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Assistant Commissioner of Income Tax Versus Shri Banarasi Dass, L/h Late Smt. Saroj Rani Prop. M/s Shiv Shakti Sarees And Vica-Versa

2015 (11) TMI 488 - ITAT DELHI

GP addition - addition was partly sustained by the learned CIT(A) by applying a GP rate of 10% as against 9.67% declared by the assessee and thereby confirming the part addition - Held that:- CIT(A) has passed a well-reasoned order in this case. He has considered the history of the assessee for the relevant year and past two assessment years and has applied a GP rate of 10% as against the GP rate of 12% applied by the Assessing Officer. The assessee was able to declare higher sales at ₹ 3. .....

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f rent paid - Held that:- Assessee has paid the rent of ₹ 60,000/- for the business premises for the whole year as against the rent amount of ₹ 30,000/- paid for the same premises in the immediately preceding year. In reply to a specific query from the Bench, learned counsel for the assessee submitted that the rent was revised after more than five years during the relevant period. The Revenue could not controvert the submissions of the assessee that the fair market rent of the busine .....

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said to be excessive and accordingly is confirmed - Decided against assessee.

Disallowance of car expenses and car depreciation at 15% of the total expenses and depreciation claimed by the assessee could not be said to be excessive

Unexplained trade creditors - CIT(A) deleted the addition - Held that:- Since the balances were on account of purchases made in the normal course of business by the assessee and payments were made through account payee cheques and the assessee w .....

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for making the addition.- Decided in favour of assessee. - ITA No. 4986/Del/2012, ITA No. 5204/Del/2012 - Dated:- 12-10-2015 - Shri G. C. Gupta, Vice President And Shri Om Prakash Kant, Accountant Member For the Petitioner : Shri Sujit Kumar, Senior DR For the Respondent : Shri Akarsh Garg, CA ORDER Per G. C. Gupta, VP These appeals by the assessee and the Revenue for the assessment year 2009-10 are directed against the order of learned CIT(A), Muzaffarnagar dated 27th June, 2012. These are bein .....

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and therefore the ld.CIT(Appeals) was wholly unjustified in applying the GP rate of 10% (as against 12% by Assessing Officer) instead of 9.67% declared by the appellant. 1.2 Because the application of GP rate of 10% by the learned CIT(Appeals) as against 12% by the Assessing Officer is also wholly arbitrary being not based on any material and therefore partial addition sustained of ₹ 1,03,270/- is contrary to facts and law. 3. Learned counsel for the assessee submitted that the GP additio .....

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ile determining the GP addition in this case. He submitted that during the year, the assessee has declared higher sales of ₹ 3.12 crores and the GP rate of 8.23% as against the sales of ₹ 2.05 crores and GP rate of 8.30% in the immediately preceding year. He submitted that there was no valid reason for sustaining any GP addition in this case. 4. Learned DR has opposed the submissions of the learned counsel for the assessee. He submitted that it was a survey case and the accounts were .....

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the relevant year and past two assessment years and has applied a GP rate of 10% as against the GP rate of 12% applied by the Assessing Officer. The assessee was able to declare higher sales at ₹ 3.12 crores during the relevant period as against ₹ 2.05 crores in the immediately preceding year with almost same rate of GP as compared to the last year. Learned CIT(A) has rightly allowed credit of ₹ 4.50 lakhs amount surrendered by the assessee during the course of survey and has .....

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he business premises was enhanced from ₹ 30,000/- to ₹ 60,000/- during the year although the market rent was still more. Learned DR has relied on the order of the Assessing Officer. 8. We have considered the rival submissions and have perused the order of the Assessing Officer and learned CIT(A). We find that the assessee has paid the rent of ₹ 60,000/- for the business premises for the whole year as against the rent amount of ₹ 30,000/- paid for the same premises in the .....

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unt of rent paid and the addition made is deleted and ground No.2 of the assessee s appeal is allowed. 9. Ground No.3 of the assessee s appeal is as under:- Because the customer welfare expenses of ₹ 42,536/- were incurred wholly and exclusively for the purpose of business and therefore the ld.CIT(Appeals) has erred in law and on facts in confirming disallowance of ₹ 6,400/-. 10. We have heard the parties. We find that the learned CIT(A) has confirmed the disallowance of ₹ 6,40 .....

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sonal us, amounting to ₹ 21,000/- is highly excessive and keeping in view of the overall facts of the case the ld.CIT(Appeals) should have restricted the same to maximum 10%. 12. We have heard the parties. We find that the disallowance of car expenses and car depreciation at 15% of the total expenses and depreciation claimed by the assessee could not be said to be excessive and therefore, there being no merit in the ground of appeal No.4 of the assessee, the same is dismissed. 13. Ground N .....

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not fully vouched and the assessee conceded before the Assessing Officer that no vouchers were maintained and that assessee also failed to furnish details of persons, purpose and place of travel. In these facts, we hold that the disallowance was rightly sustained and therefore, the order of learned CIT(A) on this issue is confirmed. Ground No.5 is accordingly dismissed. 15. Ground No.6 reads as under:- Because the generator and repair expenses totaling ₹ 99,915/- were incurred wholly and e .....

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stification for interfering in the order of learned CIT(A) on this count, the same is confirmed and ground No.6 of the assessee s appeal is dismissed. 17. Ground No.7 of the assessee s appeal is as under:- Because sales promotion expenses of ₹ 48,300/-, shop expenses 65,428/-, packing expenses 49143/-, office expenses ₹ 47015/-, totaling ₹ 2,09,886/- were incurred wholly and exclusively for the purpose of business and therefore the ld.CIT(Appeals) has erred in law and on facts .....

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nterference. Accordingly, the order of learned CIT(A) on this issue is confirmed and ground No.7 of the assessee s appeal is dismissed. 19. Ground No.8 & 8.1 of the assessee s appeal read as under:- 8. Because the interest paid @ 15% to the family members was very reasonable and therefore the learned CIT(Appeals) was not justified in confirming the allowable interest rate @ 12% and thereby confirming the addition of ₹ 114315/-. 8.1 Because keeping in view of the facts of the case the l .....

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tion for paying higher rate of interest at 15% to the family members of the assessee. 21. We have considered the rival submissions and have perused the order of the Assessing Officer and learned CIT(A). We find that the rate of interest at 15% paid to the family members of the assessee could not be called excessive and seems to be reasonable. The case pertains to the assessment year 2009-10 and considering the prevailing market rate of lending, we are of the view that the interest paid at the ra .....

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Gross Profit by applying the GP rate of 10^ as against 12% applied by the Assessing Officer by ignoring the fact that in the case of Smt. Amrit Rani Prop. M/s Niranjan Dass & Sons, GP was shown @ 16.46% during the relevant accounting period and in the case of Bhagat Ram Godha Ram, Punjabi Market, Saharanpur, GP was shown @ 12.30%. 23. Learned DR has relied on the order of the Assessing Officer. Learned counsel for the assessee has relied on the order of learned CIT(A). 24. We have heard the .....

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dingly, we hold that there is no merit in ground No.1 of the Revenue s appeal, which is dismissed. 25. Ground No.2 reads as under:- On the facts and in the circumstances of the case, the CIT(A) has erred in law in deleting the disallowance of ₹ 1,51,116/- out of ₹ 2,59,998/- made by the Assessing Officer on account of various expenses by ignoring the fact that these expenses were either excessive or fully unvouched and unverifiable. 26. Learned DR has relied on the order of the Asses .....

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nd ground No.2 of the Revenue s appeal is dismissed. 28. Ground No.3 of the Revenue s appeal is as under:- On the facts and in the circumstances of the case, the CIT(A) has erred in law in deleting the addition of ₹ 10,72,891/- made by the Assessing Officer on account of unexplained trade creditors by ignoring the fact that the letters issued by the Assessing Officer were received back un-served, which makes it clear that the trade creditors were not genuine. Whereas the replies/confirmati .....

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6,24,082/- and not ₹ 10,72,891/- as mentioned by the Revenue in its ground of appeal. He submitted that all the amounts were received by cheque and learned CIT(A) has called for the remand report which was duly submitted by the Assessing Officer. A copy of the remand report has been filed in the compilation before the Tribunal. 30. We have considered the rival submissions and have perused the order of the Assessing Officer and learned CIT(A). We find that the correct amount of trade credit .....

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made through account payee cheques. The assessee has explained that bills and goods received notes were available on record to prove the genuineness of the creditors. The creditor parties have sent their confirmation letters to the Assessing Officer and the learned CIT(A) has recorded that the Assessing Officer in the remand report dated 18.09.2012 has also confirmed this fact and no defects in the confirmation of accounts of the aforesaid creditors have been pointed out by the Assessing Office .....

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