TaxTMI 
TaxTMI 
2013 (9) TMI 1318
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....ion. 3. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in rejecting the contention of the assessee that the order passed by the learned AO under Section 153A is bad and liable to be quashed as the same has been framed consequent to a search which itself was unlawful and invalid in the eyes of law. 4. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in rejecting the contention of the assessee that the proceedings initiated under Section 153A are liable to be quashed in the absence of a valid search. 5. On the facts and circumstances of the case, the learned CIT(A) ahs erred, both on facts and in law in rejecting the contention of the assessee that the proceedings initiated under Section 153A against the appellant and the assessment framed under Section 153A/143(3) are in violation of the statutory conditions of the Act and the procedure prescribed under the law and as such the same is bad in the eye of law and liable to be quashed. 6. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in rejecting th....
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.... the expenses have been incurred wholly and exclusively for the purposes of business. 12(i) On the facts and circumstances of the case the learned CIT(A) has erred in confirming the order passed by the learned AO rejecting the contention of the assessee that it amounts to reviewing the assessment proceedings for the year under consideration without there being any adverse material on record. (ii) That the above said additions are otherwise untenable since reassessment under Section 153 A consequent to search is to be confined only to the incriminating material belonging to the assessee found during the course of the search. 13. On the facts and circumstances of the case the learned CIT(A) has erred both on facts and in law in ignoring the fact that the assessment for the year under consideration have been scrutinized under Section 143(3) and as such the learned AO was not justified in reviewing its own order." 3 During the course of hearing out of above grounds, only ground No. 11 was pressed before us and all other grounds were not pressed, therefore, grounds No. 1 to 10, 12 & 13 are dismissed as not pressed. 4 Ground No. 11 - After hearing both th....
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....his appeal also the assessee has raised various grounds but only issue in ground No. 11 was pressed before us, therefore, other grounds are dismissed as not pressed before us. 11 In ground No. 11 disallowance of 1/5t h of vehicle maintenance expenditure has been made by the Assessing Officer. 12 In this case also the facts are identical as in the case for Assessment year 2004-05 in ITA No. 1313/Chd/2012 which we have discussed above. In this case also the Assessing Officer has disallowed a sum of Rs. 1,69,280/- being 1/5th of vehicle expenses on account of personal usage. Once the addition has been made in the assessment order u/s 143(3) then there is no justification for addition in the assessment made u/s 153A, therefore, following our order in ITA No. 1313/Chd/2012 in para No. 8, we delete this addition. 13 in the result, ITA No. 1314/Chd/2012 is partly allowed. ITA No. 1315/Chd/2012 - Assessee's appeal 14 In this appeal also the assessee has raised various grounds but only issue is regarding disallowance of vehicle maintenance expenses of Rs. 2,79,630/- was pressed before us. 15 In this case however, no addition was made originally. The ld. counsel of the asse....
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.... Not no. 6 below the new appendix 1 where commercial vehicle has been defined as under: "6. "Commercial vehicle means "heavy goods vehicle". "heavy passenger motor vehicle;' light motor vehicle." Medium goods vehicle" and "medium passenger motor vehicle" but does not include" maxi cab", motor cab", tractor and "road-roller". The expression "heavy goods vehicle" heavy passenger motor vehicle" light motor vehicle", medium goods vehicle", medium passenger motor vehicle", maxi cab", "motor-cab", "tractor and "road roller" shall the meanings respectively assigned to them in section 2 of the Motor Vehicles Act, 1988(59 of 1988)" On going through the above your honour will notice that the commercial vehicle include not only heavy goods vehicle but also include light motor vehicles. The definition is quite comprehensive. Wherever exclusion is required it has been stated so. Further in the note it has been specifically stated that the light motor vehicle shall have the meaning assigned to it in section 2 of the motor vehicles act, 1988. As per section 2(21) of the motor vehicles act, 1988 the light motor vehicle has been defined- 2(21)' light Motor Vehicle' means ....
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....t aside the order of the Ld. CIT(A) and direct the AO to disallow vehicle maintenance only to the extent of 10%. 27 In the result, ITA No. 1316/Chd/2012 is partly allowed. ITA No. 1317/Chd/2012 - Assessee's appeal 28 In this appeal the assessee has raised following grounds: "1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] under Section 143(3) is bad both in the eye of law and on facts. 2(i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law, in confirming the addition of an amount of Rs. 3,34,965/- made by the AO as income earned by the assessee on undisclosed sale of Rs. 17,21,300/- (ii) That the above addition has been confirmed despite the same being made arbitrary rejecting the explanation given by the assessee. (iii) That the above addition is untenable in the absence of any supporting material or evidence to prove the allegation that the assessee has made unaccounted sales. 3(i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law, in confirming the a....
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....the documents clearly point out that the sales have been made by the assessee and these documents cannot be construed merely as estimates. It was further observed that there was no difference in the noting for sale vouchers and the notings in the said documents. Handwriting was confirmed by the assessee. However, during the assessment proceedings some sale bills were provided. Some sale bills in respect of sale bill for Rs. 6,45,000/- and Rs. 18,000/- recorded at page 178 & 179 of the documents were furnished before the Assessing Officer, therefore, after reducing these amounts the Assessing Officer concluded that balance amount of Rs. 17,21,300/- sales were made outside the books. He applied GP Rate of 19.46% on these sales and added a sum of Rs. 3,34,965/- to the income of the assessee. 32 Before the ld. CIT(A) the submissions made before the Assessing Officer were reiterated. It was further contended that the Assessing Officer was not justified in making independent addition on this account because the profit, if any, on such undisclosed sales, would ultimately form part of stock which has been surrendered by theassessee. The ld. CIT(A) did not find force in the submissions a....
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....urrendered on account of excess stock of gold and diamond jewelry while Rs. 16,82,509/- was on account of excess cash found form the business as well as residential premises. The balance of Rs. 8,27,572/- was income surrendered by Shri Anil Talwar which had been withdrawn from the firm. No doubt assessee has surrendered additional income on account of unrecorded business transactions, in fact against the excess gold / diamonds found. Thus I would think that the unrecorded sale transactions of Rs. 3,34,965/- by no stretch of imagination can be said to be covered in the additional income surrendered, unless the assessee is able to correlate to a reasonable extent the excess gold jewelry with the sales as per the 'slips', or that the sale proceeds have been utilized for purchasing such particular items of the stock. It is also pertinent to note here that the assessee did not reply to the specific show cause issued by the Ld. AO. These unrecorded sale cannot be therefore covered under the surrendered amount in the absence of clear explanation by the assessee. Consequently, I have no reason not to sustain the addition, over and above the surrender, as made by the Ld. AO. ....
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....and without prejudice to our above submissions, if it is presumed that the assessee have been making sales outside the books of account, the gross profit earned by the assessees from such sales should exceed the amount of disclosure of unaccounted income made by the assessee. The gross profit earned by the assessee must be reflected by certain assets found from the possession of the assessee. In the present case, the assessee has disclosed substantial amount of income invested in excess stock found from, the premises of the assessee. Adverse inference against the assessee can only be taken if the gross profit earned by him including investment made in such transaction exceed the income surrendered by the assessee u/s 132(4). No cognizance of the income earned by the assessee and disclosed u/s 132(4) can be taken twice, once by way of income earned by him by doing business outside the books of account and secondly when this income is invested for accumulation of unaccounted stocks. It is only the undisclosed income which is taxable in the hands of the assessee." The Assessing Officer did not find force in the above submissions because the documents contained details of sales of j....
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....e facts as well as the contentions of both the parties are identical and therefore, following that order we confirm the order of the ld. CIT(A) in respect of this issue regarding restriction of car depreciation to 15%. 43 Ground No. 5 - This issue is identical to ground no. 11 for Assessment year 2006-07 in ITA No. 1315/Chd/2012. The facts and contentions of both the parties are identical which was made in respect of that order and therefore, following that order, we set aside the order of the Ld. CIT(A) and direct the AO to make disallowance of 1/10t h of vehicle maintenance. 44 In the result, ITA No. 1317/Chd/2012 is partly allowed. ITA No. 81/Chd/2013 - Revenue's appeal 45 In this appeal the revenue has raised the following grounds: "1 Whether on the facts and in the circumstances of the case the ld. CIT(A) has erred in law as well as facts by deleting the addition of Rs. 2,08,35,789/- on account of unexplained investment u/s 69B in stock (Gold) when the same was not objected to by the assessee in the course of search. 2 Whether on the facts and in the circumstances of the case the ld. CIT(A) has erred in deleting the addition on account of excess stock (Gold) ....
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.... date of search Value of Diamond stock as on 23.7.2009 as per books Rs. 46600191 It was observed that stock as per trading account on the date of search should have been Rs. 14,76,49,973/- as per following detail: Gold Jewellery Rs. 101049782/- Diamonds Rs. 46600191/- Actual total stock found was Rs. 22,61,93,681/- as per following detail: Gold Jewellery Rs. 135837,331/- Diamonds Rs. 90356350/- 47 Accordingly to the Assessing Officer excess stock on the date of search was Rs. 7,83,43,708 (Rs. 22,61,93,681 minus Rs. 14,76,49,973). Therefore, the assessee was asked to explain the discrepancy in the surrender amount and the actual cost. The assessee filed reply in the letter dated 21.11.2011 which is as under: "The difference in the stock as calculated by the approved valuer and as shown in the books of account can be correctly worked out only on the basis of difference in the weight as per books and as physically found at the time of search. This is so because the assessee has maintained day to day stock in respect of 18 ct and 22 ct gold jewellery. Moreover, the approved valuer has....
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....ee which mentioned physical quantities of the various items of stock found during the search. Then he referred to page 112 through which reply was given by the assessee. The comparison of the questionnaire and the reply would show that in respect of 22 carat gold jewellery, excess stock was 55.000 gms. Similarly excess stock in respect of 22 carat bullion was 9897 gms. In respect of 18 carat jewellery there was no excess stock in fact there was shortage of 2.90gms. These excess stocks have been valued as per registered valuer and comparison of these would show that there is no difference. 51 On the other hand, the ld. DR for the revenue submitted that valuation of closing stock found during search by preparing the provisional trading account is also on market value and therefore, analyse given by the assessee, is not correct. He strongly supported the order of the Assessing Officer. 52 We have heard the rival submissions carefully . The ld. CIT(A) has decided the issue vide para 5.1 which is as under: "I have carefully considered the submissions of the assessee and the impugned assessment order at para 4.1 to 4.4. The copies of the panchnamas as well as the valuation....
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....n this case, there is no rejection of the books of accounts, nor any adverse findings on the system of accounting followed by the assessee. Coming to the issue of difference in the stock of gold, the excess stock of gold @ Rs. 1380 per gm for 22 ct as well as gold bullion melted as taken by the Valuer, works out to 9952.20 gms (9897 gms of 18 ct and 55.20 gms of 22 ct) which is the accepted difference in weight as per Valuation and as per books. Aside, the 18 ct gold where in no difference was found (in fact the books showed 2.904 gm more) was valued by the valuer @ Rs. 1200 per gm. On therefore applying the rate as done by the valuer, the value comes to Rs. 13,58,37,331/-. I find that the value of the gold as per the books of account has been worked out at Rs. 10,10,49,782/- The ensuing difference, thus, comes to Rs. 3,47,87,549/~. However, on applying the cost price to the excess gold stock, the value comes to Rs. 1,37,51,760/-. Thus the difference which had been added by the Ld AO of Rs. 2,08,35,789/- is therefore found to be arising due to difference on account of valuation only as assessee has valued his stock at cost while the valuer has valued at the market....