TMI Blog2002 (8) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) reduced the addition to Rs. 1,18,000. The AO had discussed this issue at pp. 1 2 of his order. During the course of survey proceedings various defects, e.g., some of the expenses were found to have been incurred which were not recorded in the books of account and payments made as per petty cash books were not reflected in the regular books of account, were found. During the course of survey proceedings trading accounts as on 17th Sept., 1991, was got prepared which gave G.P. rate of 17.99 per cent. During the year under consideration the assessee has shown sales of Rs. 45,88,027 with G.P. of Rs. 6,32,030, giving a G.P. rate of 13.77 per cent as against G.P. rate of 16.19 per cent in the immediate preceding year. 6. In view of the above, the AO applied G.P. rate of 17.99 per cent on total sales of Rs. 45,88,027 which gave G.P. of Rs. 8,25,386 as against Rs. 6,32,030 shown by the assessee. This has resulted in an addition of Rs. 1,93,356. 7. The CIT(A) had discussed this issue at pp. 3 4 of his order. On going through the details filed by the appellant and the revised working of trading account as on 17th Sept., 1991, given by the appellant, the CIT(A) found that the G.P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the loose papers but were not accounted in the books of accounts. Similarly various payments were shown in petty cash book but these were not reflected in the regular books of accounts. (ii) On p. 4, he has mentioned that on perusal of the details mentioned on loose papers found during the course of survey proceedings, it was transpired that the assessee has not accounted for the following items of expenditure. He made the addition in respect of such expenditure. (iii) On p. 7 (last but one para) he has again referred to certain unaccounted expenditure found written in the petty cash book. On perusal of the assessment order, the AO has nowhere mentioned that any of the receipt found recorded in loose papers, etc. has not been recorded in the books of accounts. Therefore, the findings given by the learned CIT(A) is incorrect and without any basis. The enhancement of turnover from Rs. 45,88,028 and its estimation at Rs. 50,00,000 is, therefore, not justified. 13. Even the AO has not enhanced the turnover of the assessee. The AO after examining each and every loose paper has made the estimation of profit by taking the turnover at Rs. 45,88,028 as disclosed by the assessee on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account of loose papers found for expenses incurred. In this case the assessee has agitated against sustenance of addition whereas the Revenue has agitated against partial deletion of addition. 18. From the loose papers, the AO found that certain items of expenditure were not recorded in the regular books of account. So the expenditure was treated to be out of books from undisclosed sources and was added to the total income which resulted in an addition of Rs. 50,658 on this account. 19. After having considered the explanation furnished by the learned authorised representative of the assessee in respect of each and every entry, the CIT(A) has sustained the addition only to the tune of Rs. 25,431 (9,592 + 14,323 + 889 + 333). The correct amount should be Rs. 25,137. 20. We find that the CIT(A), after considering the explanation furnished by the learned authorised Representative, has come to the conclusion that the addition comes to Rs. 25,431. However, the learned authorised Representative has further explained that the learned CIT(A) had also erred in partly sustaining this addition. The learned authorised Representative has made the following submissions: 21. Rs. 9,592 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il figure. The learned authorised representative has rightly placed reliance on the order of Tribunal, Patna Bench, in the case of Nishan Housing Development (P) Ltd. vs. Asstt. CIT. As this case is not covered by the amendment made from 1st day of April, 1999, the addition of Rs. 9,592 is hereby deleted. 27. As regards addition of Rs. 14,323, a perusal of p. 18 of the paper book shows certain receipt at left hand side and expenditure of Rs. 14,323.25 at right hand side. Therefore, no addition is called for on this account. Consequently if addition is made for unexplained expenditure under s. 69C, the deduction of the same will be allowed under s. 37(1) of the Act. Therefore, the addition of Rs. 14,323 sustained by the learned CIT(A) is deleted. 28. As regards addition of Rs. 889 and Rs. 333 the learned CIT(A) has rightly sustained the addition as the assessee has not been able to show as to how this expenditure covered by drawings of the assessee. This disposes of ground No. 2 of the assessee s appeal and ground No. (i) of the Revenue s appeal. 29. Ground No. 3 of the assessee s appeal: Disallowance of Rs. 13,800 (rate difference), Rs. 5,000 (telephone expenses), Rs. 7,292 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition of Rs. 41,000 on account of deposit in the name of Shri S.K. Lodha We have heard the rival parties. We have also perused the record. The learned counsel has argued that Rs. 41,000 has been credited in the name of Shri S.K. Lodha and his account had been debited by Rs. 50,000. So this was only adjustment entry with net effect of Rs. 9,000 only. 37. The learned CIT(A) held that the assessee did not have valid and satisfactory explanation for the source of deposit of Rs. 41,000. No evidence or material had been brought on record to show that Rs. 41,000 deposited on 17th May, 1991, was given out of explained source of income. 38. A perusal of the paper book shows payment side of cash book dt. 17th May, 1991 and shows receipt side of cash book for the same date. Payment side shows that an amount of Rs. 50,000 has been paid (being cash paid to RFC on behalf of Shri Lodha) on behalf of Sanjeev Kumar Lodha and receipt side shows that an amount of Rs. 41,000 has been received from the assessee. In this view of the matter, no benefit can be given to the assessee. We, therefore, decline to interfere with the order of the learned CIT(A). 39. Ground No. (iii) of the Revenue s appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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