9911796707
TMI Blog2012 (7) TMI 363X X X X Extracts X X X X X X X X Extracts X X X X ..... " 2.1 The assessee preferred the appeal on the following grounds : "1. That on the facts and on the circumstances of the case the CIT(A) had grossly erred in not appreciating the fact that M/s. Sanjay Pandey and Rajeev Pandey are separate and distinct entities that from the appellant, having separate PAN numbers, filing Income Tax Returns separately and accordingly had grossly erred in not canceling the action of the AO in clubbing the purchases of both the entities in the hands of the appellant estimating the sales of both the entities in the hands of the appellant. Such action of the CIT(A) in upholding the action of the AO is bad in law, illegal and ab initio void and is subjected to be cancelled / quashed/set aside. 2. Without prejudice to the validity and the legality of the action of the CIT(A), as referred to in ground No. 1 above, the CIT(A) had grossly erred in restricting the Net Profit at Rs.3,00,000/- on mere surmise, conjectures assumptions and presumption. Even otherwise and without prejudice, the said addition of Rs.3,00,000/- is highly excessive and wholly unreasonable." 3. We have heard the ld. representatives of both the parties and perused the orders of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Jaiswal Wine, Kanpur M/s. Jaiswal Wine, Kanpur 17,55,310 For Lal Darwaja Shop 18,43,470 35,98,780 4.1 Thus, total purchases made by the assessee from the above parties come to Rs.67,84,804/-. Further, statutory notices were issued to the assessee and the counsel for the assessee filed reply along with purchase bills of wine and copy of the insurance receipts and he was further required to produce the details as required earlier. But the assessee did not again produce the required details. The AO, therefore, noted that the assessee has shown sales of Rs.39,51,312/- as against purchase of Rs.31,31,384/- in his trading account. Thus, the assessee has shown purchase of Rs.31,31,384/- instead of purchase of Rs.67,84,804/-. The letter was written to the assessee to clarify the above position and the assessee was required to give the explanation on the same details furnished by the above two parties for purchases made by the assessee and further explanation was called for as to why the assessee has not shown full purchase in the trading account and as to why recasted trading account should not be prepared in the case of assessee. No complian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should be excluded for estimating the profit. The matter was remanded by the ld. CIT(A) to the AO who submitted his report dated 19.02.2008, which is also incorporated in the appellate order, in which the AO reiterated the stand taken in the assessment order and it was further explained that information of U.P. Excise Inspector, Farrukhabad in respect of the license fee paid by the assessee was also called for. The Inspector's report was placed on record. As per reply, the assessee has paid Rs.3,00,000/- each as license fees for Avas Vikas Shop and Lal Darwaja Shop respectively for the F.Y. 2003-04 relevant to the assessment year under appeal. It was mentioned in the remand report that the assessee has also claimed the license fees of Rs.6,00,300/- in the profit and loss account submitted before arriving at the profit of Rs.10,51,812/-. It was, therefore, made clear that the assessee was owner of both the shops, i.e., Avas Vikas Colony shop and Lal Darwaja Shop. Therefore, the purchases of both the concerns have been rightly taken into consideration in the case of the assessee. The AO has also emphasized that during the assessment proceedings, nowhere, the assessee has claimed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rajiv Kumar Pandey (having PAN, Insurance & even I.T. Return); all these were concocted and tried-tobe- correlated, only after appellant was caught on wrong foot during assessment proceedings. These evidences are dated after the assessment was finalized. So, I hold that appellant was running business at Lal Darwaja, in his proprietary capacity, but tried to hide it till enquiry u/s 133(6) revealed the truth. Neither there is only application in name of such AOP, nor any final allotment letter of DM is there, as to show that allotment was made, not to appellant individual, but to an AOP, having appellant as a partner/co-owner. 6.3. Is AO correct in adding and estimating the business of two shops? Considering that both the shops were operated/owned by assessee, and considering that appellant failed to furnish relevant details, as required by AO. Thus, in principal, AO was fully justified in estimating and adding the two shops' business activities and profits. 6.4. But is estimation justified ? However, I do find lot of substance in appellant's contention that - (a) there are certain typing errors in sale figures Rs. 15,94,459 (page 2 of assessment order) Versus Rs. 10,03,606/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases made by the assessee from two parties, M/s. Deep Wines and Jaiswal Wines Kanpur and they have affirmed that the assessee made purchases from them in a sum of Rs.67,84,804/- during the financial year relevant to the assessment year. Complete details were called for from the assessee by confronting the details obtained from these parties, but the assessee did not make any compliance to the statutory notices. However, it was found that there was a mistake in total purchase because the total purchases are in a sum of Rs.61,93,951/- instead of Rs.67,84,804/-. The AO, accordingly, proportionately estimated the sales by recasting the trading and profit and loss account. The assessee claimed in the profit and loss account, payment of license fees of Rs.6,00,000/- which was paid for both the concerns. The report of the Excise Inspector was also obtained to the same effect, in which it was confirmed that the assessee has paid Rs.3,00,000/- each as license fees for Avas Vikas Shop and Lal Darwaja shop for the assessment year under appeals. The assessee also claimed deduction of total license fees of both the concerns in the profit and loss account. Therefore, from the conduct of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
