New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (6) TMI 929 - ITAT DELHI

2015 (6) TMI 929 - ITAT DELHI - TMI - Reopening of assessment - addition to income applying G.P rate of 14.97% on the suppressed receipts - whether GP/NP cannot be applied to such part of turnover represented by excise duty.? - CIT(A) deleted addition - A.O. also made addition on account of provisions of Section 40A(2b) - Held that:- From the findings of Ld. CIT(A) we observe that Ld. CIT(A) has passed a well speaking, elaborate and reasoned order wherein he has made clear cut findings and has r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

M 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, the ld. CIT(Appeals) has erred in law in deleting the addition of ₹ 16,45,362/- while .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ition of ₹ 16,45,362/- without giving any explicit findings while accepting the assessee's version and in reaching the conclusion over the issue of addition of ₹ 16,45,362/- which was made by the A.O. after giving proper and sufficient opportunities of being heard over the issue & the tax audited ales of the assessee did not reflect netting of sales after excluding excise duty 3. That the appellant craves leave to add, modify and/or delete any ground(s) of appeal. 4. In the f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 proceed .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Ld. CIT(A) after going through the complete facts and circumstances of the case, allowed relief to the assessee by holding as under: "2.2 The relevant facts are that the original assessment for the year under consideration had been completed under scrutiny under section 143(3) vide order dated 26.12.2008. The addition made in this assessment order was subsequently deleted at the first appellate stage. On the issue of notice under section 148 and in compliance thereof, the assessee filed re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

₹ 7,44,66,277 whereas in the income tax, the assessee had declared sales of ₹ 6,44,26,130. The AO concluded that the assessee had suppressed the sales and 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 de .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

esting the issuance of the reassessment notice in general terms, the specific ground is taken by the AO for resorting to the reassessment proceedings were discussed in detail. As regards suppression of sales, it was stated that the turnover reflected in the audited trading and order is passed by the trade tax authorities had been filed along with the written submissions dated 31.10.2008 while justifying the acceptability of the declared trading results and the accounts. It was also pointed out t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of five invoices along with the relevant entries in cashbook/Ledger accounts of the parties in whose names the invoices had been raised, the sales tax account, the excise duty account etc. a reconciliation of the sale figures reflected in the profit and loss account with the sales assessed by the trade tax authorities was also provided. The breakup of the difference between the two figures was also provided. Further, an offer was also made to the AO to have the books of accounts for the year un .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 been stated that the AO, in gross violation of principles of natural justice, not controverted and the objections raised in the letter dated 26.11.2010, not even making a mention thereof proceeded to pass an assessment order making aggregate addition of ₹ 16,45,362/-. Even adopted the income assessee earlier at ₹ 9 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

acceptable to him. The AO has proceeded to pronounce his decision in utter disregard decision of the Honorable Supreme Court in the case of GLN Driveshaft (India) Ltd. (259 ITR 19) which states that where a notice of the assessment had been issued under section 148, the proper course of action for the assessee would be to file the return and, if he so desires, to seek reasons for issuing the notice. The assessing officer is bound to furnish reasons within a reasonable time. On the receipt of rea .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ven 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 find it necessary to address the objections to the initiation of reassessme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version