TaxTMI 
TaxTMI 
2021 (11) TMI 672
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....ls), Valsad erred in directing to recourse the provisions of section 40(a)(ia) of the I.T. Act, 1961 and directing the appellant to furnish details regarding the same before the AO instead of confirming the whole amount of addition of Rs. 3,32,86,165/- made on account of disallowance of diamond labour expenses as the assessee has not produced the details called for during the course of assessment proceedings as well as during the appellate proceedings. 2. On the facts and circumstances of the case and in Law, the Id. CIT (Appeals), Valsad erred in directing the AO to adopt 3% GP and compute the taxable income instead of confirming the whole amount of Rs. 22,68,512/- made on account of disallowance of purchases as the assessee has not produced details called for during the course of assessment proceedings as well as during the appellate proceedings. 3. On the facts and in the circumstances of the case and in law, the Id. CIT (Appeals), Valsad ought to have upheld the order of the A.O. 4. It is, therefore prayed to set-aside the order of the CIT (Appeals), Valsad and restore the order passed by the Assessing Officer. 5. The appellant craves leave t....
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.... that the assessee advances loan of Rs. 5,25,000/- to Swetaben Vipulbhai. The assessee has on his observation that assessee failed to prove the source of alleged incomes, the said amount was treated as unexplained investment and added under section 69 of the Act. The assessee challenged the addition of labour expenses ad purchases only. 5. On appeal before the ld. CIT(A) on disallowance of labour expenses passed the following para no.7.1 of the order: "7.1 Decision: I have carefully considered the facts and circumstances of the case. I have also perused the findings of the AO in the assessment order and the submission made by the ld. AR. The fact is that this case is identical to the case of Atul Nandalal Daftary. On the identical set of facts and circumstances in the case of Atul Nandalal Daftary, I have decided the issue as under: "The appellant has undertaken labour contract job and done trading of diamonds. The labour contract job was further subcontracted to various parties. The receipt and payment towards contract and sub-contract job were duly reflected in the books of accounts maintained by the appellant. That leaves the matter to be decided on the paym....
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....cannot be sales. Under such circumstances the ld. AR contended that even if the income shown by the appellant as per the financial statements filed by him were not acceptable to the LAO, he ought to have estimated the income of the appellant at reasonable level. This is because any person cannot earn 100% income from the total receipts earned by him. Further, it was respectfully submitted that the appellant had earned a net profit at the rate of less than 1.00% against the total trading receipt of Rs. 1,15,81,660/-. The ld. AR also contended that from the financial statements like Profit & Loss account, Balance Sheet etc., your honour will appreciate that the expenses claimed by the appellant were at a very reasonable level and the net income shown by him was quite reasonable. In this circumstances, the LAO ought to have either accepted the net profit as shown by the appellant or should have estimated the gross profit at the most reasonable level. The above submission by the ld. AR has a force and serve to the cause of the appellant. The profit/income must be arrived after allowing reasonable expenditure incurred by the appellant. Therefore, a reasonable estimate of GP/NP will rend....
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.... that the assessee has no building or factory premises. The assessee made transaction with four parties about labour jobs work of five parties aggregating to Rs. 22,68,512/- and since of diamond of Rs. 12,07,194/- and Rs. 10,89,359/- (R.D Sales). The AO further noted that in similar case of Anil Amrutlal Chawala engaged in the similar business in depth inquiry was made and on the basis of depth inquiry of labour expenses of Rs. 3,32,86,165/- crore by Ashish Enterprises and purchase of Rs. 22,68,512/- was taxed protectively in the hands of assessee and substantively in the hands of the respective parties who claimed labour expenses. The AO further find that the assessee advances loan of Rs. 5,25,000/- to Swetaben Vipulbhai. The ld CITDR submits that he fully support the order of the AO and prayed to reverse the finding of the ld CIT(A). 10. We have considered the submissions of the ld CIT-DR for the revenue and have gone through the order of the lower authorities carefully. The AO made additions in the assessment completed under section 144 of the Act. The while making additions noted that the assessee has debited huge expenses of labour expenses, the assessee has no building or ....