TaxTMI 
TaxTMI 
TaxTMI 
2009 (12) TMI 1077
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....acts and in the circumstances of the case, the CIT(A), Ahmedabad has erred in deleting the addition of Rs. 54,910/- being unexplained cash found during the survey on the ground that telescoping benefit has to be given against addition made on account of shortage of stock and unaccounted sales, whereas there was no evidence to establish any nexus between the two." 3. We have heard the rival contentions and gone through the facts and circumstances of the case. We have also perused the case records including the assessment order as well as the order of CIT(A). The brief facts leading to the above issue are that during the course of survey the cash found was at Rs. 91,400/-. According to the Assessing Officer the regular cash book was not written up to the date of survey i.e. 18-01-2000. According to him, as stated by the Assessing Officer that the rough cash book was written for the period 02-08-1999 to 10-12-1999 and written from 13-1-1999 to 18-01-2000 as per this cash book balance of M/s. Agro Sales Corporation was Rs. 36,490/-. According to the Assessing Officer the difference in cash book was of excess cash found at Rs. 54,910/- and the relevant finding of the Assessing Officer....
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....explained excess cash." 5. We find that the CIT(A) has reasonably allowed the claim of the assessee as there was only difference of Rs. 10,900/- and he also allowed the telescoping benefit on unaccounted sales admitted by the assessee at Rs. 48,14/- on account of sale of fertilizers, seeds and pesticides. We find no infirmity in the order of CIT(A) and we confirm the order of CIT(A). This issue of the Revenue's appeal is dismissed. 6. The next issue in this appeal of Revenue in deleting the addition made by the Assessing Officer by disallowance commission payment made to sister concern u/s.40A(2)(b) of the Act. For this, the Revenue has raised the following ground No.2:- "2. On the facts and in the circumstances of the case, the CIT(A), Ahmedabad has erred in deleting addition made u/s.40A(2)(b) of Rs. 7,54,843/- being excess payment of commission to sister concerns." 7. We have heard the rival contentions and gone through the facts and circumstances of the case. The brief facts are that during the course of assessment proceedings, the Assessing Officer noticed that assessee has received credit notes of Rs. 11,74,683/- on total purchases of Rs. 1,64,32,021/- from M/s. Novart....
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....r case for invoking the provision of section 40A(2) of the Income Tax Act. He failed to verify the nature of commission / discount allowed. Disallowance has been made without verifying the actual facts and nature of expenses. Considering the facts of the present case, disallowance made by the Assessing Officer on the basis of sales is not found to be correct in the eyes of law. Cash discount allowed on early payment cannot be disallowed on the basis of sales effected. Therefore, disallowance mad is not found to be correct in the eyes of law and accordingly the same is deleted. The appellant gets relief of Rs. 7,59,843/-" 8. We find that the CIT(A) has considered the product and incentive gift articles and goods returned credits passed by the assessee to its associate concern to whom it has sold goods to M/s. Novartis India Ltd. and also cash discount have been allowed to the concerns, who availed the benefit of making early payments and noted that the provisions of Section 40A(2)(b) will not be applicable in such cases. The CIT(A) stated that the Assessing Officer has failed to appreciate this fact and the contention of the assessee is correct. In view of the fact that very natur....
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....his appellate order:- "8.2 The contention of the appellant has been carefully considered and perused the case laws relied upon. The facts brought on record in the assessment order on this issue have been considered. I have also considered the remand report submitted by the Assessing Officer. It is a fact that cash sales of Rs. 27,48,079/- have been recorded in the regular books of account after the survey action. These facts have not been disputed by the appellant. It is also a fact that these cash sales have been effected against the advances received from farmers. The Authorized Representative has contended that on one hand the Assessing Officer has accepted said cash sales while computing the total income in the assessment order and no other hand the advances against which cash sales made, have been treated as unexplained and made addition on peak basis u/s.68 of he Income Tax Act. This action of the Assessing Officer is contradictory and resulted in double taxation. This contention carries weigh. The cash sales shown against advances have been accepted by the Assessing Officer. Therefore, adverse inference drawn by the Assessing Officer in respect of advances appears to be no....