TaxTMI 
TaxTMI 
2016 (9) TMI 1327
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....ity to the applicant. 3. The Learned CIT (Appeals) erred in confirming the addition of Rs. 5,68,000/- u/s 68 of the Act despite the fact that the Learned Assessing Officer had accepted the cash credits as genuine in the remand report. 4. The Learned CIT (Appeals) erred in confirming the addition on account of disallowance of depreciation. 5. The Learned CIT (Appeals) erred in confirming disallowance u/s 41 (1) of the Act. 6. The Learned CIT (Appeals) erred in confirming disallowance u/s 41 (1) in respect of the creditors : Sureshchandra Hiralal Mali- Rs. 48200 Rachodlal S Parmar - Rs. 39300 despite confirmation filed by him. 7. The appellant firm craves, leave to add, alter or amend any of the grounds mentioned above. 2. Briefly stated facts are that assessee being a partnership firm engaged in the business of manufacturing cement poles filed its return of income on 20/11/2006 declaring Rs.NIL along with audit report u/s 44AB in form no.3CB and 3CD with financial statements. Case was selected for scrutiny assessment and notices u/s 143(2) and 142(1) of the Act were issued and duly served. None attended on behalf of the assessee on the....
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....er. We further observe that ld. CIT(A) called for remand report from the Assessing Officer against the impugned additions made by ld. Assessing Officer in the assessment framed u/s 144 of the Act. It will be relevant here to produce the remand report given by the Assessing Officer in order to adjudicate all the grounds raised by assessee :- OFFICE OF THE INCOME TAX OFFICER, WARD 3(2)& 3(1) 3rd Floor, Aayakar Bhavan, Race Course Circle, Baroda No. BRD./Wd.3(l) &3(2)/09-10 Dt 8/12-03-2010 The Commissioner of Income-tax (Appeals)-II BARODA (Submitted through proper channel) Madam, Sub; Appellate proceedings in the case of Shri Maruti Pole industries - A.Y. 2006-07- Appeal No. CAB/ll-322/08-09 -: Report regarding - Ref; Your letter No. BRD/C!T(A)-ll/Rem.Rep/2009-10, dt.1.12.2009 Kindly refer to the above. My point-wise report on the submission/evidence produced by the assessee is submitted hereunder; 2.1 First of all additional evidences now produced before your honour may not be allowed as the same were, not produced during the course of assessment proceedings inspite of sufficient op....
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.... PAN AEBPB6609M -The depositor is assessed to SBS Rs.50000 tax with ITO 10(2) Ahmedabad. The depositor has fifed, acknowledgement copy of return filed, land holding documents i.e. 8A/7--12 copies, bank of Saurashtra account copy. Is deposits have been made by. cheques. On verification thereof; the identity, genuineness & credit worthiness is proved. 4 Manilal L.Bhadresh Oldbal Old Balanace No comment 5 Mohanlal L. Bhadresh -of bal No comment 6 Mukeshbhai Solanki 98,600 DD No.547500 Dena Bank Rs.48000/- DD No.127743 UBI Rs.49800 Confirmation & ledger account PAN BFFPS5115 D The depositor is assessed to tax. Confirmation copy of Dena bank account have been filed On verification thereof the identity. genuineness & credit worthiness satisfied.. 7 Pithabhai Vasra 200000 DD Dena Confirmation & bank Rs. 2 lacs No.74745 Received copies of Denabank account, land holding documents 8A/712 uttara have been filed. On verification thereof the identity, genuineness & creditworthiness is satisfied. 8 Pushpaben B Bhadr....
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....er by this office, the depositor has filed SB account of Denabank and also stated that he has received the amount on retirement from the company which is credited at the bank account by cheque. In view of the above, the transaction is genuine. 17 Bhupatbhai Solanki 49800 DD No.022747 UBI Rs.49800 Confirmation & ledger account The depositor has filed confirmation and copy of bank account. He has stated that the amount was withdrawn from bank account Rs. 50,000 on 28.1.06 and given cash of Rs. 49800 to the firm and the said amount is received back by him on 3.4.07. The deposit is genuine. 3 Disallowance of Depreciation Rs. 90730- Factory Bldg. The assessee has made addition of Rs. 53,579 GBP 10% thereof Rs. 5358 is disallowed, in this connection the assessee has filed Factory building ledger account but has filed only one bill copy of Rs. 729 for verification. For rest of the addition no supporting evidences are produced. Machinery ; Addition of Rs. 5,40,330 @ 15% Rs. S5372/- = 90730. The assessee was called upon to produce bills & supporting evidence. The assessee has filed/produced bills of Rs.....
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....f the appellant that the appellant was carrying out works at difference places and therefore there was reasonable cause for non-compliance to the notices of the Assessing Officer. This contention has to be rejected at the out set. The appellant's carrying out the business at difference places cannot be a justification of non-compliance. Because carrying of business is sine quanon for filing of return and compliance to the statutory notices. The practice of business cannot be a reason for non-compliance. Moreover, as can be seen from the assessment order first notice was issued on 20.08.2007 and last notice was issued on 06.11.2008 spreading over more than a year. And during the period of more than one year the appellant could not appear even once before the Assessing Officer. On the facts of the appellant's case it is held that order u/s. 144 has been passed correctly. Having said that, the additional evidence filed during the course of appellate proceedings were sent to the Assessing Officer and the successor Assessing Officer has furnished written submissions. Coming to the first ground of appeal against estimation of profit at 8%, the appellant's objection has ....
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....le that assessee's books of account are audited, financial statements were available for verification, no adverse observation has been made by the auditors and no defect has been pointed. We are, therefore, of the view that ld. Assessing Officer was not correct in rejecting the books of account u/s 145(3) of the Act and estimating the profit @ 8% and further being confirmed by ld. CIT(A). We delete the impugned addition of Rs. 10,79,683/- being 8% of Rs. 1,34,96,043/-. This ground of the assessee is allowed. 11. Now we take up the ground relating to addition u/s 68 at Rs. 5,68,000/- towards unexplained cash credit sustained by ld. CIT(A). 12. Ld. AR relied heavily on the remand report of the Assessing Officer which clarifies the facts. 13. On the other hand, ld. DR supported the orders of lower authorities. 14. We have heard the rival contentions and perused the material on record. We find that the impugned addition of Rs. 5,68,000/- towards unexplained cash credit u/s 68 of the Act has been sustained by ld. CIT(A) in respect of following parties :- 1. Pithabhai Vasra Rs.2,00,000/- 2. Shantilal Vajibhai Rs. 70,000/- 3. Alphesh Solanki Rs. 49,0....
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....he view that addition u/s 68 of the Act for Rs. 5,68,000/- needs to be deleted. We do so. This ground of the assessee is also allowed. 17. Next we take up the ground relating to disallowance u/s 41(1) of the Act at Rs. 87,500/-. 18. Ld. CIT(A) has sustained the addition u/s 41(1) of the Act towards sundry creditors namely -Sureshchandra Hiralal Mali at Rs. 48,200/- and Ranchodlal S. Parmar at Rs. 39,300/-. We observe that during the processing of preparing remand report ld. Assessing Officer examined both the sundry creditors. In respect of Ranchodlal S. Parmar ledger account was furnished and on cross verification one letter was received from Ranchodlal S. Parmar that the amount is outstanding for Rs. 39,300/-. Similarly, with regard to sundry creditor Sureshchandra Hiralal Mali balance of Rs. 48,200/-, assessee has asserted that this impugned liability was actually outstanding as at the close of the year. We further observe that assessee was able to satisfy the lower authorities with regard to all other sundry creditors in respect of which addition u/s 41(1) of the Act was made. Further we also observe that Revenue has not been able to controvert the submissions of ld. AR a....
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....led for u/s 41(1) of the Act with regard to the sundry creditors of Rs. 48,200/- and Rs. 39,300/-. We set aside the order of ld. CIT(A) and allow the ground of the assessee. 21. The next ground taken up by the assessee is against the order of ld. CIT(A) confirming addition on account of disallowance of depreciation of Rs. 90,730/-. 22. During the course of assessment proceedings assessee was unable to produce copies of purchase bills towards addition of plant and machinery at Rs. 5,40,330/- and addition towards factory building at Rs. 53,579/-. Due to this reason depreciation @ 15% on Rs. 5,40,330/- and 10% on Rs. 53,579/- was disallowed. In appeal before ld. CIT(A) the ground was partly allowed by ld. CIT(A) by observing as under :- 4.3. I have considered the submissions of the learned Authorized Representative and the order of the Assessing Officer. As also noted earlier the appellant did not file complete copy of bills either during the course of assessment proceedings or during the course of Remand Report and subsequent invoice filed before the undersigned were not considered as genuine and admissible and therefore on principle the Assessing Officer's action ....