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2020 (2) TMI 571 - ITAT AHMEDABADRejection of books u/s 145 - Addition on account of alleged under-invoicing of sales made - HELD THAT:- The assessee was buying the milk powder at an average cost price of ₹ 168 to 173/- per kg. on various dates from GCMMF and selling the same at a price around ₹ 173/- to ₹ 175/- to customers barring JDB to whom assessee sold the product at rate of ₹ 135/- per kg. thereby suffering a loss of ₹ 38.40/- per kg. Question would arise, why the assessee was suffering loss only in one case, whereas in all other cases it was getting profit. The explanation of the assessee of alleged commitment to sell the products at lower price was not substantiated, and hence not acceptable. CIT(A) has also observed that the said JDB is not even a related party, and there are no other transactions with them. Therefore, the Revenue authorities are rightly held that books of accounts did not reflect true picture, and accordingly rejected under section 145. There is no evidence or explanation as to why it has sold the items less than the purchase price by making loss of ₹ 38.40 per kg which resulted in under invoicing sale by ₹ 20,74,752/-. Even before me also, the assessee is unable to substantiate its claim with any evidence or valid explanation. Disallowance of interest of total bank interest - HELD THAT:- No infirmity in the orders of the Revenue authorities on this issue, because both have concurrently found that the assessee does not have sufficient interest free funds of his own to advance the sister concern at the lesser rate. The claim of the assessee was that loan was advanced to the party from surplus and/or accrual does not carry any force, because no documentary evidence or material was furnished by the assessee even before me. It is pertinent to note that on one hand the assessee is opting to suffer loss due to sales at much lesser rate and incurring heavy interest expenditure to the extent for loans taken from bank at the rate of 10.72%, on the other hand, the assessee is advancing loan to sister concern at the rate of 2%. Therefore the disallowance made by the Assessing Officer and sustained by the Ld. CIT(A) is justified.
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