TaxTMI 
TaxTMI 
2019 (4) TMI 697
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....d.CIT(A), who vide order dt.25.02.2016 (in appeal No.PN/CIT(A)-12/790,791/2014-15) granted substantial relief to the assessee. Aggrieved by the order of Ld.CIT(A), Revenue is now in appeal before us and has raised the following grounds : "1. On the facts and circumstances of the case, whether the Ld.CIT(A) is justified in deleting the addition of Rs. 67,903/- made by the AO on account of Reconciliation of Difference in cash balance. 2. On the facts and circumstances of the case, whether the Ld.CIT(A) is justified in deleting the addition amounting to Rs. 25,00,000/- made on account of seized material found and 'failed to justify the transaction. 3. On the facts and circumstances of the case, whether the Ld. CIT(A) is justified in deleting the addition amounting to Rs. 3,05,060/- made on account of difference in cash available and recorded in books of accounts. 4. On the facts and circumstances of the case, whether the Ld. CIT(A) is justified in restricting the addition of Rs. 6,71,338/- to Rs. 1,47,964/- by allowing relief to the extent of Rs.5,23,644/- 5. On the facts and circumstances of the case whether the Ld. CIT(A) is justified in deleting the addition amounting....
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....D.R. supported the order of AO. Ld.A.R. on the other hand, reiterated the submissions made before AO and Ld.CIT(A). He further submitted that assessee had maintained two cash books one main cash book and another cash book for Workshop. He pointed to the balance of the cash books for main and work-shop which were placed at page 99 and 100 of the paper book. He submitted that in next year though there was difference in the balance between main cash book and work-shop cash book but over-all there was no difference in cash balance and in support of which, he pointed to the summary of cash book placed in Paper Book. He therefore submitted that the assessee has explained the discrepancies and thus no interference to the order of Ld.CIT(A) is called for. 5. We have heard the rival submissions and perused the material on record. The issue in the present ground is with respect to discrepancies in cash balance. We find that Ld.CIT(A) while deciding the issue has noted that after considering the audited Balance-Sheet, opening balance and closing balance, AO had not doubted the closing balance cash as on 31.03.2011. Before us, assessee has pointed out that over all cash balance has remained ....
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....has given a finding that assessee has received Rs. 25 lakh by way of bank transfer of B.N. Chaudhary on 16.07.2011 which was returned in two installments through banks. He therefore held that addition made by the AO on account of cash paid to Mr. Palai was not called for in the case of assessee. Before us, Revenue has not pointed out any fallacy in the findings of Ld.CIT(A). We therefore find no reason to interfere with the order of Ld.CIT(A) and thus, the ground No.2 of Revenue is dismissed. 9. Ground No.3 is with respect to deletion of addition of Rs. 3,05,060/-. 9.1. During the course of search action at the assessee's premises at Jalgaon, cash of Rs. 1,810/- was found against which cash as per cash book was Rs. 2,81,543/- resulting in difference of Rs. 2,79,733/-. It was explained that cash was taken by the Director to his home. During the course of search at the residence of B.N. Chaudhary cash of Rs. 2,38,950/- was found. Thus, there was still shortage of Rs. 40,783/-, for which the assessee was called upon to explain the descrapancy. On the basis of details furnished by the assessee, it was noticed that cash balance as per main cash book as on 04.10.2011 i.e., the date of ....
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....nt ground is with respect to addition of Rs. 3,05,060/-. Ld.CIT(A) while granting relief has noted that it was not the case of excess cash found or there was unexplained cash found recorded in the cash books. He further held that in case of shortage of cash, no addition was justified as assessee has withdrawn the money and might have spent the same without claiming any expenditure. He accordingly deleted the addition. Before us, Revenue has not pointed out any fallacy in the findings of Ld.CIT(A). Thus, the ground No.3 of the Revenue is dismissed. 12. Ground No.4 is with respect to restricting the addition of Rs. 6,71,338/- to Rs. 1,47,964/-. 12.1. During the course of survey, at the assessee's premises at Jalna stock of spare parts of Rs. 49,61,203/- was inventoried. Considering the GP rate of 22% the cost of such stock was worked out at Rs. 38,69,739/- as against which the book stock was Rs. 45,41,377/-. AO thus worked out the physical shortage of stock of Rs. 6,71,338/- and concluded that the goods were sold out of the books. He accordingly made addition of Rs. 6,71,338/-. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A), who granted partial relief by....
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....ised by the appellant is partly allowed." Aggrieved by the order of Ld.CIT(A), Revenue is now in appeal before us. 13. Before us, Ld.D.R. supported the order of AO. Ld.A.R. on the other hand, reiterated the submissions made before AO and Ld.CIT(A) and further submitted that on the addition that has been upheld by Ld.CIT(A) assessee is not in appeal. 14. We have heard the rival submissions and perused the material on record. The issue in the present ground is with respect to addition on account of alleged shortage of physical stock of goods. AO made addition by working out the G.P. at 22% being the G.P. rate upto the date of survey. Ld.CIT(A) has noted that for working out cost of the spare parts, AO had adopted the GP rate of 22% as found at the time of survey on the basis of GP period upto the date of survey. Ld.CIT(A) observed that in case of shortage of stock, the gross profit ratio on the stock sold outside the books has to be taxed. He worked out the unrecorded profits at Rs. 1,47,964/- and upheld the addition to that extent. Before us, Revenue has not pointed out any fallacy in the findings of Ld.CIT(A). We therefore find no reason to interfere with the order of Ld.CIT(A).....
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....t in the case of Universal Medicare (supra) has held that the payment cannot be taxed in the hands of assessee and assessee did not held any beneficial shares in the lending company. Before us, Revenue has not pointed any contrary decision in its support nor has pointed any fallacy in the findings of Ld.CIT(A). We therefore find no reason to interfere with the order of Ld.CIT(A). Thus, the ground of Revenue is dismissed. 18. Ground No.6 is with respect to addition of Rs. 2,45,388/- on account of unproved sundry creditors. 18.1. During the course of assessment proceedings, assessee was asked to file confirmations for Rs. 1,11,678/- from M/s. Dhanaraj Auto Paint and Rs. 1,33,710/- from M/s. Planners, Mumbai. AO noted that since assessee did not furnish any confirmations, AO treated the aggregate balance of Rs. 2,45,388/- as unproved sundry creditors and made its addition. Aggrieved by the order of AO, assessee carried the matter before Ld.CIT(A) who deleted the addition. "18.3 I have gone through the assessment order and submissions filed by the appellant. In view of the facts that appellant did not get sufficient time to obtain confirmations from the trade creditors, the confirm....