TMI Blog2015 (6) TMI 929X X X X Extracts X X X X X X X X Extracts X X X X ..... )(b) has been rightly deleted as in original assessment proceedings also, the A.O. had made similar additions and Ld. CIT(A) had already deleted the same. Therefore, we do not find any infirmity in the order of Ld. CIT(A). - Decided in favour of assessee. - ITA No. 5129/Del/2013 - - - Dated:- 31-3-2015 - Diva Singh, JM And T. S. Kapoor, AM,JJ. For the Appellant : Dr BRR Kumar, Sr. DR For the Respondent : None ORDER Per T. S. Kapoor,AM. This is an appeal field by Revenue against the order of Ld. CIT(A) dated 05.06.2013 for Assessment Year 2006-07 wrongly mentioned in the appellate order as 2008-09. The grounds of appeal raised by Revenue are reproduced below: 1. Whether in the facts and circumstances of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e findings of Ld. CIT(A) and fairly admitted that the turnover reflected in the audited P L account was the actual net turnover exclusive of excise duty of ₹ 1,00,40,147/- and, therefore, he fairly conceded that the GP/NP cannot be applied to such part of turnover represented by excise duty. 4. We have heard rival parties and have gone through the material placed on record. We find that the assessee is engaged in the manufacturing and sale of items and automobile parts and the assessment was completed u/s 143(3) read with section 147 of the Act. The A.O. during assessment proceedings, on the basis of assessment order of Trade Tax Department, held that the sales of the assessee company were worth ₹ 7,44,66,277/- whereas the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the resultant income. It was also noted by the AO that the assessee had made payment of interest on unsecured loans to its family members in excess over the market rate by ₹ 1,42,352. Thus, this amount, which was disallowable under section 40A (2) (b) had escaped assessment. The assessee filed a letter seeking details as to how the amount of disallowance under section 40A (2) (b) had been worked out as it proposed to file objections to the issue of the notice under section 148. In response, the AO issued a letter dated 16.11.2010 which merely reiterated the reasons recorded for the reopening of assessment proceedings and failed to address the specific querry of the assessee. An elaborate letter dated 26.11.2010 was filed by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... offer was also made to the AO to have the books of accounts for the year under consideration examined. As regards the alleged excessive payment of interest, it was pointed out that the details thereof sought earlier had not been provided. It was pointed out that the disallowance of ₹ 68,736 made under section 40A (2) (b) made in the original assessment order had since been deleted by the CIT (Appeal). It was pointed out that in view of the above, the reasons recorded and the issuance/service of notice under section 148 was bad in law and that proceedings deserve to be dropped. Without prejudice, it was stated that there was no case either for any suppression of sales or for disallowance under section 40A (2) (b) of the Act. It has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d specifically in the response dated 26.11.2010, which has been acknowledged to have been received by the AO in the assessment order. Firstly, in response to the request of the assessee to provide details of how the alleged violation of section 40A (2) (b) had been worked out, the AO in his letter dated 16.11.2010, has given a reply in which he has obfuscated the issue. Even in the assessment order, the AO has not thought it necessary to provide any details with regard to the disallowance of ₹ 1,42,352/- and why Section 40A(2)(b) is applicable to the facts of the case. Secondly, the AO has failed to pass any order/address any letter to the assessee rejecting the objections to the issue of reassessment notice Thirdly, the AO did not fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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