TMI Blog2012 (10) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... es is also to be remitted back - in favour of assessee for statistical purposes. - I.T.A. No. 4735/Del/2010 - - - Dated:- 5-10-2012 - SHRI I.C. SUHDIR, AND SHRI SHAMIM YAHYA, JJ. Assessee by : Sh. Salil Aggarwal, Adv., Sh. Gautam Jain Sh. Shailesh Gupta, CAs Department by : S h. Sanjay Kumar, Jain, Sr. D.R. ORDER PER SHAMIM YAHYA: AM This appeal by the Assessee is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-XI, New Delhi dated 22.9.2010 pertaining to assessment year 2007-08. 2. The grounds raised read as under:- i) The first issue raised is that Ld. Commissioner of Income Tax (A) has erred in upholding the addition of Rs. 91,64,692/- by rejecting books of accounts under section 145 of the Act. ii) Another issue raised is that Ld. Commissioner of Income Tax (A) erred in upholding the disallowance of claim of deduction under section 80G of the Act of Rs. 34,864/-. iii) The third issue raised is that Ld. Commissioner of Income Tax (A) erred in sustaining the disallowance of claim of following expenses -On account of business promotion - Rs. 30,045/- -Out of Diwali expenses - Rs. 2,68,854/- -Out of advertisement exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterials to same parties in the past also and has also given higher GP ratio. Assessing Officer noted that the assessee company has not produced any documentary evidence to demonstrate that there is any change in terms of reference with reference to the purchase and sales. Thereafter, Assessing Officer cited certain case laws and concluded as under:- Thus, in the light of above discussions and respectfully following the ratio of judgements as discussed above, sec. 145 of I.T. Act, 1961 is invoked and trading results and the net taxable income is increased by making an addition of Rs. 91,64,692/- after adding this figure the gross profit comes to Rs. 357.92 lacs (Rs. 91,64,692/- + 266.28 lacs). Hence, the amount of Rs. 91,64,692/- is disallowed and added back to the income of the assessee. 5. Upon assessee s appeal Ld. Commissioner of Income Tax (A) observed that assessee s counsel has been served with the copy of remand report and the submissions of the assessee are as under:- That in the asstt. order the trading result of the appellant was rejected on the ground that books of accounts were not produced and on our request you remanded the matter to the file of the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs but the appellant has sufficient cause for non production of such documents and that is why the appeal has been made u/r. 46A before you. Reliance is placed on 13 SOT 661 (Mum) Shahrukh Khan vs. DCIT (P-447). It is also placed on record that once the matter was remanded u/r. 46A as per the request of the appellant for admission of fresh evidence and the report has been received from the Assessing Officer stating that some evidence were produced other than the cash vouchers. It is respectfully stated that now it will be the duty of the Ld. Commissioner of Income Tax (A) to examine the evidence u/s. 250(4) read with Rule 46A(4). Reliance is placed on Smt. Prabhavati S. Shah vs. C.I.T. 231 ITR 1 (Bom) Anmol Colours (I) Pvt. Ltd. vs. ITO 121 TTJ 269 (Jaipur) and also C.I.T. vs. DLV Universal Ltd. 197 Taxation 250 (Del.) Regarding trading addition, reliance is also placed on C.I.T. vs. Rice Exports P Ltd. I.T.A. No. 999/2010 (Del.) dated 3.8.2010 and C.I.T. vs. Smt. Poonam Rani I.T.A. No. 406/2009 (Del.) dated 7.5.2010. 6. Ld. Commissioner of Income Tax (A) further noted that on the request of the assessee the matter was remanded to the Assessing Officer. Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er produced in spite of repeated opportunities. Ld. Commissioner of Income Tax (A) further observed that the record reveals that repeated opportunities were allowed to the assessee to establish the reason for low GP and in response the assessee could not produce a single document before the Assessing Officer to establish the fact of the low GP for the relevant period. Ld. Commissioner of Income Tax (A) noted that the remand stage, the assessee has failed to produce the documents asked by the Assessing Officer. Ld. Commissioner of Income Tax (A) further observed that all the aforesaid facts established that books of accounts were not properly maintained by the assessee. The assessee could not explain how the profit margin goes down to such an extent. Hence, Ld. Commissioner of Income Tax (A) observed that the action of the Assessing Officer in estimating the GP cannot faulted. Ld. Commissioner of Income Tax (A) concluded that on consideration of the submissions made by the assessee and considering the case in totality, he was of the opinion that action of the Assessing Officer in invoking the section 145 is justified and further addition of Rs. 91,64,692/- was correct and it does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. However, no reply in this regard was given. Assessing Officer further noted that the assessee has not filed any exemption certificate which shows that the payment is exempt u/s. 80G of the I.T. Act. Hence, the Assessing Officer disallowed the amount of donation of Rs. 80,558/-. 10. Upon assessee s appeal Ld. Commissioner of Income Tax (A) noted that assessee claims that proper documentary evidence was submitted, but the same was neither produced before the Ld. Commissioner of Income Tax (A) nor produced during the course of assessment. Hence, Ld. Commissioner of Income Tax (A) sustained the addition. 11. Against the above order the assessee is in appeal before us. 12. We have heard the rival contentions and perused the records. We find that in this case also disallowance has been made in the absence of the proper evidence submitted by the assessee. We deem it proper and fit to remit this issue to the file of the Assessing Officer to consider the same afresh. 13. Apropos other disallowances : on account of advertisement; business promotion; diwali expenses. In this regard, Assessing Officer disallowed the following expenses :- Advertisement expenses Rs. 32,062/- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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