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2018 (9) TMI 962 - ITAT DELHIAddition on account of trading result - enhancing the gross profit rate - Held that:- There is no substantial fall in the GP rate and the same has been increasing continuously. We also note that nothing specific has been brought on record by the Assessing Officer before making addition of extra 2% on account of GP rate. The Assessing Officer has not given any reasons for enhancing the gross profit rate except for mentioning that in the nature of business being carried on by the assessee, the net profit rate would vary between 5% and 7%. The method of accounting followed by the assessee was also being followed consistently since past many assessment years and financial results for the preceding assessment years were duly accepted by the department u/s 143(3) of the Act and no addition on account of difference in GP rate was made. It is apparent that this addition has been made merely on the basis of assumptions and guess work on the part of the Assessing Officer without bringing any cogent evidence on record - Decided in favour of assessee Addition on account of credit card expenses - CIT-A deleted the addition by observing that the Assessing Officer has not made any specific discussion or recorded any categorical finding regarding the credit card expenses - Held that:- Observation of the Ld. CIT (A) is correct. It is seen that the Assessing Officer has not pointed out even a single discrepancy in the details which were furnished before him by the assessee in respect of the credit card expenses. Therefore, in absence of any defect having been pointed out by the Assessing Officer, no disallowance could have been legally made. Therefore, we find no reason to interfere on this issue also and we uphold the order of the Ld. CIT (A) and dismiss the ground raised by the department. Addition on account of unconfirmed unsecured loans - Held that:- CIT (A) has given a categorical finding that the balance of ₹ 20,50,000/- pertains to unsecured loans which were brought forward from earlier assessment years and there was no transaction/s of raising fresh unsecured loans during the year under consideration. This fact is also verifiable from Form 3CD which has been filed by the assessee along with the tax audit report. The Ld. Sr. DR has also not been able to negate this factual finding of the Ld. CIT (A). Therefore, on facts, we find no reason to interfere on this issue - decided against revenue Ad hoc disallowance of salary, labour charges, repair and maintenance and staff welfare expense - Held that:- No personal element could be inferred to be involved in payment of salary and labour charges. It is also seen that the Assessing Officer has made the disallowance on the ground that the expenses remained unverifiable and that they may contain an element of personal nature. We are unable to agree with the findings of the Assessing Officer in this regard and agree with the observations of the Ld. CIT (A) that labour charges and salary expenses will not have an element of personal nature unless a specific finding has been recorded by the Assessing Officer in this regard. Therefore, we find ourselves in agreement with the Ld. CIT (A) on this issue also and we dismiss the ground raised by the department. There was no requirement on the part of the Ld. CIT (A) to call for a remand report from the Assessing Officer and we opine that the Ld. CIT (A) is entirely justified in proceeding to adjudicate the issues before him on the basis of facts which were before him and were also undisputedly before the Assessing Officer also. - Decided against revenue
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