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2019 (4) TMI 697 - AT - Income TaxAddition on account of Reconciliation of Difference in cash balance - HELD THAT:- Ld.CIT(A) while deciding the issue has noted that after considering the audited Balance-Sheet, opening balance and closing balance, AO had not doubted the closing balance cash as on 31.03.2011. Before us, assessee has pointed out that over all cash balance has remained the same. The submission of the assessee has not been controverted by Revenue. Further, no fallacy in the findings of Ld.CIT(A) has been pointed by Revenue - ground of Revenue is dismissed. Addition on account of seized material found - HELD THAT:- Ld.CIT(A) has given a finding that assessee has received ₹ 25 lakh by way of bank transfer of B.N. Chaudhary on 16.07.2011 which was returned in two installments through banks. He therefore held that addition made by the AO on account of cash paid to Mr. Palai was not called for in the case of assessee. Before us, Revenue has not pointed out any fallacy in the findings of Ld.CIT(A) - ground of Revenue is dismissed. Addition difference in cash available and recorded in books of accounts - HELD THAT:- Ld.CIT(A) while granting relief has noted that it was not the case of excess cash found or there was unexplained cash found recorded in the cash books. He further held that in case of shortage of cash, no addition was justified as assessee has withdrawn the money and might have spent the same without claiming any expenditure. He accordingly deleted the addition. Before us, Revenue has not pointed out any fallacy in the findings of Ld.CIT(A) - ground of Revenue is dismissed. Addition alleged shortage of physical stock of goods - HELD THAT:- The issue in the present ground is with respect to addition on account of alleged shortage of physical stock of goods. AO made addition by working out the G.P. at 22% being the G.P. rate upto the date of survey. Ld.CIT(A) has noted that for working out cost of the spare parts, AO had adopted the GP rate of 22% as found at the time of survey on the basis of GP period upto the date of survey. Ld.CIT(A) observed that in case of shortage of stock, the gross profit ratio on the stock sold outside the books has to be taxed. He worked out the unrecorded profits at ₹ 1,47,964/- and upheld the addition to that extent. Before us, Revenue has not pointed out any fallacy in the findings of Ld.CIT(A) - ground of Revenue is dismissed. Addition on account of Deemed Dividend u/s 2(22)(e) - HELD THAT:- Ld.CIT(A) after relying on the decision of Hon’ble Bombay High Court in the case of Universal Medicare [2010 (3) TMI 323 - BOMBAY HIGH COURT] has held that the payment cannot be taxed in the hands of assessee and assessee did not held any beneficial shares in the lending company. Before us, Revenue has not pointed any contrary decision in its support nor has pointed any fallacy in the findings of Ld.CIT(A) - ground of Revenue is dismissed. Addition on account of Unproved Creditors - HELD THAT:- Ld.CIT(A) after considering the submissions has given a finding that during the year there were transactions with the aforesaid parties. AO had not doubted the purchases made and consultancy given and the payments made were also not disputed and that AO had accepted all other transactions but held closing balance as unproved. He has further given a finding that Revenue has not proved that the parties were not in existence or material or services were not supplied. He therefore deleted the addition. Before us, Revenue has not pointed out any fallacy in the findings of Ld.CIT(A) - ground of Revenue is dismissed.
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