TaxTMI 
TaxTMI 
2016 (8) TMI 317
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....dition of Rs. 1,05,75,670/- for AY 2010- 11 towards purchases without appreciating that the assessee was unable to produce evidence in support of the purchases. 2.The appellant prays that the order of the C!T(A) on the above ground be set-aside and that of the AO be restored. 3.The appellant craves leave to amend or alter any ground or add a new ground which may be necessary." 3. The solitary issue raised in this appeal by the revenue is with regard deleting the addition of Rs. 1,05,75,670/- on account of difference in purchases made by the AO which was deleted by the Ld. CIT(A). 3.1. The Brief background of this case is that during the year under consideration, the assessee was engaged in the business of fabrication and manufacturing of engineering products. During the course of assessment proceedings, the AO noted discrepancy in the purchase account, sale account and its debtors account. On the basis of the same, the AO rejected the books of accounts and estimated the income by estimating the G.P. ratio of 15% and accordingly, addition was made in the assessment order. 3.2. Being aggrieved, the assessee filed an appeal before the Ld. CIT(A) and made exhaustive submissions....
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.... 6,53,461 On this purchase). Rs.58,30,598 Purchase as per P & L A/c Rs.16,36,17,325 3.6. Thus, from the above it is noted that the assessee duly reconciled the purchase of accounts. In addition to the above the assessee furnished further details and evidences to clear all the doubts which were duly considered by Ld. CIT(A) and detailed findings have been recorded, accepting the claim of the assessee that purchase are duly reconciled. Detailed findings of Ld. CIT(A) on the issue of alleged difference in purchase are reproduced as under: "3.3.2 I have duly considered the submission of the appellant and f ind that addition of Rs. 1,03,06,867/- on account of gross profit has been made by the A.O. on the basis of following, observations made by him: 1. Discrepancy in the purchases made in the F.Y. 2009- 10. 2. Total purchase appearing in the P&L Account, is Rs. 16,36,17,324.97, whereas in the purchase register, the total purchase was shown at Rs. 16,5591,135, i.e. difference of Rs. 19,73,810/-. The A.O. has recorded that the appellant vide letter dtd. 20.12.12 furnished party-wise details of purchases made in F.Y. 2009-10 at Rs. 17,69,14,566/- . He has also mentioned th....
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.... during the year is Rs. 58,30,598/- . The VAT amount on fixed assets is Rs. 6,53,461/-, which the appellant has directly posted to VAT account. The total gross purchase inclusive of fixed assets and VAT, therefore, comes to Rs. 1.7,75,68,027/- and the total of purchases excluding purchases of 'f ixed assets, but including VAT, comes to Rs. 17,10,83,968/-. Therefore, the reconciliation furnished by the appellant deals with the total of purchases inclusive of VAT (excluding the amount of fixed assets), which as per the party-wise details comes to Rs. 17,10,83,968/-(17,69,14,566-58,30,598). Thus, there being no discrepancy in the purchase account, the same cannot be a reason for rejection of books of accounts of the appellant." 3.7. Similarly with regard to the discrepancies noticed in sales account also it was found by the Ld. CIT(A) that same are duly tallied and in fact there was no difference; relevant findings of Ld. CIT(A) are reproduced as under: "3.3.4 The second discrepancy noticed by the A.O. is in the sale made in the F.Y. 2009-10. The AO. has observed that in the P&L Account, the appellant has shown total sale consideration at Rs. 16,52,25,906/- and the gross sales ....
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....the opening balance amount of Rs. 4,01,63,498/- as the revised ledger account and Rs. 5,25,56,498/- appearing in the original account. I, therefore, do not find that this can be one of the reasons for rejection of the books of account of the appellant. In any case, the A.O. has not established as-to how because of the said difference true and correct income of the appellant cannot be determined." 3.9. Thus, after taking into account all the facts and evidences it was held by the Ld. CIT(A) that there was no difference. Accordingly, it was held that books of accounts were wrongly rejected by the AO. It was further held by the Ld. CIT(A) that if there were some unpaid amounts which were disallowable u/s 43B then the same can be made by the AO and for this purpose the issue has been sent back to the file of the AO. Under these circumstances, we find that Ld. CIT(A) has been quite fair and justified while addressing all the issues that were raised by the AO and the assessee. It is further noted by us during the course of hearing before us that Ld. DR could nor point out anything incorrect or wrong in the detailed findings recorded by the Ld. CIT(A) and therefore, we do not find any j....