TaxTMI 
TaxTMI 
TaxTMI 
2014 (9) TMI 1017
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..... 2008-09, a further sum of Rs. 7,27,823/- has been separately added in respect of interest, discount, share trading and sales tax refund. Likewise in A.Y. 2010-11, a further sum of Rs. 1,26,82,857/- has been separately added in respect of these items including income surrendered during survey of Rs. 1,01,25,000/-. The assessee had also included the said income separately in Profit & Loss Account. In the appellate proceedings the ld. CIT(A) found that the defects pointed out by the AO were same as pointed out in A.Y. 2009-10. The matter for A.Y. 2009-10 traveled upto ITAT, Jodhpur Bench and it was found that the application of provisions of section 145(3) of the Act were not justified looking at the nature of defects pointed out by the AO. He accordingly deleted the entire trading addition. 2.2 Before us, the ld. D.R pointed out that the addition for A.Y. 2008-09 was made pursuant to directions of the CIT u/s 263 of the Act. He further submitted that each year is separate and independent and findings given in A.Y. 2009-10 by the ITAT may not apply in other years and, therefore, deletion of addition on this basis is not justified. He also pointed out that during the course of surve....
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....e, the fact of surrender of income cannot be a reason for not accepting the income derived from the regular books of accounts. Specific defects are to be pointed out to reject the duly audited books of accounts. Accordingly, following our own aforesaid order in the assessee's case for the A Y 2009-10 we are of the considered opinion that the rejection of books of accounts is not justified in this case. The proceedings u/s 263 of the Act in A Y 2008-09 would also not make any difference for the reason that the Commissioner had not given any specific direction and the assessment order has also been made like regular assessment. The reasons/findings given in the assessment order are same as given in the assessment for the assessment year 2010-11. We, therefore, uphold the order of CIT(A) and reject Ground Nos. 1 to 4 of both the Revenue's appeals. 3. Ground no. 5, 5(a) & 5(b) in both the appeals are taken against deletion of disallowance of wages of Rs. 1,43,00,450/- for A.Y. 2008-09 and Rs. 1,05,31,837/- for A.Y. 2010-11. 3.1 Briefly stated, the facts of the case are that the AO had found that the expenses are very high i.e. Rs. 5,59,52,210/- in the A.Y. 2008-09 and Rs. 4,39,09,336....
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....ing the ground No. 1 & 2 regarding rejection of books of account and application of higher net profit rate, it has been clearly held that provisions of section 145(3) is not applicable in the case of the appellant and the subsequent addition made by application of higher net profit rate has been deleted as there was no serious defects in maintaining the books of account and the defects pointed out by the AO are insignificant. In view of these findings he deleted the addition. He also deleted the addition for the A.Y. 2010-11 on the basis of similar findings. 3.3 Before us, the ld. D.R supported the assessment order and requested to restore the addition. 3.4 On the other hand, ld. A.R supported the order of CIT(A) and submitted that once AO accepted claim of outstanding wages for 2 months, the defects pointed out by him becomes irrelevant. He pointed out that on the basis of same vouchers when the wages paid and outstanding wages for 2 months can be allowed, there remains no logic for not allowing the balance outstanding wages. According to him expenditure remaining outstanding per se cannot be any reason for making disallowance specifically in the circumstances where proof of pay....
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.... assessee's favour. However the Andhra Pradesh High Court has put this order under interim suspension. On the other hand Gujrat High Court in CIT vs. Sikandar Khan N Tunvar, 33 Taxman.com 133 and Calcutta High Court in CIT vs. Crescent Exports Syndicate, 33 Taxman.com has decided the matter against the assessee. On the contrary Allahabad High Court in the case of CIT vs. Vector Shipping Services (P) Ltd. (Supra) has given decision in favour of the assessee and SLP against the same has been dismissed on 6th July 2014. Giving preference to the latest update of dismissal of SLP against the favourable decision, we are inclined to uphold the finding of Ld. CIT (A) on this alternative reason for deciding the appeal in assessee's favour. We also take support from the decision of ITAT Chennai in the case of ITO Vs. Theekathir Press, ITA No. 2076(Mds)/2012 (Order dated 18th September, 2013) and also ACIT Vs. M/s Eskay Designs, ITA No. 1951/Mds/12 wherein the matter was decided in favour of the assessee on the same issue after taking into considering the controversy created from different decisions of Gujarat, Calcutta and Allahabad High Courts. The Chennai Bench relied on the decision of Su....
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.... the year. On this basis he submitted to uphold the order of CIT(A) on this ground. 5.4 We have heard the submissions of both the parties and perused the material on record. We find that the depreciation is disallowed only for the reason of absence of vouchers though the payments have been made through account payee cheques. In our considered view, the AO should have given weightage to the audited accounts and the tax audit report where the auditors have given true and correct information in form 3CD read with form 3CB. These are statutory documents and evidences should be brought on record to prove any mention in these Forms as incorrect. Further the assets have physical substance which cannot be denied. The payments are made through account payee cheque. In such circumstances, only non-availability of voucher cannot be a reason for making disallowance of depreciation. We therefore uphold the order of the CIT (A) on this ground and reject the ground of appeal of the revenue. 6. In Ground No. 8 the revenue has challenged deletion of disallowance of Rs. 2,62,205/- in respect of repairs and maintenance expenses. The disallowance has been made for want of vouchers. The ld. CIT(A) ha....
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....er, ld. CIT(A) has found that the submissions of the appellant that the entries found in the exercise book is part and parcel of the total expenditure recorded in the regular books of account and for minor discrepancies, the appellant has surrendered substantial amount of income and paid the tax on such surrendered income and therefore no further addition is required to be made is acceptable. Further, it is not a case of the AO that the appellate has made the expenditure from undisclosed income. Even if, such expenditure was incurred out of undisclosed sources, the appellant has surrendered substantial amount of income and paid the tax. In such a situation, there is no justification for making further separate addition. Before us the ld. D.R submitted that the addition has been wrongly deleted. The addition was made in respect of entries found in the impounded books which could not be explained and therefore order of CIT(A) needs to be reversed on this issue. The ld. A.R on the other hand submitted that the amount of Rs. 1,16,47,979/- represents various expenses of different sites maintained by staff in diaries etc. This expenditure, after due verification and corrections is acco....