2018 (11) TMI 1430

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....f 0.93% declared by the assessee. 2. The ld. CIT(A) has erred on facts and in law in confirming the lump sum disallowance of Rs. 2,21,361/- out of indirect expenses. 3. The assessee craves to amend, alter and modify any of the grounds of appeal. 4. The appropriate cost be awarded to the assessee." 2. Ground No. 1 of the appeal is regarding trading addition made by the Assessing Officer by applying G.P. rate of 1.67% as against the G.P. declared by the assessee at 0.93%. The assessee did not produce books of account before the Assessing Officer for verification and submitted that the same were lost in transit. An FIR was also lodged for the said loss of the books of account. Since the books of account were not p....

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.... on the various factors including the market conditions whether conditions of crop season etc. , therefore, the decline in the G.P. cannot be a reason for addition to be made. He has further contended that for the A.Y. 2013-14, the assessee declared G.P. at 1.67% as against the G.P. rate of 3.22% in the A.Y. 2012-13. The Assessing Officer while passing the assessment order U/s 143(3) of the Act for the A.Y. 2013-14 accepted the G.P. declared by the assessee and the only addition made on account of labour and freight expenses. Thus, the ld AR has submitted that the decline in the G.P. cannot be a basis of rejection of books of account and addition. 4. On the other hand, the ld DR has submitted that the assessee has undisputedly fail....

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....sessing Officer did not find any major defect in the books and consequently the books results were accepted by the Assessing Officer except the disallowance of certain expenses on the ground of personal element but those expenses were beyond the trading account. Therefore, the said decision of the Assessing Officer for the A.Y. 2013-14 cannot be applied as res judicata when the assessee failed to produce the books of account and the Assessing Officer invoked the provisions of Section 145(3) of the Act for the year under consideration. It is a substantial distinguishing facts for the year under consideration as the books results were rejected by the Assessing Officer U/s 145(3) of the Act and the said decision of the Assessing Officer is not....

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....1/- booked by the assessee in the P&L account other than the depreciation, bank charges, interest and insurance. 7. The assessee challenged the action of the Assessing Officer before the ld. CIT(A) but could not succeed. 8. Before us, the ld AR of the assessee has submitted that the Assessing Officer has made disallowance of 10% of the expenses of Rs. 22,13,614/- comprising of audit fee, rent, salary, freight outward expenses, telephone expenses and bardana expenses, total amounting to Rs. 17,92,564/-. When the assessee has given details of specific expenses under each head which are verifiable from the independent source then the ad hoc disallowance of 10% is not justified. In support of his contention, he has relied upon the various....