2020 (3) TMI 546

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.... reserving the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal." 3. Briefly stated, the facts of the case are that the assessee is into the business of reselling of electrical goods. Return of income for the year under consideration was E-filed on 29.09.2011 declaring income of Rs. 50,01,881/-. Return was selected for scrutiny assessment and accordingly, statutory notices were issued and served upon the assessee. 4. During the course of scrutiny assessment proceedings, the Assessing Officer asked the assessee to confirm the purchases/creditors. The Assessing Officer also issued notices u/s 133(6) of the Income-tax Act, 1961 [hereinafter referred to as 'The Act'] in the cases of 64 parties on test check basis. 5. The assessee furnished confirmations. However, the Assessing Officer noticed that alongwith the confirmations, the assessee did not submit details/ledgers of purchase transactions made during F.Y. 2010- 11. The Assessing Officer observed that the assessee has furnished copy of ledger account for F.Y. 2011-12. The Assessing Officer also deputed an Income-tax Inspector for making spo....

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....it at 10.50%. He, accordingly, deleted the entire addition of Rs. 10,52,65,260/-. 12. Before us, the ld. DR strongly supported the findings of the Assessing Officer and vehemently stated that the ld. CIT(A), while deleting the additions, completely ignored the fact that the ledger account for F.Y. 2010-11 was not submitted by the assessee. It is the say of the ld. DR that the findings of the ld. CIT(A) are completely erroneous on facts. The ld. DR further stated that the assessee has not furnished any quantitative details of trading account and therefore, on the finding of the ld. CIT(A) that sales have been accepted by doubting the purchases, additions cannot be sustained. 13. The ld. DR further stated that merely because the g.p rate in earlier year was accepted by the department, cannot be a reason for deleting the additions, more so, when in earlier years, there were no adverse remarks in relation to purchases. The ld. DR concluded by saying that res judicata is not applicable in Income tax proceedings. 14. Per contra, the ld. counsel for the assessee reiterated what has been stated before the lower authorities. It is the say of the ld. counsel for the assessee that no....

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....yments have been made in F.Y. 2011-12. Therefore, we find no reason for the assessee to keep a track of whereabouts of its suppliers. 19. In so far as the differences in balances of M/s Gloster Cables Ltd is concerned, as per the details, differences are only in the opening balances which are due to the pending reconciliation of opening balances and it is not the case of the Assessing Officer that there is a cessation of liability. As mentioned elsewhere, the Assessing Officer has finally made additions on account of alleged low g.p. In our considered opinion, even when the books of accounts have been rejected by the Assessing Officer, estimation of profit should be as per the material available on record. Comparative sales and g.p details of previous Assessment Years vis a vis Assessment Year under consideration is as under: A.Y. Sales (in crores) G.P. (declared) (%) G.P. (assessed) (%) 08-09 101.29 3.08 3.08 09-10 109.70 2.97 2.97 10-11 146.46 3.08 3.08 11-12 147.98 3.39 10.50 20. It would not be out of place to mention here that in all the earlier Assessment Years, assessments have been framed u/s 143(3) of the Ac....

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....directors would have been otherwise payable in the form of dividend and to avoid Dividend Distribution Tax, commission has been paid to the directors. The Assessing Officer, therefore, made addition of Rs. 73,18,516/- 25. The assessee agitated the addition before the ld. CIT(A). It was brought to the notice of the ld. CIT(A) that similar disallowance was also made in Assessment Year 2010-11 and the same was deleted by the ld. CIT(A) and similar claims were also allowed in earlier years starting from Assessment Year 2007-08 onwards. 26. After considering the facts and submissions, the ld. CIT(A) held as under: I have considered the submission of the appellant and observation of the Assessing Officer in the assessment order. It is seen that appellant has paid commission to the shareholders cum Directors during the year @ .075% to the four Directors and 0.050% to the shareholders. The total commission payment comes to 0.5% of the sales turnover. The appellant submitted before me that it has made commission payment to Directors as well as shareholders from A.Y. 2007-08 onwards and the same has been allowed without any disallowance except in the A.Y. 2010-11. In ....