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2013 (6) TMI 592 - AT - Income TaxLow gross profit disclosed - un-explained income - CIT(A) deleted the addition - Held that:- During the course of hearing assessee was required to explain the discrepancy pointed by AO on the basis of month-wise analysis of sales and purchases furnished before AO. The details of both the charts are in terms of pieces. It was pointed out that whereas in the first chart purchases were shown in the month of January 2007, February 2007 and sales in January 2007 but no such details were shown in the second chart contained. As assessee submitted that there may be typographical mistake however CIT(A) has observed that the difference had duly been reconciled in terms of pieces. Thus, it is not clear as to how the discrepancy pointed out by AO got reconciled. Thus matter be restored back to the file of AO for due verification of reconciliation statement - In favour of revenue for statistical purposes. Un-explained credit - CIT(A) deleted the addition - Held that:- Before CIT(A), the assessee furnished various details after considering which CIT(A) deleted the addition but CIT(A) accepted the evidence in contravention to the requirements of Rule 46A particularly the details, inter alia, regarding repayment of loan through account payee cheque. Therefore, restore this matter to the file of AO for deciding the issue afresh, after taking consideration the evidence as were furnished before CIT(A). In favour of revenue for statistical purposes. Commission paid disallowed - CIT(A) deleted the addition - Held that:- As far as commission paid to Shri Pramod Kumar is concerned the main reason for disallowance was that no reply was filed by the party in pursuance to the notice issued under section 133(6). Mere filing of details does not absolve the assessee of the onus cast on it to substantiate the claim for payment of commission. Thus restore the matter back to the file of AO and direct the assessee to produce Shri Pramod Kumar for proper verification of facts. In favour of revenue for statistical purposes. Addition made to the assessable income being 20% of commission paid to other eight persons - CIT(A) deleted the addition - Held that:- Once the persons responded to notice under section 133(6), it cannot be accepted that they did not accept the contents of information sought under section 133(6) unless something is brought on record to contradict the same. As AO himself had allowed 80% of the commission payment AO could not question the adequacy of commission. It is the sole prerogative of business man as to how much commission is to be paid keeping in view the nature of services rendered by persons. Thus ad hoc disallowance was wholly uncalled for with no basis for making 20% of disallowance out of the commission paid. In favour of assessee.
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