2012 (10) TMI 1244

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....t collected by the assessee. The amounts considered for each of the assessment year, were as under:- Sl.No. Assessment year No. of vehicles sold Addition made (Rs.) 1. 2003-04 2051 41,02,000 2. 2004-05 521 10,42,000 3. 2005-06 380 7,60,000 4. 2006-07 657 13,14,000 5. 2007-08 564 11,28,000 2. Assessee moved in appeal before CIT(Appeals) for all the years. CIT(Appeals) was of the opinion that evidence found in the course of search of another concern could not be considered for universal application for all other concerns falling in the same group. He was of the opinion that in assessee's case, nothing was found as evidence to show that any amount was collected from customers. As per CIT(Appeals), when books of accounts were not rejected or found defective, an addition on estimates could not be done. Reliance was also placed on the decision of Hon'ble jurisdictional High Court in the case of CIT v. S. Khader Khan Son (300 ITR 157). 3. When the matter came up before us, learned A.R. submitted that similar issue in the case of sister concern falling in the same group, had come up before this Tribunal and it wa....

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....n another groupassessee's case. But by drawing analogy, when this aspect was examined, it was found that this assessee was also collecting some money for getting the vehicles registered. We find that this assessee was collecting Rs. 3,310 for registration of one two wheeler and credited under the account called "registration and delivery charges account" grouped under the income in the P&L a/c and debited a sum of Rs. 2,763 towards said amount and offered remaining sum of Rs. 547 for taxation. But the AO has ignored the debit, although he has himself found this fact during search in group-assessee's case who deals both in four wheelers and two wheelers and has relied mainly on the statements recorded in other cases from the directors who also happen to be the directors of the assessee-company. The main reason for disallowance is that the assessee could not support the remaining expenditure with the bills/vouchers. The learned CIT(A) has further reduced the addition by making his own estimation. Undisputedly, this addition is based on sheer estimation based on statements, which were never confronted to the assessee-company. Any addition which is based on statements which were never ....

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....customers, which can be said to be a direct and best evidence, and the statements of directors and road transport office were recorded in the case of other concern. Otherwise also in those statements it has not been admitted that any portion of the expenses so collected is pocketed by the assessee-company. So what has been stated is that some extra amount is collected for facilitating the work of registration, road tax, etc. and that too, on behalf of the customers and for the help of customers only. Since the assessee has not pocketed any portion of this amount, it would not be worthwhile to discuss about unlawful expenditure which may have been spent in getting the registration of the vehicle that it has to be allowed or not because we are not on that point as that point is not directly involved in the assessee's case. The AO has estimated extra collection at Rs. 2,000 per vehicle on the basis of evidences collected in a different assessee's case and that too, is not relevant because there is no admission of pocketing any portion of this amount by them also. As contrast to the above, the learned CIT(A) has come to a different figure. The plea taken by the assessee that the estima....

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....ive income account and the net of the income over expenditure was included in the P&L a/c of the assessee company. The learned CIT(A) has accepted, to some extent, that certain petty expenses which do not amount to prohibited gifts are incidental to the work in question and have to be legitimately incurred and for that vouchers cannot be obtained. He has accepted the deductibility of such petty expenses. He has estimated Rs. 150 towards necessary expenses and has held them allowable as deduction and balance of Rs. 600 per vehicle has been treated as excess collection for which no corresponding deduction would be available. As stated above, the assessee has collected Rs. 3,310 but has debited only Rs. 2,763. As discussed above, Rs. 2,560 per vehicle has been treated as valid expenditure. Thereafter only Rs. 203 remains to be accounted for. The AO has not disputed the books of account of the assessee. The learned CIT (A) has estimated Rs. 150 as petty expenses towards Pooja, etc., which are treated as permissible. In case, this amount of Rs. 150 is reduced from Rs. 203, Rs. 53 remains with the assessee but because the estimation done by the learned CIT(A) is simplicitor an ad hoc est....