TaxTMI 
TaxTMI 
2016 (5) TMI 247
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....mitted that as on 17.12.2008, the credit was only Rs. 200/-. However, the assessee debited Rs. 25,000/-. Similarly, on 18.12.2008, the credit was Rs. 285/- and the assessee again debited Rs. 25,000/-. Because of the negative balances in the account, the Assessing Officer found that there was unaccounted purchases. 4. On the contrary, Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the assessee worked out the peak credit and found the negative balances to the extent of Rs. 1,29,716/-. According to the Ld. counsel, the purchase invoices contained the sales and dates on which the payments were made. On 26.03.2009, the assessee withdrew a sum of Rs. 10,00,000/- from the bank and utilized the same to make payment to agriculturists. The withdrawal of money from the bank was shown on 26.03.2009. The payments made to agriculturists were not separately shown as paid on 11.03.2009. The Assessing Officer has verified this. Since there are no mistakes in accounting the purchases, sales and expenses, the Assessing Officer is not justified in rejecting the books of account. Referring to page 6 of the order of the CIT(Appeals), the Ld.counsel submitted that the negative balance ....
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.... 11 creditors. However, only three creditors confirmed the credit in the name of Raj Enterprise. The balance credits to the extent of Rs. 33,04,179/- was not confirmed. The Assessing Officer, after considering the reply filed by the assessee, found that all the 76 closed creditors to whom cash was given, the assessee has not furnished the address of the creditors and the confirmation of the creditors was also not furnished. The assessee has not proved the genuineness of the transactions of purchase. Therefore, the Assessing Officer treated the transactions of purchase to the extent of Rs. 35,06,923/- as non-genuine purchases and Rs. 33,04,179/- claimed in respect of credit purchases was not confirmed. Therefore, the Assessing Officer totally added a sum of Rs. 68,11,102/- towards unproved purchases. The CIT(Appeals), however, deleted the addition made by the Assessing Officer on the ground that the assessee was purchasing turmeric from Agricultural Market Committee and the entire transactions were monitored by the Committee. Accordingly, he deleted the addition. The Ld. D.R. submitted that in the absence of any confirmation from the respective suppliers of the product and the credi....
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....s own related concern, namely, Aachi group. Therefore, there is no need for the assessee to incur any publicity expenses. According to the Ld. D.R., when the product was marketed in the name of Aachi group, there is no necessity for the assessee to incur any publicity expenses. Therefore, the CIT(Appeals) is not justified in allowing the claim of the assessee. 12. On the contrary, Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the assessee is manufacturing and supplying turmeric powder to Aachi group of concern who, in turn, market the same along with their own product like masala. The advertisements are basically for the Aachi products. According to the Ld. counsel, if the brand name Aachi spreads into the market, the product manufactured by the assessee, namely, turmeric would also penetrate the market and resultantly the assessee would be benefited by increasing its turnover. The advertisement for Aachi products would definitely benefit the assessee for sale of his own product. The fact is that the assessee's product was sold in the market in the brand name of Aachi. Therefore, incurring the expenditure by the assessee is only for increasing the turnover of th....
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....ver at the rate of 18%. After allowing the overhead expenses, the Assessing Officer determined the net profit at Rs. 2,57,81,465/- as against Rs. 11,82,054/- declared by the assessee. According to the Ld. D.R., since the assessee has consumed large quantity of packing material, the Assessing Officer has rightly computed the gross profit by increasing the total turnover on the basis of packing material consumed. Therefore, according to the Ld. D.R., the CIT(Appeals) is not correct in deleting the addition made by the Assessing Officer. 16. On the contrary, Shri S. Sridhar, the Ld.counsel for the assessee, submitted that the Assessing Officer enhanced the turnover by comparing the packing material consumed by the assessee. According to the Ld. counsel, there are arithmetical errors in the calculation made by the Assessing Officer. The Assessing Officer considered some of the secondary packing material as packing material consumed for the purpose of estimating the probable sales. The Assessing Officer, in fact, arrived the sales at 37,90,500 Kgs. The Assessing Officer, vide his remand report dated 09.12.2012 confirmed that there was an error in the probable sales calculated in the as....
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....probable sales on the basis of packing material said to be used by the assessee. The fact remains that the assessee has used two types of packing material, one is secondary packing material and another is primary packing material. The cost of packing material ranged from Rs. 72/- to Rs. 180/- per Kg. Whereas the average sale price of the turmeric powder is Rs. 48/- per Kg. Therefore, the CIT(Appeals) came to a conclusion that no prudent businessman would add weight to packing material when the contents are of lesser value. The CIT(Appeals) further found that there is an arithmetical error in computing the packing material. The Assessing Officer has committed mistake by himself adding one more "0". In fact, the actual sale of turmeric powder was 1,25,500 Kgs. However, the Assessing Officer has taken the same as 12,55,000 Kgs. The Assessing Officer confirmed the arithmetic mistake made by him, in the remand report dated 09.12.2012. Therefore, the estimation of the Assessing Officer with regard to sale of turmeric powder was reduced to 26,61,000 Kgs. After elaborately considering the quantity of packing material, the CIT(Appeals) came to a conclusion that some of the packing material ....
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....d in deleting the addition. 19. On the contrary, Shri S. Sridhar, the Ld. counsel for the assessee, submitted that the Assessing Officer has not considered the purchases declared by the assessee to the extent of Rs. 11,85,30,525/-. According to the Ld. counsel , in the financial year 2008-09, the total purchase made by the assessee was Rs. 9,09,84,189/- and the total sales was Rs. 11,85,30,525/-. The Assessing Officer, while arriving at the purchases at Rs. 14,91,94,080/- was of the opinion that sales would have been Rs. 18,19,44,000/-. These purchases include both the purchases relating to the actual turnover declared by the assessee as well as the turnover estimated by the Assessing Officer. According to the Ld. counsel, the turnover declared by the assessee has to be reduced from the turnover estimated by the Assessing Officer. Thus, determining the unaccounted purchases, if at all anything, shall be at Rs. 5,82,09,891/-. This reconciliation was brought to the notice of the Assessing Officer. The Assessing Officer, however, without considering the explanation of the assessee, estimated the unaccounted sales at Rs. 14,91,94,080/- without reducing the sales declared by the assess....