TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 2244
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....ncome Tax Act, 1961 vide order dated 08.12.2009 at an assessed income of Rs. 12,52,020/-. While completing the assessment in this case, the Assessing Officer made the following additions/ disallowances to the returned income of the assessee: (i.) The addition on account of disallowance out of consumable store expenses Rs.1,59,912/- (ii.) The addition on account of disallowance out of raw material expenses Rs.2,62,430/- (iii) The addition on account of disallowance out of free sample expenses Rs.1,37,500/- (iv) The addition on account of value of goods returned by customers to assessee Rs. 29,000/- (v) The addition on account of disallowance out of job work expenses. Rs.1,40,410/- (vi) The addition on account of disallowance out of wages expenses Rs.92,827/- (vii) The addition on account of disallowance out of purchases expenses Rs.2,02,267/- (viii) The addition on account of difference in accounts (Rs.13,258/- +58,834/- +Rs.13,030/-) Rs. 85,122/- (ix) The addition on account of disallowance out of payment made to Daljit Singh Rs. 45,000/- 3. By virtue of the impugned order, the learned CIT(A) deleted the additions. Aggrieved, the Department in appeal before me. ....
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....s control. All the purchases of consumable stores were supported by proper bills and documents. The payments of purchase price of petroleum products etc., had been made by payees account cheques. The assessee had even filed details of opening and closing stocks. No defect was found therein. The assessee had produced a chart of prices of consumable stores for the year under consideration and of the preceding year, which was not considered by the A.O. The A.O just compared the percentage of the costs of consumable stores in the year under consideration and for the preceding year, making an addition of Rs. 1,59,912/-. The sales made by the assessee were accepted. All these facts were duly taking into consideration by the learned CIT(A) and it was rightly observed by him that it was not necessary that the expenses regarding consumable stores should also come down proportionately with the decrease in sales, since the assessee could not pre-suppose or envisage that its sales were going to the fall. The learned CIT(A) has also taken into account that the genuineness of the expenses was not challenged by the A.O. Therefore, finding no error therewith, I uphold the action of the learned CIT....
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....enquiry whatsoever from them. The A.O made a selfanalysis of the matter, but even this analysis was not put to the assessee. The learned CIT(A), however, duly took into consideration these facts and circumstances while dealing the addition and the action of the learned CIT(A) is, accordingly, uphold. 8. The next addition made by the A.O was of Rs. 92,827/-, on account of disallowance out of wages expenses. The assessee had claimed wages of Rs. 5,13,600/- on total sales of Rs. 97,50,761/-, @ 5.26%, as against the rate of 2.54% during the preceding year. The A.O rejected the assessee's contention that despite the decrease in sales, it was not possible to reduce the work force immediately, as the business had not closed. The A.O worked out the difference in money terms at Rs. 2,65,220/-, being 2.72% of Rs. 97,50,761/- and made addition of Rs. 92,827/-. The learned CIT deleted this addition. Here also, the addition was made by the A.O without any basis, without doubting either the factum of incurrence, or the genuineness of the expenditure claimed. Therefore, the learned CIT(A) is perfectly justified in deleting this addition also. This deletion is also confirmed. 9. The A.O also mad....
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.... evidence filed in the shape of the copies of bills, the learned CIT(A) observed that these bills had been raised in the name of the assessee company by M/s Flint Group India Pvt. Ltd. It was on considering these factors that the learned CIT(A) deleted the addition made. I do not find anything wrong with this action of the learned CIT(A) also and the deletion is upheld. 10. The A.O made additions of Rs. 13,258/-, Rs. 58,834/- and Rs. 13,030/ , on account of difference in accounts of three parties, i.e., M/s. Exact Leather and Accessories, M/s Gee Kay Internation and M/s Kunwar Overseas, respectively, by observing as follows: "(c) Difference in account with different parties: The copies of account of certain parties with whom assessee had made purchase and sale transactions, revealed the difference in accounts. There are discussed hereunder: (i) M/s Exact Leather and Accessories: The said party has shown the closing balance of Rs. 1,53,982.90(Cr.) in respect of assessee in his ledger account but assessee has shown Rs. 1,40,724.49 (Dr.) in his party account. The assessee attributed this difference to opening balance at Rs. 18182.41 and Rs. 4924/- on account of a bill not ....
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....g that since the difference was on account of opening balances, no addition could be made in the year under consideration. All these factors were duly taken into consideration by the learned CIT(A) while ordering the addition to be deleted. Finding no error here also, the action of the learned CIT(A) is confirmed. 14. The last addition/disallowance made by the A.O was of Rs. 45,000/- on account of part disallowance out of payment made to internal auditor, Sh. Daljit Singh. While making this disallowance, the A.O observed as follows: "(D) Payment made to Sh. Daljit Singh Assessee has claimed an expenses of Rs. 60,000/- towards internal Audit fee paid to Sh. Daljit Singh, CA for first item i.e. the same was not claimed in the last year this is in addition to Audit fee of Rs. 10,000/-. The assessee has produced confirmation from the said CA Still it is observed that in spite of nearly very little business activities in second half of the F.Y 2006-07 i.e. relevant period and keeping in view last year's claim under Audit fee head at Rs. 23,260/- only this claim of Rs. 60,000/- from the business is highly exaggerated. In the totality of facts and circumstances, the claim under this....