2016 (1) TMI 245

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....ision was based on different facts and circumstances of a unrelated assessee.'' ITA No. 383/JP/2013 - Assessee ''1. The Ld. CIT (A) is wrong, unjust and has erred in law in holding that duty draw back amounting to Rs. 85,93,907/- received by assessee is not eligible for deduction u/s 10BA of I. T. Act, 1961. 2. That the Ld. CIT (A) is wrong and has erred in law in confirming the action of Ld. A.O. of invoking provisions of section 145 (3) of I. T. Act, 1961 and of rejection of books of accounts of assessee and further confirming the application of G.P. rate of 17.20% on declared turnover of Rs. 20,95,87,304/- as against declared G.P. rate of 12.03% thereby confirming trading addition of Rs. 1,08,46,091/-. 3. That the Ld. CIT (A) while deciding that as the following amounts were 'paid' during the financial year and not 'payable' and so provisions of section 40 (a) (ia) are not applicable in case of assessee but is wrong and has erred in law in holding: (a) that appellant was liable to deduct TDS on transport charges of Rs. 43,21,000/- despite that the assessee only reimbursed these charges to his agent Sachin Cargo Movers who actually paid transport charges to transpo....

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.... P & L A/c as C & F charges. The breakup of charges are as under:- (i) THC etc. charges 42,56,773.49 (ii) ICD/cfs Inland haulage charges 21,81,974.23 (iii)  Transportation & Handling charges 43,21,000.00 (iv) fumigation charges 3,01,746.00 (v) GSP charges 74,400.00 (vi) Sachin Cargo Agency charges 2,66,500.00   Service Tax on (vi) above 62,718.00 (vii) other charges 7,89,270.24 (viii) Ocean freight 70,071.50   Rs. 1,23,24,384.26     Ld. AO picked up transport charges of Rs. 43,21,000/- and held that assessee has not deducted due TDS there from and disallowed the same u/s 40(a)(ia) of I.T. Act, 1961. In this connection it is submitted that assessee has not directly paid these transport charges but are reimbursed by him to Sachin Cargo Movers. M/s Sachin Cargo Movers who has paid the transport charges and deducted due TDS from transporters and deposited the same in accordance with provisions of I.T. Act, 1961. This is neither disputed in earlier or current year. Since the agent who paid these transport charges deducted due tax there from, the assessee is thus not liable to deduct TDS from transportation charges. Necessary detai....

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....nce of Rs. 15,372/- u/s 40 A(3) being 20% of Rs. 76,860/- being payment exceeding Rs. 20,000/- which is in accordance with amendment made in Section 40 A(3) by Finance Act, 2008 w.e.f. 1-4-89 (i.e. from A.Y. 2009-10). However, it is submitted that the amount disallowed u/s 40A(3) will correspondingly increase the profits and gains of eligible business and same is allowable to assessee while computing deduction u/s 10BA. The Ld. CIT (A) has wrongly rejected the contention of assessee without appreciating legal position. It is prayed that it may be held the profits of the eligible business deductible u/s 10BA. 6.1 Apropos Ground No. 5 of the assessee, the AO made the addition of Rs. 32,47,159/- which was challenged before the ld. CIT(A) in first appeal. On assessee's submission, a remand report was called for by the ld. CIT(A) which is as under:- ''(i) The opening stock was wrongly adopted while preparing the trading account as on date of survey. The correct opening stock as on 01.04.2008 was Rs. 1,90,48,730/-. (ii) There was a difference of Rs. 37,41,134/- in the amount of purchases as adopted by the A.O. and as adopted by the appellant. Bills to the extent of Rs. 31,56,04....

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....as on account of foreign currency rate difference which was corrected at the time of audit. The assessee thereafter on the basis of the remand report provided re casted trading account. The Ld. CIT (A) thereafter held that there was excess stock of Rs. 30,96,058/- as on date of survey which is to be treated as unexplained investment of assessee u/s 69 of the Act and thereby confirmed addition of Rs. 30,96,050/- in income of assessee as against addition of Rs. 32,47,159/- made by Ld. A.O. as profit @ 17.20% on alleged shortage of stock of Rs. 1,88,78,833/- as on date of survey. It is submitted that Ld. CIT (A) has erred in law in working stock on date of survey as per remand report sent by A.O., while the working of assessee was as per books of accounts produced before Ld. A.O. in course of assessment proceedings wherein declared sales and purchase were accepted. The closing stock will work out to Rs. 1,67,12,716/- if G.P. rate of 17.2% is taken as applied by A.O. in assessment as against Rs. 1,46,73,825/- by taking G.P. rate of 15%. As already submitted that the valuation of closing stock found on date of survey has not been properly done and difference being small and negligible t....