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2015 (2) TMI 166 - AT - Income TaxTurnover estimation - Held that:- Assessee has not disputed the fact that one more outlet was opened during the year under consideration as well as distributorship was given for Kalol and Gandhinagar during the year under consideration. The assessee could not give any cogent reason as to why its sales were lesser than the sales of the preceding year, when one more outlets was opened and two franchisees were added by the assessee. Further, the CIT(A) has estimated the sales only on the basis of the sales of the preceding year without considering the change of the fact of the year under consideration to the extent of opening of one more outlets and giving two distributorship - one at Kalol and other at Gandhinagar. In the above facts and circumstances of the case, in our considered view, the AO is fully justified in estimating the turnover of the assessee at ₹ 5.00 crores (Rupees Five Crores). We, therefore, set aside the order of the CIT(A) on this issue and restore the order of the AO on this issue. - Decided in favour of revenue. Disallowance u/s.40(a)(ia) - non-deduction of TDS on the payment made for packing material - Held that:- The purchases on account of plastic trays, cups, spoons and plastic dishes etc. which did not carry the logo of the assessee and were in the nature of purchases. The purchases were of standardized material available in market. These submissions of the assessee could not be controverted by the Revenue by bringing any material evidence on record. We are, therefore, of the view that the purchases made by the assessee from the aforesaid three parties cannot be considered as being a case of contract which would require deduction of TDS u/s 194C of the Act and, therefore, no disallowance u/s 40(a) (ia) of the Act is called for. -Decided in fvaour of assessee. Late remittance of employees contribution to PF - disallowance confirmed - Held that:- ssue now stands covered against the assessee by the decision of the Hon’ble Gujarat High Court in the case of Commissioner of Income-tax-II Vs. Gujarat State Road Transport Corporation, (2014 (1) TMI 502 - GUJARAT HIGH COURT) wherein it was held that employees’ contribution to provident fund and/or state insurance fund not credited by the assessee to the accounts of the employees in relevant funds within the due dates as specified in section 36(1)(va) of the Act, the amounts are not deductible. - Decided against assessee. G.P. Estimation - Held that:- No distinguishing facts have been pointed out during the year by the DR, we, respectfully following the order of the Tribunal for Asstt.Year 2006- 07, estimate the GP of the assessee at 29% - Decided against revenue. Addition being prior period sales-tax expenses - CIT(A) deleted the disallowance - Held that:- DR could not point out any specific error in the findings of the CIT(A). He also could not controvert the findings of the CIT(A) by bringing any positive material on record to show that the liability for sales tax had not crystallized during the year under consideration. We, therefore, do not find any good reason to interfere with the order of the CIT(A) on this issue - Decided against revenue. Depreciation on motor vehicle - CIT(A) deleted the disallowance - Held that:- CIT(A) in allowing depreciation on vehicles purchased in the name of director was confirmed in appeal by the Tribunal in the Asstt.Year 2006-07 - Decided against revenue. Disallowance u/s.40A(3) - CIT(A) deleted the disallowance - Held that:- CIT(A) deleted the disallowance by observing that as the book results of the assessee was rejected, and the AO estimated the sales and GP ratio, no separate addition was warranted. The CIT(A) further observed that the assessee has furnished evidence that at the first instance, the payments were made through account payee cheques, which were dishonoured and to avoid disconnection of the electricity, which would have resulted in huge losses in view of nature of business of the assessee, i.e. the business of manufacturing of food items and sweets, which require continuous flow of electricity, as any failure of power supply or disconnection thereof would result in contamination of food and sweets in absence of proper refrigeration, the assessee was compelled to take the payment of the bills immediately in cash to avoid disconnection by the electricity company. Therefore, the assessee had reasonable cause for making the payment of electricity bills in cash. - Decided against revenue.
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