TaxTMI 
TaxTMI 
2018 (1) TMI 394
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....me declaring total income of Rs. 8,85,880/- was e-filed on 25/09/2013. The case was selected for scrutiny. The Assessing Officer made addition of Rs. 10,95,619/- after rejecting books of account and estimating the G.P. rate at 8% instead of 5.26% declared by the assessee. The Assessing Officer also made addition of Rs. 57,732/- out of various expenses debited in the P&L account. The ld. CIT(A) confirmed the G.P. addition and gave part relief from ad hoc disallowance of Rs. 57,732/- from the expenses. 3. Now the assessee is in appeal before the ITAT by taking following grounds of appeal: 1. INVALID INVOKATION OF SEC.145(3) (a) That on the facts and in the circumstances of the case Ld. CIT(A) has grossly erred in law and ....
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....us trading additions of Rs. 10,95,619/- are without justification. 3. Invalid Disallowance of Rs. 28,866/- out of Expenses Arbitrarily That on the facts and in the circumstances of the case Ld. CIT(A) has grossly erred in law and facts in confirming lump sum disallowance of Rs. 28,866/- of expenses. Ld. CIT(A) has without mentioning any specific query on specific voucher of any head of expenses disallowed in lump sum Rs. 28,866/- in the head freight & cartage outward rebate discount & claim, conveyance without any material facts on record therefore disallowance of Rs. 28,866/- out of expenses are without justification. 1. That on the facts and in the circumstances of the case Ld. CIT(A) has grossly erred in law an....
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....of the appellant and has made trading addition of Rs. 10,95,619/- by applying the GP rate of 8% against 5.26% declared by the appellant and also referring to the case of Smt. Gulab Devi Saruparia, the mother of the appellant for the AY 2013-14 wherein on total turnover of Rs. 4,53,06,220/-, a GP rate of 7.25% was declared, which was also enhanced to 8% by the AO. The issue has been discussed by the AO in detail from page No. 2 to 6 of the assessment order. (ii) During the appellate proceedings, the appellant has made detailed submissions as reproduced above and stated that the AO was not justified in rejecting its books of accounts u/s 145 (3) of the Act as it has maintained day-to-day stock details. It was further submitted that t....
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....cussion and looking to the totality of facts and circumstances of the case, it is held that the AO was justified in rejecting the books of accounts of the appellant u/s 145 (3) of the Act. The AO has applied a GP rate of 8% against 5.26% declared by the appellant. It is an undisputed fact that during the year under consideration, the trading results were better in comparison to the immediate preceding year but it may be mentioned here that the appellant has not brought on record any material which may indicate that its cases for earlier years were completed under scrutiny assessments. It may further be mentioned that Smt. Gulab Devi Saruparia, the mother of the Karta of the appellant HUF, for the AY 2013-14 was also engaged in the similar b....
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....in the P&L account of the sister concern. He pleaded that the difference in these two expenses completely explain the difference in G.P. rate of assessee in comparison to sister concern. 7. On the other hand, the ld DR has relied on the orders of the authorities below. 8. The Bench have heard both the sides on this issue. The Bench have also considered the various case laws relied upon and the factual aspect of the case. After considering all these facts, the Bench is of the view that the G.P. rate for the year under consideration was better than immediate preceding year. Further this was a new business started wherein the expenditure on account of rent and the stitching was comparably higher to the other established sister concern un....