TaxTMI 
TaxTMI 
2014 (7) TMI 1383
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....ition of Rs.71,94,0007-, after allowing the benefit of surrendered amount, while adding Rs. 1,16,94,000/-, being unexplained credits. 2. In the facts and circumstances of the case, Ld. CIT(A) has further erred in directing the AO to give the credit of surrendered income of Rs.45 Lacs while discussing the addition of Rs.23,98,2757- made by the AO on account of suppression of gross profit, even when the AO had already allowed the same while making the disallowance on account of credits being unexplained. 3. It is prayed that the order of Ld. CIT(A) be set aside and that of the Assessing Officer restored. 4. The appellant craves leave to add or amend any grounds of appeal before the appeal is heard and finally disposed of. 3. The assessee in the C.O.No.18/Chd/2013 has raised the following grounds of appeal: 1. That the Ld. CIT (A) has erred in holding that the books of account have been rightly rejected by the A.O. 2. That the Ld. CIT (A) have further erred in confirming the addition of Rs. 23,98,275 on account of alleged suppression of gross profit. 3. That the Ld, CIT (A) have erred in sustaining the addition of Rs. 14,30,000/....
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.... on the same day in cash through self cheques. Further, the assessee had also deposited cash in his bank account before issue of cheques to the said party. The details of the cash transactions are tabulated at page 18 of the assessment order. Further enquiries were made by the Assessing Officer from M/s Glass Plastic Co. of India and it transpired that alleged proprietor had already expired on 07.11.2011. The statement of his wife was recorded on oath and she stated that her husband was employed with the assessee as an accountant upto September, 2009 and apart from that job, he was not doing any other business activity. The Assessing Officer, thus concluded that no business of purchase/sale of any goods was ever done by M/s Glass Plastic Co. of India and the assessee was confronted to prove the source of cash deposit as also the violation of section 40A(3) of the Act. Further queries were raised by the Assessing Officer in respect of ICC transaction report obtained from the Excise & Taxation Department, Patiala and VAT returns filed by the assessee which are reproduced on pages 20 and 21 of the assessment order and the reply of the assessee is reproduced at pages 20 to 24 of the as....
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....rd was correct and need not be disturbed. However, in view of the claim of the assessee that the surrender of Rs. 45,00,000/- was made to cover up the discrepancies in the business income, the Commissioner of Income Tax (Appeals) held that credit of this surrendered income should be given after arriving at the total additions made as per the assessment order and where the additions were covered by the quantum of surrender made by the assessee, then there was no scope for any further addition. The Commissioner of Income Tax (Appeals) also upheld the order of Assessing Officer in making additions besides estimating the GP. However, in relation to the entries in the account of M/s Glass Plastic Co. of India, the Commissioner of Income Tax (Appeals) held that while estimating the GP and increasing the figures of sale, the Assessing Officer had considered the transactions in the bank account and had held that no business of purchase/sale of any goods was ever done by M/s Glass Plastic Co. of India. However, because of the cash withdrawal and then re-deposit of the cash, the Commissioner of Income Tax (Appeals) was of the view that the addition of peak balance should only be made in the ....
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....ound various discrepancies/defects which are elaborately discussed by the Assessing Officer in the assessment order but have been concisely pointed out by the Commissioner of Income Tax (Appeals) as under: a) The assessee has contended that books are destroyed in fire. However the A.O. claimed that the fire report does not show detail of books of a/c destroyed in fire. b) There are frequent deposit and withdrawals in the book a/c maintained with Vijaya Bank and the source and destination of cash as well as applicability of 40A(3) and TDS could not be verified in absence of books of a/c. c) In absence of books of account, source and mode of payment to sundry creditors could not be verified. Similarly treatment of subsidy received could not be verified and neither the opening & closing stock, expense payable, purchase & sale, depreciation claimed are verifiable. d) The manufacturing expenses in the year under consideration is 133% of total business receipt against 94.43% in the preceding year. 13. In view of the discrepancies pointed out by the Assessing Officer for which the assessee has no plausible explanation, we are in conformity with the a....
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....also failure of assessee to explain source of credit entries in the bank account. Accordingly, we uphold the addition of Rs. 23,98,275/-. We also uphold the order of Commissioner of Income Tax (Appeals) that the credit of the surrendered income needs to be given after arriving at the total additions made in the hands of the assessee. 16. The first addition made in the hands of the assessee is on account of estimation of gross profit rate and we uphold the said addition. In view thereof, ground of appeal Nos. 1 & 2 in Cross Objection filed by the assessee are dismissed. Similarly, as we have upheld the order of Commissioner of Income Tax (Appeals) in giving the benefit of surrendered amount after arriving at the total addition, we find no merit in the ground of appeal No. 2 raised by the revenue. 17. Now the second aspect of the issue raised in the present appeal is addition made on account of purchases made through M/s Glass Plastic Co. of India. The assessee claims that it had made purchases from the said concern which was the proprietory concern of Shri Naveen Vohra. On enquiries and further examination it was noted that the assessee before making payments to the said conce....