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2014 (6) TMI 567 - AT - Income TaxAdditions on account of difference between the purchase and cost of sales - Facts properly not appreciated Held that:- CIT(A) was rightly of the view that the AO having failed to point out any quantitative discrepancy in the sales and purchases or any defect in the books of account and had made hypothetical addition on notional basis - the supplier M/s Rabani had also confirmed the fact that the goods were sent on approval basis to the assessee as a regular feature of a particular relationship which confirmation was filed with the AO - the assessee had been consistently following the same method of accounting in the earlier assessment years and its assessments had been earlier completed u/s 143(3) of the Act - the assessee was receiving the goods on approval basis and once the item was sold it requested supplier to issue the purchase bill - sales preceded purchases and not vice versa the method being regularly followed by the assessee the purchases of 31st March could not be matched with the sales of 31st March - the AO did not point out any defect/discrepancy in books of account - there was no difference in the quantitative tally of purchases and sales Decided against Revenue. Liability to deduct TDS u/s 194C of the Act Payment made for specific tailoring/alteration charge Held that:- From the statement of Ms. Ratna Vyas recorded by AO, it is evident that the proprietor of both the firms confirmed the transaction of purchases by the assessees proprietorship firm - there was no basis for treating the amount of purchases made from the above proprietorship firms as job work on conjectures and surmises - a probable fact has to yield against a specific statement unless some material is found to said the statement - The assessee had furnished quantitative tally of goods purchased (including purchases made from Ratna Vyas and RV Company) and sold during the year in which no discrepancy had been found or pointed out by the AO thus, there was no reason to interfere in the order of the CIT(A) Decided against Revenue. Sufficiency of drawings Held that:- The AO was quite reasonable in estimating the household expenses @ Rs. 25,000/- per month - he should have taken into consideration the withdrawals of other family members as she was living in joint family thus, the AO is directed to compute the disallowance accordingly Decided partly in favour of Revenue.
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