TaxTMI 
TaxTMI 
2015 (11) TMI 1127
X X X X Extracts X X X X
X X X X Extracts X X X X
....ry of the company there is no record with the company that the payment has been made directly to the retailers." 3. The relevant material facts, as culled out from records before us, are as follows. The assessee before us is engaged in the business, inter alia, as distributor of Vodafone Essar Telecom Products for the district of Mahendragarh (Haryana). During the course of scrutiny assessment proceedings of this assessee, the Assessing Officer noted that while as per 26AS details in the database of revenue administration, the assessee has received Rs. 81,09,955 from Vodafone Essar Digilink Limited, the assessee has accounted for only Rs. 22,31,197. A further probe into this discrepancy revealed that, according to the assessee, the balance amount of Rs. 58,78,256 represented various tokens and coupons, referred to as 'Vodafone Currency', wh ich was directly issued to the retailers. The Assessing Officer, however, noted that this amount of Rs. 58,78,256 was included in the payments referred to in Form No. 16A, in respect of which taxes are deducted at source, and that the AO's requisition directly to Vodafone Essar Digilink Ltd., on whether the amounts were paid by cheque or draft,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....submissions, perused the material on record and duly considered the facts of the case in the light of the applicable legal position. 6. It is only elementary that information as per da ta base of the revenue authorities cannot be, by itself, a legally sustain able basis for addition being made to the income of an assessee and that such inputs are at best starting points for appropriate inquiries. There is nothing more than these information inputs which have been put against the assessee. We have also noted that, as evident from affidavit a copy of which is placed before us at page 26 of the paper book, the assessee has categorically stated that the impugned "amount of Rs. 58,78,256 shown in form No. 26AS was neither received by me nor receivable to me" and that "the above stated amount of Rs. 58,7 8,256/- was directly paid by the Vodafone Essar Digilink Ltd to the retailers of the company, a complete list of which is provided by the company and placed on f ile". We have further noted that vide letter dated 15.12.2011 (duly acknowledge d by the office on 23.12.2011 - evidence placed on record at page 27 of the paper book), Vodafone Digilink Ltd has given a complete break up of Rs.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....id not maintain stock records. When records were produced before the AO, he noted that one of the purchase bills was not entered in stock register, that E-Top-ups by the Vodafone were raised on "C Series" bills whereas al l Vodafone product billing was done on "V Series" bills. With these observations, he rejected the books of accounts as unreliable and adopted the GP rate of 1 .90%. Aggrieved, assessee carried the matter in appeal before the CIT(A) who deleted this addition and observed as follows : "9. I have considered the issue and the submissions made by the AR. Complete books of accounts along with stock register s were produced before the AO, as evident from the notings in the order sheet. This is also evident from the analysis made by the AO in para 2 (iii) of the assessment order. The discrepancies regarding non entry of 14 items pertaining to the month of Oct. 2008 has been arrived at by the AO before appreciating the way the stock register is maintained by the assessee. This was explained in the written submissions before me along with the stock register , which have been forwarded to the AO. The AO has not made any adver se comments in this regard in the remand report....
X X X X Extracts X X X X
X X X X Extracts X X X X
....easons in the assessment order." 15. So far as this disallowance is concerned, the relevant material facts are as follows. During the Course of the assessment proceedings, the Assessing Officer noticed that there is a substantial increase in payment of salaries by the assessee. As against salary payment of Rs. 5,65,500 in the immediately preceding year, salary paid in the current year was Rs. 17,70, 037. In addition, payments of Rs. 7,91,716 were made for Vodafone Exclaim and Scheme A/c and Rs. 90,000 for sales promotion. The explanation of the assessee that all these payments are properly vouched and supported, that there is a phenomenal increase in sales and that payment of Vodafone Exclaim and Scheme for Rs. 7,91,716 was made as per the Vodafone Policy, was simply brushed aside. The AO noted that while sale has gone up by 64%, the increase in salaries etc is by 369%. He thus allowed increased in salary only on proportionate basis and disallowed rest of the claim. In appeal, however, learned CIT(A) reversed the stand of the AO, deleted this disallowance, and observed as follows : "14. I have considered the issue and the submission s made by the AR. The assessee has produced sa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r the reason that expense is excessive. In view of these discussion, as also approving the reasoning adopted by the CIT(A), we approve the conclusions arrived at by the CIT(A) and declin e to interfere in the matter. 19. Ground No. 3 is also dismissed. 20. In ground No. 4, the Assessing Officer has raised the following grievance : "4. On the facts and circumstances of the case, the Ld. Commissioner of Income-tax (Appeals) has erred in law and facts in deleting the additions: (i). On account of disallowance of interest Rs. 12,7 05/- u/s. 14A(1) of the I.T. Act. (ii). On account of disallowance of interest Rs. 49, 846/- u/s 36(1)(iii) of the I.T. Act. iii). On account of 1/6 th disallowance of expenses of Rs. 38,027/- out of car/motor cycle for personal use. (iv). On account of 1/6 th disallowance of expenses of Rs. 23,233/- out of telephone expenses for personal use. (v). On account of 1/6 th disallowance of expenses of Rs. 16,008/- out of shop expenses being not fully vouched. (vi). On account of 1/6 th disallowance of expenses of Rs. 70,676/- out of sales promotion being not fully vouched. (vii). On account of addition of Rs. 33,000/- for lo w house hold withdraw....