TaxTMI 
TaxTMI 
TaxTMI 
2012 (3) TMI 735
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....stances 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 fairly covered within the ambit of the judgment. 4. In the facts an....
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.... 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 in the books of account during the year under consideration and enhancement of sales is uncalled for. The ld. c....
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....preciating 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) has erred in sustaining an adhoc addition of Rs. 1,80,000/- out of totally unwarranted addition of Rs. 8,72,283/- made by the AO in the trading account....
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.... 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 Rs. 1,554,258/-, but it was claimed at Rs. 1,48,931/- (Rs. 1,55,258 - 6,327) for personal use of car) which included depreciation on car at Rs. 25,307/- (31,634 - 6,327) and not Rs. 27,260/- (as wrongly mentioned in the assessment order). Thus even 1/5th of depreciation was already claimed le....
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....hat 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 out even a single specific instance on the expenditure having not been properly vouched either during the assessment proceedings or even in the impugned assessment order. Hence the finding of the AO was based on mere surmises. (b) Similarly in the absence of any specific instance even the subsequent assertion of the AO in the ground of appeal that some of such expenses had not been vouched ....