings of the A.O. it is seen that he has mainly made the addition as according to him, there was negative cash balance on the dates of introduction of the cash in the cash book. But this is not correct. On going through the copy of the cash books produced before me during the course of appellant proceedings, it is seen that there is ....