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2019 (10) TMI 1168 - AT - Income TaxAddition on account of sale of alleged shortage in stock - GP rate application - HELD THAT:- AO worked out the difference of stock on estimate basis and did not point out any specific item which was sold outside of the books of accounts. CIT(A) also passed the impugned order in a slip shod manner, he simply stated that the A.O. worked out the difference during the course of assessment proceedings and applied the GP rate shown by the assessee. Explanation of the assessee wherein it was stated that the stock was lying in heaps in the ground and was taken in the round figures and even the rates of purchase were taken in round figures was not rebutted, therefore it appears that the calculation of the stock at the time of search was not accurate and particularly when the A.O. had not rejected the books of accounts then the addition made by the A.O. and sustained by the Ld. CIT(A) on estimate basis was not justified, accordingly the same is deleted. Disallowance of the salary paid - Excess salary debited by assessee - HELD THAT:- Assessee was having four employees namely Shri Kuldeep Kumar (Salesman), Shri Manish Sharma (Salesman), Shri Dalip (Peon) and Shri Sahil Goel and there was one Driver for Vehicle No. 3443, which is evident from the details furnished by the assessee before the A.O. and the Ld. CIT(A) i.e; copies of the ledger account which are placed at page no. 22 & 23 of the assessee’s paper book. In our opinion the disallowance made by the A.O. and sustained by the CIT(A) on this basis that only two persons were stated to be employed in the statement during the course of search was not justified particularly when the assessee mentioned the names of the persons who were regularly employed, in its ledger account. In the present case, the books were accepted by the A.O., therefore, when the books of accounts were accepted which clearly show the name of the persons to whom monthly salary was paid total of which for the year under consideration was at ₹ 3,46,000/- then the disallowance made by the A.O. and sustained by the Ld. CIT(A) was not justified. Accordingly the same is deleted.
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