TMI Blog2014 (6) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessee’s 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,76,981 Delhi Purchase Rs. 65,650 Mumbai Purchase Rs. 1,43,325 Rs. 3,85,956 4.1 He further noted that the total sales as on 31/03/2008 were as follows: Sales to 85, Lans Down, Kalkatta Rs. 1,01,001/- 4.2 He pointed out that purchases made on 31/03/2008 exceeded the sales on 31/03/2008 but the assessee was not showing any closing stock. Therefore, the books of account of assessee were impounded on 10/12/2010 u/s 131(3) and released on 24/12/2010. The AO required the assessee to show cause as to why the difference between the purchase and cost of sales as on 31/03/2008 be not taken as closing stock for F.Y. 2007- 08. The assessee gave the following explanation: (3) The assessee firm received garments primarily from M/s Rabani, Rampur by way of courier. The couriers sent by M/s Rabani from Rampur to assessee were containing the goods/material on challan. The courier charges were borne by M/s Rabani. The assessee s proprietorship concern is in receipt of dresses on challan basis which are kept in the outlet for display purposes and are received in advance before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Closing stock as on 31.3.08 (A) (B) Rs. 3,17,570/- 6. Before ld. CIT(A), after elaborating the modus operandi of the assessee s business as noted earlier, the assessee further pointed out that addition had been made despite 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. It was further pointed out that 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. It was further pointed out that 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. Ld. CIT(A) deleted the addition for the following reasons: a) The consistent trade practice of assessee was to receive goods on approval basis from M/s Rabani which was displayed in retail outlet, and it was only on sale that the supplier raised invoices on the assessee s proprietorship concern; b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es preceded purchases and not vice versa. 9.1 Under such circumstances, this method being regularly followed by the assessee the purchases of 31st March could not be matched with the sales of 31st March. Apart from this, the AO did not point out any defect/discrepancy in books of account. Further, it is not disputed that there was no difference in the quantitative tally of purchases and sales. 9.2 Under such circumstances, we do not find any reason to interfere with the order of ld. CIT(A). 10. In the result, this ground is dismissed. 11. Brief facts apropos ground no. 2 are that during the course of assessment proceedings, the AO examined the details of alteration/tailoring charges of Rs. 6,14,290/- paid by the assessee to Ms. Ratna Vyas and M/s RV Company. He noted that TDS had been deducted on the above amounts. He further observed that these expenses had been incurred subsequent to October, 2007. He observed that it was quite odd because for the first six months of the financial year, no alteration/tailoring expenses were seen to be expanded. He pointed out that considering the nature of business of the assessee, it was only natural that, if such, expenses were incu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e nature of transaction as job work. 14. Ld. Counsel for the assessee relied on CIT(A) s finding and submitted that during first six months only purchases were made from these two parties which are confirmed by the fabricator in the statement recorded by the AO. Subsequently, the job work was done by the concerns on which TDS was duly made. Therefore, there was no reason to treat the transactions of purchases as the transaction of job work. 14.1 We have considered the rival submissions and have perused the record of the case. 15. 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 assessee s proprietorship firm. Therefore, 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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