2014 (2) TMI 1232

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....s right in not appreciating the finding of the AO that the assessee has failed to pass on the entire rebate of Rs. 3,171,40,973.70 to the retailers and has kept the balance rebate of Rs. 1,65,86,467/- with him. 2. The appellant craves leave to add, amend or modify the grounds of appeal subsequently." 2. The brief facts of the case are that the AO made an addition of Rs. 48,16,438/- and the relevant part of the findings of the AO at pages 2 to 4 of the order are reproduced for the sake of convenience as under: "During the previous year relevant to A.Y. 2009-10, the assessee was engaged in the business of wholesale of liquor (L-1) & commissioner business of automobiles (Gulati Autos). When the details were being verified, it was noti....

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....n be achieved. In this regard, I am enclosing herewith the photocopy of the sale bills from which your goodself will find that the rebate is also passed to the ultimate retailer.." 3. From the above explanation given by the assessee a fact that emerges is that whether the rebate received by the assessee is ultimately passed in toto to the retailers as per the assessee's own version as stated above or not,. Then the counsel for the assessee was asked the same question and it was disclosed on behalf of the assessee by the counsels that actually during the year rebate received was Rs. 3,71,40,973/- and rebate passed on to the retailers was amounting to Rs. 2,05,54,506/- and net rebate remained with the assessee of Rs. 1,65,86,467/-. The cou....

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....fered huge losses if we had not received the rebate which was only possible by the team of the agents. The duty of the agent was to increase sales and offer less discounts to the retailers. In return the agents were paid reward in the form of commission." From the above explanation filed by the assessee one fact that emerges is that the total rebate remained with the assessee amounting to Rs. 1,65,86,467/- in contest to assessee's own version in paragraph (2) above, wherein it has been mentioned that all the rebate is passed on to the retailers. Now the fact emerges is that whether Rs. 1,65,86,467/- is the extra income of the assessee excluding net profit declared at Rs. 1,17,70,029/-. But taking a considerate view of the matter and all ....

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.... heard the rival contentions and perused the facts of the case. We concur with the findings of the ld. CIT(A) that the A.O. has failed to record any finding in the assessment order that the case of the assessee is akin to the provisions of section 145(3) of the Act. The arguments made by the ld. counsel for the assessee before the ld. CIT(A) are that the assessee furnished audited accounts/tax audit report alongwith books of account and bills/vouchers for purchase/sales of liquor and relating to expenses were produced for verifications. The details and basis of valuation of closing stock were placed on record during the course of assessment proceedings. The state excise and taxation department keeps strict control and supervision over the l....