TaxTMI 
TaxTMI 
2012 (3) TMI 735
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....ained unsubstantiated. 2. In the facts and circumstances of the case, the ld. CIT(A) has further erred in deleting the trading addition of Rs. 6,92,283/- out of the total of Rs. 8,72,283/-, without appreciating the fact that the AO had specifically asked her to produce the stock register during the course of the assessment proceedings and having failed to do so, the AO was justified in taking an adverse view as per section 114 of the Indian Evidence Act. 3. In the facts and circumstances of the case, the ld. CIT(A) has erred in deleting the trading addition of Rs. 6,92,283/- out of the total of Rs. 8,72,283/- without appreciating the fact that the assessee had failed to maintain any stock register or stock tally. Thus, the ld. CIT(A) has erred in not following the decision of the Hon'ble Supreme Court in the case of S.N. Namasivayam Chettiar V. CIT (1960) 38 ITR 579 (S.C) relied upon by the AO which he was duty bound to follow. Also, the ld. CIT(A) has further erred in not following the decision of the Hon'ble Bombay High Court in the case of Kishinchand Chelllaram V. CIT (1974) 114 ITR 671 (Bombay) relied upon by the AO when the facts of the case are fair....
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....ofit of Rs. 33,30,000/- as against gross profit of Rs. 24,57,717/- shown by the assessee in trading and profit and loss account. Thus, an addition of Rs. 8,72,282/- is made to the trading results shown by the assessee. Penalty proceedings u/s 271(1)(c) of the Act, are initiated with regard to this addition." 6. The AO on the basis of discrepancies noticed by him, rejected the books of account u/s 145(3) of the Act. It was a survey case and the AO noticed certain discrepancies in cash, stock, vis-a-vis the books of account. The assessee did not maintain stock register and quantitative stock tally. Such discrepancies led to rejection of books of account by the AO. The AO applied GP rate of 11.1% as against GP rate shown by the assessee at 9.11%. The AO also increased the turn over of the assessee by Rs. 30.00 lakhs being not corroborated by any material and treated the same as suppression of sales. 7. The ld. CIT(A) recorded his finding in para 2.4, 2.5 and 2.6 which are reproduced hereunder: "2.4 Before me it has been reiterated by the ld. counsel for the assessee that there is no evidence or any material at all on record suggesting that sales made were not recorded i....
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....ld. CIT(A) has erred in sustaining the addition on account of disallowance of expenses to the extent of Rs. 10,000/-, without appreciating the fact that some of the expenses namely sale promotion, staff welfare, shop expenses had not been vouched. 10. The findings of the ld. CIT(A) are given in para 4 which are reproduced hereunder: "4 The fourth ground related to additions of Rs. 20,000/- on account of ad-hoc disallowance out of expenses. The AO has observed that certain expenses were not properly vouched or remained un-vouched. On the other hand, ld. counsel for the assessee has pleaded that no specific instance of un-vouched expense has been pointed out in the assessment order. After considering the rival submissions, I sustain a addition of Rs. 10,000/- and appellant gets part relief on this ground." 11. Having regard to the facts and circumstances of the case and submissions made by the revenue, we do not find any substance therein hence the ground of revenue is dismissed. Cross-objection No. 42/Chd/2010 12. In the Cross-objections the assessee has raised the following grounds: "1 On the facts and in the circumstances of the case, the ld. CIT(A) h....
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....ld. CIT(A). The assessee has field written submission which is self explanatory in nature and the same are reproduced hereunder: "13. Ground No. 2 relates to a disallowance of Rs. 18,885/- made by the AO for personal use of car and telephone at 1/5th of following expenses and depreciation on car: i) Car expenses Rs. 10,650/- ii) Car depreciation : Rs. 27,260/- iii) Cr insurance Rs. 7,542/- Rs. 45,452 iv) Telephone expenses Rs. 42,970/- v) Mobile phone expenses Rs. 6,000/- Rs. 48,970 Rs. 94,422 13.2 (I) Out of car expenses the assessee had already added back an amount of Rs. 2330/- (as 1/5th) in the computation of income (copy placed at page 19 to 31 of paper book) appended to the return and eh AO, while completing the assessment proceeded from income declared in that computation. Hence no further disallowance was called for. (ii) The depreciation on car as per calculations at page of the computation of income amounted to Rs. 31,634/-. 1/5th for personal use thereof worked out to Rs. 6,327/-. Total depreciation on all assets worked out to....
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....ollowing expenses: i) Sales promotion expenses Rs. 18,200/- ii) Staff welfare expenses Rs. 18,042/- iii) Shop expenses Rs. 24,620/- Rs. 60,000/- Varying reasons to justify the disallowance 14.3 At the very outset it may be submitted that while the reasons for disallowance in the impugned assessment order was that the expenses were not properly vouched in the ground of appeal, it has been alleged that 'some of such expenses had not been vouched'. Thus the AO is still not sure as to whether according to him, some of the expenses were not vouched or these were not properly vouched. All the vouchers and details/information asked was supplied 14.4 However, it is submitted that all the vouchers were produced along with books of account and even further details and relevant in as called for were submitted before the AO which were admittedly examined by him. This submission is duly corroborated by the admission of the AO recorded at page 2 of the impugned assessment order stating that 'detailed information and documents called for were examined and placed on record." (ii) He did not point o....