TaxTMI 
TaxTMI 
2018 (8) TMI 275
X X X X Extracts X X X X
X X X X Extracts X X X X
....hat, the learned CIT(A) erred in law in confirming the order made under section 144 of I. T. Act, as the additions made are not related to documents/books/information pending to be complied out of details in notice under section 142(1) of I.T. Act. and instead all additions made could have been made under section 143(3) of I. T. Act. (iv) That, the learned CIT(A) erred in law in confirming the order made under section 144 of I. T. Act, since ledger copies of many heads of accounts like ledger copies of purchase & sales, business promotion expenses, general repair & maintenance, consultancy charges, boundary wall expenses, accounting charges, bank interest, traveling expenses, sundry creditors, sundry debtors, extra premium rewards as extracted from tally package have been submitted during the assessment proceedings which are derivatives of cash book that to when books of accounts have not been rejected." 3. At the time of hearing, no arguments were advanced by ld A.R. of the assessee. Therefore, this ground of appeal is dismissed for want of prosecution. 4. Ground No.2 of appeal reads as under: "That, CIT(A) erred in law in confirming the additions of Rs. 73....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fference in sale between the assessee's return of income and the figure shown in the VAT return, then the only net profit should be added and not the entire suppressed sale figure should be treated as income of the assessee. 9. Ld D.R. supported the orders of lower authorities. 10. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. In the instant case, the Assessing Officer observed that the sale shown by the assessee in its VAT return for the year under consideration is Rs. 43,14,30,522/- whereas the sale as per audited accounts of the assessee is Rs. 42,41,20,650/-. Thus, he inferred that the assessee has suppressed sales of Rs. 73,09,872/- in its return of income. Therefore, the Assessing Officer added the entire Rs. 73,09,872/- to the income of the assessee. 11. On appeal, the CIT(A) confirmed the action of the Assessing Officer. 12. Before us, ld A.R. of the assessee submitted that there was mistake in the VAT return filed by the assessee but could not point out the actual nature of the mistake. In absence of details of the mistake, the said argument cannot be accepted. However, we find force in the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ord. According to the Assessing officer, the assessee has not complied with the terms of the notice issued u/s.142(1) of the Act and, therefore, he made assessment u/s.144 of the Act and consequently in view of the provisions of section 185 of the Act has not allowed deduction for partner's interest of Rs. 3,36,350/- and partner's remuneration of Rs. 1,02,000/-. 20. The above action of the Assessing Officer was confirmed by the CIT(A). 21. We find that it is not in dispute that interest of Rs. 3,36,350/- and remuneration of Rs. 1,02,000/- paid to partners were in accordance with the terms of the deed of partnership and was within the permissible limit prescribed u/s.40(b) of the Act. 22. We find from the impugned order of assessment that the assessee has complied with the notice issued u/s.142(1) of the Act. The Assessing Officer himself has recorded in the assessment order as under: In response to various notices issued u/s. 143(2) and 142(1) of the Act, Sri J.K. Mishra, FCA and AR and Sri Sarbeswar Palai, FCA &. AR of the assessee appeared before the ITO, Ward- 5(2), Bhubaneswar and before the undersigned from time to time. The case was discussed with them. The ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wn as advance from customers in the books of account of the assessee. Letters were issued to the customers from whom the assessee claimed to have received the advance at their postal address given by the assessee to examine the genuineness of the claim. Out of 113 numbers of creditors ( on account of advance from customers) letters were issued in 22 cases to examine the genuineness of the creditors, in 21 cases, letters were returned as unserved but in one case, the creditor i.e. Einstein Academy of Technology and Management has confirmed that it has to receive a sum of Rs. 3,08,221/- as per their books of account. But in the list furnished by the assessee mentioning advance received from customers, it is seen that the assessee-firm was to pay a sum of Rs. 1,00,000/- to the above party. From the above, the Assessing Officer concluded that the assessee-firm does not maintain proper books of account in respect of its business activities. Therefore, the books of account claimed to have been maintained for the asst. year 2012-13 was rejected by invoking the provisions of section 145 of the income Tax Act, 1961. 29. From the audit report it was seen that the assessee-firm has declare....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e correct profit cannot be determined on the basis of books of accounts. I find that the assessing officer is well within his authority in rejecting the books of accounts of the appellant. However, I find that the percentage of the net profit taken by the assessing officer @1% of turnover is of higher side, after considering the earlier years percentage of net profit to turnover. In my considered view, the net profit percentage of 0.5% of total turnover will be more appropriate. Accordingly, the assessing officer is directed to determine net profit of the appellant @0.5% of the turnover. The grounds of appeal are partly allowed." 31. Before us, the only submission of ld A.R. is that in the preceding assessment years, the assessee has shown highest net profit of 0.25%, therefore, the order of the CIT(A) directing the Assessing Officer to compute the income of the assessee by applying the rate of 0.5% to the turnover is higher and same should be accordingly reduced to 0.25% of the turnover. 32. Ld D.R. supported the order of the CIT(A). 33. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. In the instant case, the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....llowance of ESI contribution of Rs. 6,976/- and EPF contribution of Rs. 47,278/- since the amounts are deposited before due date of filing the return of income." 38. The facts of the case are that the Assessing Officer found that the assessee has not deposited an amount of Rs. 6976/- being employee's contribution to ESI and Rs. 47,278/- being employee's contribution to EFP within the due date prescribed under the respective Act and, therefore, he made addition to the income of the assessee. 39. On appeal, the CIT(A) confirmed the action of the Assessing Officer following the decision of Hon'ble Gujarat High Court in the case of Gujarat State Road Transport Corporation, 366 ITR 170(Guj). 40. Before us, ld A.R. submitted that as the employee's contribution is deposited before the due date of filing return of income u/s.139(1), therefore, same deserves to be allowed. 41. Ld D.R. supported the orders of lower authorities. 42. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. In the instant case, the Assessing Officer has disallowed Rs. 6976/- being employee's contribution to ESI and Rs. 47,278/- be....