TaxTMI 
TaxTMI 
2015 (8) TMI 1095
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....ated basis without looking into the audited trading and Profit and Loss account. Furthermore, the learned CIT(Appeals) dealt with the said addition and after discussions addition was enhanced by Rs. 1,92,538/- and increased to 11,41,070/- by disallowing the part of the loss sustained in share trading by quoting Sec. 73 of the I. T. Act. 3. That the ld CIT(A) grossly erred on law and facts in disallowing the loss in share trading Rs. 11,41,070/- and thereby enhancing the taxable income and initiating penalty proceedings separately. 4. That the learned A. O. grossly erred on facts and on law in making the addition towards Sundry creditors and the learned CIT(Appeals) erred in sustaining the addition of Rs. 3,19,611/-. 5. That the learned A. O. grossly erred on facts and on law in making addition in relation to unsecured loans Rs. 3,00,000/- in the name of Gera Medicals and the learned CIT (Appeals) also grossly erred in sustaining the said addition. 6. That the learned A. O. grossly erred on facts and on law in making addition of complete miscellaneous expenditure of Rs. 15,12,001/- on unhealthy discussion and the learned CIT(Appeals) also grossly erred in sustaining the ....
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.... case was transferred to ITO, Ward 2(1), Kota to ACIT, Circle-2, Kota, therefore, notice U/s 142(1) of the Act was issued again on 30/08/2010 fixing the case for hearing on 09/09/2010, which was duly served upon the assessee on 30/08/2010. On the date of hearing, none attended nor was any adjournment sought from the assessee. However, the assessee had sent adjournment application through registered post which was received in his office on 06/09/2010 by which adjournment was sought at least for 20 days as the consultant was out of station. Thereafter, again notice U/s 142(1) was issued to the assessee on 08/09/2010 fixing the case for hearing on 21/09/2010. On the date of hearing i. E. 21/09/2010 also, none attended nor any adjournment sought. Thereafter on 04/10/2010, assessee furnished copy of audit report alongwith copy of computation of income and copy of I. T. return for A. Y. 2008-09. Thereafter, assessee has again sought adjournment vide application dated 08/10/2010 stating therein that the assessee is celebrating Navratra and for that he is out of station. Considering the assessee's adjournment application, case is again fixed and duly informed to the assessee for 14/10/2010....
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....ried the matter before the ld CIT(A), who had dismissed the assessee's ground by observing that there was a survey U/s 133A of the Act at the business premises of the assessee on 12/10/2007. Various books of account and documents were found during the course of survey were inventorised. During the course of hearing before the Assessing Officer, the assessee did not produce books of account or other documents inventorised during the survey. The assessee failed to comply to the requirement of notice U/s 143(2) and 142 of the Act and therefore, as per provisions of Section 144(1)(b)(c), the Assessing Officer rightly passed order U/s 144 of the Act. 4. Now the assessee is in appeal before us on this ground. The ld AR of the assessee reiterated the arguments made before the ld CIT(A) and submitted that the assessee had computerized books of account and had submitted all the papers, details produced printouts of ledger accounts maintained in computer system to ld Assessing Officer on 27/12/2010 and also before the CIT(A) on 24/1/2012 as evident from the submissions made to them. The copies of the letters dated 27/12/2010 and 24/1/2012 has been annexed, therefore, ld AR argued that fra....
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....ences. The assessee has filed partly reply to the Assessing Officer and only explanation was that this gross loss was as per audit report and accounts book. Since the books of account and other documents relevant to the facts were also not produced for verification. The assessee was also asked to furnish head wise as well as quantity wise and quality wise inventories of purchases and sales but no such inventory was furnished at the ending reply dated 27/12/2010. The ld Assessing Officer asked to furnish two trading accounts from 01/4/2007 to 12/10/2007 (till the date of survey) and from 13/10/2007 to 31/3/2008, separately. But the same was not submitted before the Assessing Officer. He simply stated that during the course of survey proceedings the trial balance and stock details till 12/10/2007 was provided to the department. Therefore, in order to provide the bifurcated details he requested the Assessing Officer to provide it the copy of these documents. The assessee did not retain copy of them, therefore, it has attached full trading and P&L account. The ld Assessing Officer observed that during the course of survey proceedings, the computerized trial balance and stock register p....
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..... The gross profit rate of 8.74% is considered reasonable in the line of wholesale medical business. Accordingly, no separate addition was considered necessary by him. In the result, the addition of Rs. 11,41,070/- was resulted in enhancement of income by Rs. 1,92,538/-. 9. Now the assessee in appeal before us. The ld AR of the assessee reiterated the arguments made before the ld CIT(A). He has further submitted that the ld Assessing Officer made addition in sales at Rs. 9,48,532/- without any basis. The appellant had declared total sales at Rs. 13,13,70,013/- which includes trading turnover of medical equipment as well as trading turnover of shares. The ld A. O. has estimated the turnover at Rs. 13.25 crores without any basis. The ld CIT(A) wrongly held that sale transactions were speculative in nature as these transactions were made through electronic mode and when the purchases made and shares come on screen of the broker, it tantamount to purchase and when it is sold then it is a perfect sale. He again referred Section 43(5)(d) that an eligible transaction in respect of trading of derivatives referred to in clause (ac) of Section 2(20) of Securities Contracts (Regulation) Ac....
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....see claimed that the assessee has traded these shares through broker and through electronics mode, which comes U/s 43(5)(d) of the Act and shall not be deemed to be an speculative transaction, has wrongly interpreted Section 43(5) of the Act. The assessee has not produced any evidence regarding delivery of shares and transactions note, detail of scrap traded during the year under consideration. Therefore, we do not find any reason to intervene in the order of the ld CIT(A). Accordingly, both these grounds of assessee's appeal are dismissed. 12. The ground No. 4 of the assessee's appeal is against confirming the addition to sundry creditors at Rs. 3,19,611/- and ground NO. 1 of the revenue's appeal is against deleting the addition made by the Assessing Officer on account of sundry creditors at Rs. 14,92,848/-. The ld Assessing Officer observed that the assessee had shown sundry creditors at Rs. 18,12,459/- in the audit report and was asked to furnish the confirmation, complete name, addresses, PAN, copy of ledger to support its claim but the same were not submitted before him even books of account were also not produced before the Assessing Officer. Therefore, he made addition of....
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....llahabad High Court in the case of CIT Vs. Jagdish Prasad Tiwari (2014) 220 Taxman 141 (All) and argued that when the books of account rejected U/s 145(3) of the Act, no addition U/s 68 can be made. Therefore, addition confirmed by the ld CIT(A) may be deleted. 15. At the outset, the ld DR has argued that the Assessing Officer had given number of opportunities to the assessee vide various show cause letters mentioned in the assessment order and it is found that the assessee himself admitted that it has submitted its audit report on 04/10/2010 alongwith computation of income, copy of return for the year under consideration, hardly less than two months were remained with Assessing Officer to complete the assessment. As per assessee's submission as page 120 and 121 of the paper book, the assessee submitted creditors' ledger copy on 18th November, 2010 before the Assessing Officer as per item No. 7. As per page No. 122 and 123 of paper book, which were filed against the show cause letter of ACIT dated 10/12/2010 and at sl. No. 5, the assessee again furnished detail of sundry creditors. Therefore, the assessee's argument is totally beyond the truth that the Assessing Officer has aske....
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....dated 25/12/2010 to furnish the complete name, address alongwith confirmation of M/s Gera Medical agencies in regard to this unsecured loan. As per letter dated 18/11/2010, the assessee had filed ledger copy of M/s Gera Medical agencies but no confirmation regarding the same was filed. Since no books of account or other relevant material was produced, the creditworthiness, identity and genuineness of the above creditor could not be proved nor it be proved that the loan was taken exclusively for the business purposes. Therefore, the Assessing Officer made addition of Rs. 3 lacs in the income of the assessee, which was challenged by the assessee before the ld CIT(A), who has also confirmed the addition by observing that the no confirmation was filed before the Assessing Officer accordingly he dismissed the appeal of assessee. The assessee submitted before us that the assessee had taken loan of Rs. 3 lacs through account payee cheque and interest on which paid by cheque after TDS deducted. The ledger copy of PAN was submitted to the Assessing Officer vide submission dated 27/12/2010 (relevant point No. 5), copy annexed with the paper book at page No. 129, copy of ledger account of M/s....
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.... assessee is directed to cooperative with the Assessing Officer, submit the required confirmation as per law. Therefore, this ground of appeal is set aside to the Assessing Officer. 20. Ground No. 6 of the assessee's appeal is against confirming the addition of miscellaneous expenses at Rs. 15,12,001/- by the ld CIT(A). The ld Assessing Officer observed that during the course of survey proceedings, both the partners had admitted that they voluntarily surrendered additional income of Rs. 41,93,700/- for taxation but while filing the income tax return, the net income had been declared at Rs. 21,94,196/- and claimed various expenses at Rs. 15,12,001/-. Since the assessee had not produced books of account nor any bill or voucher in support of his claim towards expenditure. The genuineness of same could not be established. He further relied on the decision in the case of Motor General Financial Vs. CIT (supra) and made addition of Rs. 15,12,001/- in the income of the assessee. 21. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had confirmed the addition by observing as under:- "I have gone through Assessing Offic....
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....ssee's reply in his assessment order at page 4-5 for issuing final show cause notice to the assessee. He further argued that the ld Assessing Officer vide show cause notice dated 22/12/2010 has not asked to file any evidence with respect to Misc. expenses claimed by the assessee. He referred particularly page No. 124 to 126 of the paper book for this purpose meaning thereby he was satisfied with the genuineness of these expenses, but while framing the assessment order the disallowances were made in the arbitrary manner and he was not justified in disallowance of the expenses at the back of the appellant and even without providing reasonable opportunity of hearing to the appellant. All above expenses are necessary in nature of doing business and are not excessively been claimed looking to volume of business. Printout copy of ledger account had been submitted to the Assessing Officer and to the CIT(A) vide submission dated 27/12/2010 and dated 24/1/2012 respectively. He further relied on the decision in the case of Brij Bhushan Lal Parduman Kumar Etc. Vs. CIT (1978) 115 ITR 524 (SC) on ex parte assessment and State of Kerala Vs. C. Velukutty (1966) 60 ITR 239 (SC) on best judgment an....
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.... Kumar etc. were given without any amount of salary. The complete name and address of these persons were not made available the assessee or in other words, it can be said that assessee was not able to furnish the complete name and address of these persons. However, it is last reply dated 27/12/2010, the assessee filed copy of ledger account of these persons and tried to justify its claim towards salary paid to them. On verification of details, it was found that Rs. 90,000/- salary paid in cash to one Shri Rajesh Soni, who was claimed as purchase manager. An outstanding balance of Rs. 2,19,500/- has also been shown against his name. During the course of survey proceedings, statement of Shri Rajesh Soni was also recorded in which he admitted that his salary has not decided till date and he was getting Rs. 20,000/- per month on account of expenses. Thereafter, the ld Assessing Officer again has given show cause notice on this issue vide letter dated 22/10/2010 to furnish complete details of Shri Rajesh Soni viz address, PAN and confirmation in respect of S/Shri Rajesh Soni, Sonu Kumar, Vatsal Soni, Chouthmal, Manish Kumar and Jitendra Kumar and all other persons to whom salary had bee....
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....phold the order of the ld CIT(A). This ground of revenue is dismissed. 30. The ground No. (iii) of the revenue's appeal is against deleting the addition of Rs. 14,83,182/- to fixed assets. The ld Assessing Officer observed that the assessee had made addition in fixed assets at Rs. 14,83,182/-. The Assessing Officer asked to furnish complete bills and vouchers alongwith source of investment. It was submitted before the Assessing Officer that these assets were introduced by Shri Lucky Bathla from his proprietorship firm amounting to Rs. 10,90,344/- and to that extent his share capital had been credited in personal capital account, remaining additions were made during the year were computer, fire equipments and car Jen Estilo but no bill vouchers and books of account were produced before the Assessing Officer. Therefore, he made addition of Rs. 14,83,182/-. 31. Being aggrieved by the order of the Assessing Officer, the assessee carried by the matter before the ld CIT(A), who had allowed the appeal by observing that the assets were duly shown in the books of account and balance sheet which can either at item of credit side or debit side making addition under the head income as we....