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2017 (8) TMI 270 - AT - Income TaxGP rate addition - Held that:- The basis of the addition is the average of the G.P. rate taken by the ld. AO from the submission of the ld. AR which was apparently not verified by him from the records and from the copies of the audited balances sheet which were duly accepted by the department in the earlier years, furnished by the appellant. It is seem that the G.P. rate for the earlier two years i.e A.Y. 2006-07 and 2007-08 was 1.51 % and 3.30% respectively and the average of the two comes to 2.40% as against re G.P. rate in the year under consideration at 4.1% with increased turnover by more than double. Thus, it is clear that the addition was made by the Id. AO on the basis of wrong figure inadvertently provided by the Id. AR during the assessment proceeding. In fact the G.P. rate is much better in the year consideration as compared to earlier years and hence no addition is called for. Therefore, the addition made by the ld. AO is directed to be deleted. - Decided in favour of assessee. Addition of renovation expenses - Held that:- Keeping in view the fact that the turnover has doubled during the year and the appellant has opened one more outlet for which a copy of the lease deed was also filed, I am of the considered opinion that some expenses must have been incurred for the renovation and upkeep of the business purpose, hence it will be appropriate to allow the expenses incurred by cheque and the disallowance of the balance amount is confirmed resulting into partial relief to the appellant. Addition on account of unsecured loans - occurrence of fire - Held that:- Once the tax auditor has audited the books of accounts of assessee much before the fire accident and has mentioned the figure of unsecured loan of ₹ 43,88,880/- from Rakesh Gupta, the contention of the assessee that the assessee received only ₹ 5 lacs from Rakesh Gupta cannot be accepted on the pretext that the reconciliation of the difference could not be made due to dislocation and overlapping of records in the fire accident. The assessee has also placed debtors and creditors list but the same are not found certified by any auditor. Moreover, the PAN mentioned at the confirmation filed before the CIT(A) was found wrong and the assessee at any stage has failed to produce Shri Rakesh Gupta to verify the true state of affairs. The assessee has placed tax audit report in the paper book before us, but on perusal of this audit report, we find that relevant annexures to the items mentioned under Sl. No. 24(a) of the audit report, i.e., “Particulars of each loan or deposit in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year”, have not been filed in the paper book, to verify the alleged reconciliation given by assessee. - Decided against assessee.
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