TMI Blog2014 (4) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... merely because the assessee did not maintain certain details on the computer was no ground for rejecting the explanation given by the assessee – thus, the order of the Tribunal is upheld – Decided against Revenue. Disallowance of job charges paid – Held that:- The Tribunal rightly held that merely because initially there was a discrepancy, was no ground to make the addition once the assessee had explained the discrepancy in the books of account - the AO had not made proper investigation in the matter0 thus, it could not be said that the assessee had inflated the job charges – the order of the Tribunal is upheld – Decided against Revenue. Addition of salary expenses – Held that:- Tribunal found that the profit ratio of the assessee wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenged the order dated 18.08.2011 made by the Income Tax Appellate Tribunal, Ahmedabad Bench C in ITA No.1687/Ahd/2010 (hereinafter referred to as 'the Tribunal') by proposing the following questions: (A) Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs. 18,44,422/-made on account of unaccounted sales? (B) Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs. 14,40,866/-made on account of under valuation of closing stock of finished goods? (C) Whether the Appellate Tribunal is right in law and on facts in deleting the addition of Rs. 5,55,270/-made on account of job charges? (D) Whether the Appellate Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,50,000/- 3. The assessee went in appeal to the Commissioner (Appeals) who dismissed the appeal and confirmed the additions made by the Assessing Officer. The assessee carried the matter in further appeal before the Tribunal and partly succeeded. 4. The Assessing Officer firstly verified the correctness of the books of account maintained by the assessee. After discussing a number of glaring mistakes, he rejected the books of account Such rejection of the books of account was not contested by the assessee. The Assessing Officer, however, made further additions by relying upon the same books of account which had been rejected by him. The Tribunal was of the view that the Assessing Officer, once having rejected t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was valued at Rs.32,02,496/- and accordingly the per metre cost of the closing stock of finished goods worked out to Rs.32.25 per metre. As against this, the Assessing Officer observed that the average sale rate of the assessee was Rs.52.39 per metre and reducing the GP rate @ 10.75 therefrom, worked out the cost at Rs.46.76 per metre. The Commissioner (Appeals) found that the assessee had maintained his books of account on computer whereas the item-wise details of closing stock had been prepared manually. Noting that the assessee had not maintained item-wise inventory record which could be obtained from computerized books of account, he confirmed the additions. On behalf of the assessee reference was made to the details of bifurcatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer as confirmed by the Commissioner (Appeals), that the assessee had inflated the job charges. 8. Insofar as proposed question [D] which pertains to addition on account of salary expenses is concerned, there was a difference of Rs.1,50,000/- in the audit report and the ledger account in respect of salary expenses. The Tribunal found that the assessee had explained that the mistakes were inadvertent which had been subsequently rectified. 9. In relation to the above grounds, the Tribunal, however, took note of the fact that the Assessing Officer had rejected the books of account, and as such was of the view that the some reasonable addition was required to be made by enhancing the profit of the assessee. The Tribunal found that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the summons to the creditor, Mr. Prem Ratan Sharma, he had responded to the same and filed reply before the Assessing Officer directly confirming the loan to the assessee which was shown in his balance sheet as well as shown to the Revenue Department. It was also noted that the Assessing Officer did not ask the assessee to produce the creditor for examining him nor did he bring any evidence on record that the cash deposits in the bank account of the creditor came from the side of the assessee. Similar was the case in respect of the loan taken from Mr. Kishanlal Sharma, who also had filed return of income and shown the deposit given to the assessee in his balance sheet which were shown to the Revenue Department and the assessee had deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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