Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (10) TMI 1061 - AT - Income TaxAddition relating to making charges and wastage claims - assessee is engaged in the business of manufacture and sale/export of gold jewellery - search officials noticed that the assessee has maintained quantity records in an excel sheet, which was akin to parallel books - AO took the view that the entries found in the seized document is the correct one and accordingly took the view that the jewellery making charges and wastage claim have been recorded in excess in the books of account - HELD THAT:- We notice that identical additions were made in the assessee’s group concern named M/s Saurav Jewellers Pvt Ltd and they have been deleted by the coordinate bench [2022 (11) TMI 124 - ITAT MUMBAI] on a detailed reasoning. We notice that the co-ordinate bench has accepted the contentions of the assessee that the Excel Sheets cannot be considered as parallel books of account and they are merely controlling sheets maintained by employees for computation of jewellery after giving credit or deduction for standard quota of wastage - Since the facts and circumstances relating to both these additions are same in these cases also, following the above said decision of the co-ordinate bench, we modify the orders passed by Ld CIT(A) and direct the assessing officer to delete the additions relating to Making Charges and Wastage claims in all the years under consideration. Addition on account of profit on unrecorded sales - CIT(A) has deleted above addition - HELD THAT:- We notice that the Ld CIT(A) has also noticed many discrepancies in the Excel Sheet. One of the main discrepancies is that the manufacture and sale of medallions and coins were not recorded in the Excel Sheets, which would make huge difference. Besides the above, the search officials did not find any discrepancy between book stock and physical stock. Accordingly, we are of the view that the order passed by ld CIT(A) in deleting this addition is a well reasoned order and the same does not call for any interference. Accordingly, we uphold the order passed by Ld CIT(A) on this issue. Addition u/s 68 - whether AO could have made addition u/s 68 by relying upon report of investigation wing or the statement given by the alleged accommodation entry providers? - HELD THAT:- Hon’ble Bombay High Court has held in the case of CIT vs. Orchid Industries (P) Ltd [2017 (7) TMI 613 - BOMBAY HIGH COURT] that the addition u/s 68 could not be made once the assessee had produced the documents to prove the cash credits. It was further held that non-appearance of the share subscriber before the AO will not change this position. It is also apt to refer to the decision rendered in the case of PCIT vs. Paradise Inland Shipping (P) Ltd [2017 (11) TMI 1554 - BOMBAY HIGH COURT] Accordingly, following the above said decision, we hold that the additions made by AO u/s 68 in all the years, in the facts and circumstances of the case, were not justified. We noticed earlier that some of the cash credits were received in the earlier year and not during the year under consideration. Accordingly, we confirm the relief granted by Ld CIT(A) for the reasons discussed above and set aside the decisions rendered by the learned CIT(A) in confirming the addition in these years. Accordingly, we direct the AO to delete the additions made under section 68 of the Act in all the years under consideration. Disallowance made u/s 14A - AO noticed that the assessee has held investments, whose income will be exempt. Since the assessee did not make any disallowance u/s 14A and AO computed disallowance u/s 14A of the Act by applying provisions of Rule 8D(2)(iii) of I T Rules towards administrative expenses - HELD THAT:- As in the case of M/s Marg Limited [2020 (10) TMI 102 - MADRAS HIGH COURT] has held that the disallowance u/s 14A cannot exceed exempt income. We notice the decision rendered by Ld CIT(A) finds support from the above said decision of Hon’ble Madras High Court. Accordingly, we do not find any infirmity in the decision so rendered by Ld CIT(A) on this issue in AY 2014-15 and 2015-16. Appeals of the assessee are allowed and all the appeals of the revenue are dismissed.
|