AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (2) TMI 1024
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....ses were not produced even during remand proceedings. 3. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the above addition made by the A.O by mechanically applying last year's figures cannot be sustained without appreciating the facts relating to various discrepancies discussed in detail in the assessment order and the remand report that the trading addition was not based on account of suppression of sales but on account of huge inflation in purchases from three parties and various other discrepancies. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in accepting the contention of the assessee that "as per ledger account of the appellant the purchase from M/s City Creations is shown at Rs. 20,11,158/- whereas as per the confirmation of the party as mentioned in the A.O's order the net sales figure is Rs. 20,71,603/- thereby resulting in a difference of Rs. 60445/-" without appreciating the facts discussed in the assessment order and remand report that the total purchases from this party have been booked by the assessee at a substantial inflated figure of Rs. 2,22,06,527/-. 5. On the facts an....
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....arges of Rs. 42,86,882/- were paid to 15 parties above Rs. 1 lacs each and the balance amount of Rs. 1.58 crore was paid to the workers of some outside contractors: (ii) Embroidery charges of Rs. 19,60,540/- were shown paid to ten parties above Rs. 1 lacs each; and (iii) Finishing & Washing charges of Rs. 11,60,170/- have been shown paid to four parties above Rs. 1 lacs each, namely Jai Karan Pressing Rs. 3,765,785/- Santosh Washing & Finishing Rs. 5,03,244/-: Raj Kumar pressing Rs. 1,16,725/-; and Ahuja Brothers Rs. 1,63,416/-. 9. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in holding that "dyeing & printing charges was on account of purchase of dyed/printed fabrics from various parties which as per the A.O do not require deduction of TDS" thereby deleting the entire disallowance made u/s 40(a)(ia) of Rs. 31,88,401/- without appreciating the fact discussed in remand report and also without verifying the facts from the assessment records that as per details of closing stock furnished vide letter dated 16/1/2007, the value of fabrics with Dyers has been shown at Rs. 14,25,648/-. 10. On the facts and circumstances of the case and in law, the ....
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....various expenses. Ground No. 13 is related to the salary expenses of Rs. 10 lacs disallowed by the Assessing Officer. 4. The assessee is a Private Limited Company filed its return on 31/10/2005 declaring an income of Rs. 10,85,211/- along with the said return, the assessee company has filed audited balance-sheet, profit and loss account, schedule of expenses, audit report and documents in support of deductions claimed. The business of the assessee company is a manufacturer and export of garments. The Assessing Officer while deciding the gross profit rate has given a finding that the gross profit rate declared in the A. Y 2005-06 is too low i.e. 16.72% compare to the immediate preceding assessment year where the assessee company has shown gross rate or 25.79%. Therefore, the Assessing Officer adopted G.P rate for the year under consideration too that of the immediate preceding assessment year as relates to disallowance u/s 40(ia). The Assessing Officer has disallowed charity and donations to the extent of Rs. 17,556/-, disallowance out of ESI & PF towards Rs. 2,08,542/- disallowance of payments made to false amounting to Rs. 9,615/- disallowance of payments made to postman to Rs. 3....
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....s. 3,07,29,707/- u/s 40(a)(ia) as relates to Ground No. 13, the CIT(A) deleted the estimated disallowance under the head of salary expenses. 5. The Ld. AR submitted that Ground No. 1 to 7 deals with action of the A.O in making trading addition of Rs. 1,45,01,481/- by adopting the GP rate of the preceding year. The A.O has made the impugned addition holding that the assessee did not furnish the various details asked for during the assessment proceedings. The A.O has further alleged that there were various discrepancies in the submissions of the assessee company. The A.O has also held that the assessee has deliberately not produced the books of accounts. The A.O, thus, adopted the GP rate of the last year, i.e. 25.79% and made the addition of Rs. 1,45,01,481/-[15,98,84,034 x(25.79-16.72]. The A.O has discussed this issue in para 3.5-3.10 of the order. However, the said addition was restricted by the Ld. CIT (A) to an amount of Rs. 10,68,331/- holding that the GP of the assessee for the year was duly supported by the books of accounts, bills and vouchers, further accepting the contention of the assessee that the expenditure incurred by the assessee on account of salaries and wages ha....
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....r alleged that the figure appearing in the ledger account of the party in the books of the assessee is also Rs. 20,11,158/-. In this regard, it is submitted that the details of party-wise purchases was submitted by the assessee before the CIT (A). The ledger account of the party was also submitted (PB 36). As per the said ledger account, the purchases made from the said party are Rs. 20,11,158/-. The A.O has stated that as per the confirmation of the party, the net sales made by the party were Rs. 20,71,603/-. Therefore, the only difference which remains is Rs. 60,445/- [20,71,603(-)20,11,158]. Thus, the CIT (A) has sustained the addition for an amount of Rs. 60,445/-. (ii) Rainbow Enterprises:- The A.O has alleged that the total purchases shown from the party are for Rs. 1,54,87,182/-, whereas as per the reply of the party, the total sales made by the party are Rs. 51,86,209/-. In this regard, it is submitted that the ledger account of the party in the books of the assessee company is enclosed at PB 32-35, which was submitted before the CIT(A) and the A.O in the remand proceedings. It is submitted that the A.O has wrongly taken the figure of Rs. 81,61,121/- from the ledger a....
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....essee has deducted TDS on the commission charges of the agent, is an undisputed fact. Therefore, the addition made by the A.O has been rightly restricted by the CIT(A) to an amount of Rs. 53,000/-. 9. The Ld. AR further submitted that as relates to the action of the A.O in making the disallowance of Rs. 10,00,000/- on account of the salary expenses claimed by the assessee, the said addition has been made by the A.O arbitrarily, without giving any proper reason for the same, and without bringing on record any adverse finding. The addition made been made by the on ad-hoc basis. The Ld. AR further submitted that the CIT (A), however, has rightly deleted the impugned addition made by the A.O holding that the A.O has made the addition on estimate basis and without any finding. Further, the CIT (A) has held that the A.O could not controvert the voluminous details filed by the assessee in this regard during the remand proceedings. The findings of the CIT (A) are at Page 26-27 in Para 7.1 of the order. 10. The assessee also submitted following CASE LAWS:- * DCIT Vs. M/S FCB Ulka Advertising Pvt. Ltd (ITA No. 5404/Mum/2007 & ITA No. 6022/Mum/2008 & C.O No. 293/Mum/2007 dated 21th May 20....