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2015 (7) TMI 207 - ITAT DELHI

2015 (7) TMI 207 - ITAT DELHI - TMI - Addition in the Trading Account - books of accounts not rejected - Held that:- In the present case, it is an admitted fact that the AO worked out the figures of sales by adding the Gross Profit in the figure of the sales shown by the assessee. However, he had not rejected the books of accounts and also accepted all other components of the Trading Account i.e. the opening & closing stock and the purchases & Gross Profit. He only doubted the sales figure which .....

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ng the provisions of section 145(3) of the Act nor pointed out any inflated purchase or suppressed sales. He also did not doubt the method of accounting consistently followed by the assessee, therefore, the impugned addition made by the AO and sustained by the ld. CIT(A) was not justified. Accordingly, the same is deleted. - Decided in favour of assessee.

Disallowance on account of TDS deducted from the supplies made - Held that:- In the present case, it appears that the assessee coul .....

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direct the AO to verify as to whether the total receipts of ₹ 77,78,724/- from the Railway had been included by the assessee in the gross sales and the TDS was wrongly deducted, if the aforesaid facts as claimed by the assessee were found to be correct then no addition is called for. Accordingly, this issue is set aside to the file of the AO. - Decided in favour of assessee for statistical purposes.

Disallowance out of interest paid to the partners - Held that:- In the present .....

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, the assessee claimed that no interest was paid to anyone except to the bank from whom loan was raised for the business purposes. However, it appears that the said fact was not examined by the AO or by the ld. CIT(A). We, therefore, in the absence of clear facts on record, deem it appropriate to set aside this issue also fact to the file of the AO to be adjudicated afresh in accordance with law, after providing due and reasonable opportunity of being heard to the assessee. - Decided in favour o .....

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ircumstances of the case and must be quashed. 2. That the learned Commissioner of Income Tax (Appeals) has erred in confirming an addition in the Trading Account of ₹ 13,57,633/-. 3. That the addition to the Trading Account, without assigning any significant defect in the Accounts and ignoring all the evidences produced by the assessee firm is absolutely unjustified and uncalled for and hence the addition may be deleted. 4. That the Commissioner of Income Tax (Appeals) has erred in confirm .....

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nts and, therefore, merely, because tax at source has been deducted by Railways, it does not become additional sale. 6. That the disallowance, out of Interest paid to partners amounting to ₹ 65,540/- is uncalled for and not in accordance with the provisions of the Income Tax Act and therefore the disallowance be deleted. 7. That the entire Books of Accounts, including Bills, excise records, sales tax records, etc. have been made available and the so-called difference in the sales, alleged .....

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therefore, these grounds do not require any comment on our part. 4. Vide Ground Nos. 2 to 4 the grievance of the assessee relates to the confirmation of Trading addition of ₹ 13,57,633/- made by the AO. 5. The facts related to this issue in brief are that the assessee filed ereturn of income on 30.09.2008 declaring loss of ₹ 12,19,664/- which was processed u/s 143(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act) on 06.06.2009. Later on, the case was selected for sc .....

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77; 13,57,633/- (Rs.2,43,00,296/- ₹ 2,29,42,663/-). 7. Being arrived the assessee carried the matter to the ld. CIT(A) and submitted that the AO made the addition on the basis of working of Gross Profit which was 5.69% and already included in the turnover of the assessee. It was further submitted that the books of accounts maintained by the assessee were audited, therefore, the addition made by the AO was not justified. The ld. CIT(A) after considering the submissions of the assessee obser .....

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in the sales and the AO added the same again to work out the imaginary figure of the sales. Therefore, the addition made by the AO and confirmed by the ld. CIT(A) was not justified. 9. In his rival submissions the ld. DR strongly supported the orders of the authorities below. 10. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is an admitted fact that the AO worked out the figures of sales by adding .....

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king out the figure of the sale. In our opinion the AO was not justified while adding the Gross Profit again in the sales already disclosed by the assessee and in making the impugned addition. In the present case, it is also noticed that the AO neither rejected the books of accounts by invoking the provisions of section 145(3) of the Act nor pointed out any inflated purchase or suppressed sales. He also did not doubt the method of accounting consistently followed by the assessee, therefore, the .....

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Railway, Hajipur from the contract receipt of ₹ 77,78,724/-. He was of the view that the assessee had claimed the credit of TDS amounting to ₹ 81,468/- without offering income of ₹ 77,78,724/-. He, therefore, disallowed the same and the addition to the income of the assessee. 13. Being arrived the assessee carried the matter to the ld. CIT(A) and submitted that the AO was not justified to make the disallowance of TDS credit. It was further submitted that the receipt from the Ea .....

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and loss account and had also failed to submit any details or any reconciliation to show whether the sales amounting to ₹ 2,29,42,663/- also included the receipt of ₹ 77,78,724/- against which the assessee had claimed the TDS credit of ₹ 81,468/-. Accordingly, the disallowance made by the AO was confirmed. 14. Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the Gross receipt .....

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ated 23.08.2011 regarding deduction of tax issued by the East Central Railway, Hajipur). It was accordingly submitted that the TDS which was wrongly deducted by the Railway was claimed by the assessee but there was no difference in the figures of the sales, as such the disallowance made by the AO was not justified and the ld. CIT(A) wrongly confirmed the same. 15. In his rival submissions the ld. DR supported the orders of the authorities below. 16. We have considered the submissions of both the .....

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was not considered by the AO as well as by the ld. CIT(A). We, therefore, deem it appropriate to remand this issue back to the file of the AO to be adjudicated afresh in accordance with law. We also direct the AO to verify as to whether the total receipts of ₹ 77,78,724/- from the Railway had been included by the assessee in the gross sales and the TDS was wrongly deducted, if the aforesaid facts as claimed by the assessee were found to be correct then no addition is called for. Accordingl .....

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amounting to ₹ 65,540/- on the debit balance of the partners by applying the rate of 15% and made the addition of ₹ 65,540/-. 18. Being aggrieved, the assessee carried the matter to the ld. CIT(A) and submitted that the assessee had the credit balance of ₹ 22,28,877/- in the capital account in the balance sheet and had shown loss of ₹ 12,26,144/- in the debit side of the balance sheet. It was further submitted that the partners had not overdrawn any money from the firm. T .....

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Total 22,08,021/- 22,28,877/- 19. the ld. CIT(A) after considering the submissions of the assessee observed that the assessee did not submit the full capital account of the partners even though the same was specifically asked, so it was difficult to understand as to why the assessee had not apportioned the loss to the partners of the firm and had not reduced the credit balance of the partners in the respective capital accounts which would have given a clear balance sheet about the net of the ca .....

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cture of the balance sheet about the creditworthiness of the assessee firm for the purpose of taking loans from the bank. The ld. CIT(A) held that the assessee was not maintaining the books of accounts in a proper manner and the same were not reliable. He also observed that it was apparent that if the assessee had apportioned the loss to the capital account of the respective partners, there would have been debit balance in the case of partner s capital account and as such the AO was justified to .....

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