TaxTMI 
TaxTMI 
2013 (8) TMI 1060
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.... 1. That the assessee respondent herein, craves leave to support the order of CIT(A), on following grounds decided against the assessee, in terms of rule 27 of ITAT rules, 1963. a) That disallowance of expenditure amounting to Rs. 6,90,462/- u/s 40(a)(ia) was not sustainable once the estimation of income by application of flat GP rate was upheld by the ld.CIT(A). The disallowance was otherwise also, contrary to law. b) That further disallowance of Rs. 100005/- and Rs. 57561/- out of car expenses/depreciation and telephone expenses were also not sustainable even partly, once estimation of income by application of flat GP rate was upheld which runs contrary to two decisions of jurisdictional High Court in the case of CIT v Smt. Santosh Jain (2008) 296 ITR 324(P&H) and CIT v Aggarwal Engg. Co. (2008) 302 ITR 246 (P&H). 2. That the assessee prays his application to be admitted and allowed for arguments on the issues raised hereinabove, which have been discussed and decided against the assessee by the ld.CIT(A) in her order under appeal by the revenue." The claim of the assessee in respect of the abovesaid application would be adjudicated in the paras be....
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.... 4-lot sale to 14-lot sale effected in April, 2004 itself. 63,95,994/- (iii) Cash sale with mention of quantity of goods sold but without mention of name(s) of party(ies) to whom sold as per cash memo. Nos. 2-L to 10-L, 13-L to 15-L, 32-L and 33-L effected in April &. May, 2004. 16,16,850/- (iv) Other sale than mentioned at (i) to (iii) above, with quantity of goods sold and name(s) of party(ies) to whom made mentioned therein as per bills No. 11-L, 12-L, 16L to 31-L, 34L and 1-C to 4-C effected in May & June, 2004. 1,61,24,085/- Total 2,78,67,929/- 6. The Assessing Officer had also sought information from the State Excise & Taxation Department and as per the said information, the assessee had declared sales of Rs. 1,96,07,007/-. The said information was received by the Assessing Officer prior to the filing of the return of income by the assessee. The Assessing Officer noted that in the trading account accompanying the return of income, the assessee had declared sales of Rs. 2.78 crores though in the sales tax return, total sales declared were Rs. 1.96 crores. The explanation of the assessee to the show cause not....
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....essee in view of the opening stock of Rs. 3.07 crores and purchases of Rs. 1.58 crores being made by the assessee. The CIT(Appeals) was of the view that the cash sales of Rs. 37,30,300/- was credited to the trading and Profit & Loss Account and the same was not shown as cash introduced in the name of any person with corresponding liability appearing in the balance-sheet. The CIT(Appeals) further observed that in case the sale of the assessee was rejected, than the other fact would be an increase in closing stock, as the Assessing Officer had not proved that the said sales were outside the books or were unaccounted. The CIT(Appeals) further noted that the assessee had not disputed the purchases and only the sales were disallowed. The Assessing Officer was held to have defaulted in not co-relating the purchases of stock available with the assessee to the sales made by the assessee. Further reliance was placed on different case-laws and the addition of Rs. 37,30,300/- was deleted by the CIT(Appeals). 8. The revenue is in appeal against the order of the CIT(Appeals). 9. The ld. DR for the revenue filed a Paper Book comprising of the various documents. Our attention was drawn to t....
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....&H) and CIT Vs. Sanjay Chhabra [336 ITR 71 (P&H)]. 11. The ld. AR for the assessee stressed that all the facts were before the Assessing Officer including the sale tax return in which the said cash sales were not included. The said sales were declared to the Department in the revised return and the only issue raised in the present appeal was in respect of the cash sales totaling Rs. 37,30,300/-. The ld. AR submitted that against one of the cash sales, there was return of goods and if the transaction was not genuine, the assessee could have omitted to show the return of cash. It was further stressed by the ld. AR for the assessee that it was not necessary to maintain details of cash sales. Reliance was placed on R.B.Jassaram Fateh Chand Vs. CIT [75 ITR 33 (Bom)]. The ld. AR further pointed out that originally before the sales tax authority, the assessee had declared sales of Rs. 1.96 crore and in the revised sales tax return, sales were declared at Rs. 2.78 crores, copy of which is filed at page 62 of the Paper Book. It was fairly admitted by the ld. AR for the assessee that no return of income was filed by the assessee initially after search operation and the return of income wa....
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.... the sales as originally declared to the Sales Tax Department and as in the revised return of income, was claimed to be on account of sales made in lots vide 14 lot sale bills No. 1-lot sale to 14-lot sales in April,2004 amounting to Rs. 101,26,294/- which the assessee claims that by omission was not declared in the original Sales Tax Return. Sales totaling Rs. 63,95,994/- were supported by bills without mentioning of any quantity of goods sold but with names of parties to whom sales were effected in April,2004 itself and the same were accepted by the Assessing Officer. The dispute is in relation to the three sales bills totaling Rs. 37,30,300/- under which cash sales were made in lots without mention of any quantity sold and/or names of the parties to whom sold. Details of the sales made by the assessee vide three bills are as under : Sr. Category Amount (i) Cash sales in lots without mention of any quantity sold and name(s) of party(ies) to whom sold as per the following cash memos: (a) Cash memo. No. 1-lot sale dated 1.4.2004 after considering goods returns with net of such sales (1035000-802000) (b) Cash memo. No. 2-lot sale dated 15.4.....
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....s were transported and even the bills do not talk of the requisite details of GR numbers. 15. The Paper Book reflects another bill No. 07-lot dated 16.04.2004 which is placed at page 37 of the Paper Book in which the quantity is mentioned at 12810 @ Rs. 10/- sold for Rs. 128,300/-. Other lot sales made by the assessee have been accepted in view of the naames of the parties being available and the same are not in dispute. However, in respect of first three bills i.e. 1 to 3 lot sales, no such details have been filed by the assessee. Further, the assessee had failed to declare the said sales in the return of income filed by it before the sales tax authority and only after the information was received by the Assessing Officer, revised returns were filed before the sales tax authority including the said cash lot sale as its turnover. The assessee against Bill No.1-lot sale claims to have received return of goods and also cash transaction in this regard. Where basic details i.e. name of the party is not available with the assessee, the said return of goods cannot be accepted. In view thereof, no reliance can be placed on the sale tax return filed by the assessee. The onus was upon....
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....nd the Tribunal had found as a fact that there was no material on record to indicate that any investment was made outside the books of account to make the sales and in such circumstances the entire sale proceeds could not be added as undisclosed income of the assessee but the addition could be only of the profits embedded in the sales. The High Court in the light of the aforesaid finding of fact while dismissing the reference application under section 256(2) of the Act filed by the Revenue had held that no question of law arose for consideration. In the present case, in the absence of any clear cut and unambiguous finding recorded by the Commissioner of Income-tax (Appeals) and the Tribunal on the basis of the material on record, that the investment in the apples was accounted for in the books of account of the assessee, no advantage or support can be gathered by the assessee from the said decision." 17. Following the ratio laid down by the Hon'ble Punjab & Haryana High Court in CIT Vs Sanjay Chhabra (supra), we reverse the finding of the CIT(Appeals) in this regard and confirm the addition of Rs. 37,30,300/-. The ground No. 1 raised by the revenue is thus, allowed. 18. T....
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....cation for stay of demand, fee of Rs. 500/- is prescribed under sub-section (7) to section 253 of the Act. 20. The Appellate Tribunal, in order to regulate its powers and functions have formulated the Income Tax Appellate Rules, 1963. Rule 27 of Income Tax Appellate Tribunal Rules read as under : "The respondent though he may not have appealed, may support the order appealed against on any of the grounds decided against him. The said Rule 27 provides remedy to the respondent to support an order passed on any of the grounds decided against him." 21. The respondent by way of the said Rule 27 is empowered to support the order appealed against on any of the grounds decided against him. Rule 27 of the Income Tax Appellate Tribunal Rules lays down that where no appeal has been filed by any respondent he may support the order appealed against i.e. the order of the CIT (Appeals) on any of the grounds decided against him. The proposition proposed under Rule 27 of the Income Tax Appellate Tribunal Rules is that the respondent can raise defence against the appeal filed by the appellant on any of the grounds which have been decided against him but under the said prov....
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....n of the CIB and, was based only on reason to suspect. 7. The Ld. Sr. DR, Mr. Shantanu Dhamija, at this juncture raised a primary objection to the effect that the assessee cannot go beyond the order of the CIT(A) and raise the points such as non-recording or non-disclosure of the reasons for reopening the assessment, non-service of the notice under Section 148 and the question of approval of the JCIT under Section 151(1). He pointed out that these are totally new points which are beyond the scope of the appeal which is limited to the question whether the CIT(A) was right in saying that the notice under Section 148 based on reason to suspect and not reason to belief. It is pointed out that the assessee has not filed any appeal or cross-objection against the order of the CIT(A) and, therefore, he cannot raise these new points which would also require investigation of facts. 8. The Ld. Counsel for the assessee sought to meet the aforesaid objection of the Ld. Sr. DR by relying on Rule 27 of the Appellate Tribunal Rules, as well as the following judgments: 1. B.R. Bamasi v. CIT, 2. Marolia and Sons v. CIT, 3. Assam Co. (India) Ltd. v. CIT, ....
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.... though he may not have filed an independent appeal or cross-objection. This Rule clearly supports the assessee. In the present case, the assessee has raised the point of non-recording of reason in ground No. 2 before the CIT(A) though this ground is not so categorical as the Ld. Counsel for the assessee wants us to read. Even so, such ground can be inferred from the fact that the assessee has been repeatedly asking for the reasons recorded which were not supplied to her. Even before the Tribunal right from September, 2004, the assessee has been requesting for production of the department's records obviously calling upon the department to show that reasons for reopening have been recorded, but due to some difficulty or the other, the department has not been able to produce the records. The CIT(A) has not recorded any finding on the question whether the reasons were recorded or not, but having regard to the judgment of the Hon'ble Delhi High Court in Rohtak and Hissar Districts Electric Supply Co. (P.) Ltd, v. CIT, it is possible to hold that he found against the assessee on this point. On this reasoning, it is open to the assessee to raise the question of non-recor....