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The Dy. CIT, Circle-2, Surat Versus M/s. Ujjawal Fabrics

2016 (1) TMI 406 - ITAT AHMEDABAD

Addition on account of disallowance of non-genuine brokerage expenses - CIT(A) deleted the addition - Held that:- CIT(A) is not controverted by the Revenue by placing any material on record suggesting that the payments paid by the assessee were bogus. In absence of such material establishing that the payments were not genuine or bogus, we do not see any reason to interfere with the finding of the ld.CIT(A), same is hereby upheld. - Decided against revenue.

Addition u/s.68 - CIT(A) del .....

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ties below, therefore, in our considered view, the AO was not justified in making the addition and disallowance of interest thereof. Therefore, we do not see any reason to interfere with the finding of the ld.CIT(A), same is hereby upheld.- Decided against revenue.

Addition on account of alleged excess claim of shortage - CIT(A) deleted the addition - Held that:- There is no dispute with regard to the fact that the AO has not pointed out any specific defects in the books of account. T .....

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gard to yield. Under these facts, we do not see any reason to interfere with the finding of the ld.CIT(A), same is hereby upheld.- Decided against revenue.

Addition made u/s.69B - CIT(A) deleted the addition - Held that:- We find that the AO has given finding that there was a difference between the quantity of stock furnished to its Banker and shown to the Revenue. The only question left with us is whether the information furnished to the Banker by the assessee was correct or not. The .....

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nt but the quantity matches. Therefore, we hereby set aside the finding of the ld.CIT(A) on this issue and sustain the addition made by the AO.- Decided in favour of revenue. - I.T.A. No.2792/Ahd/2012 - Dated:- 21-10-2015 - SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER And SHRI KUL BHARAT, JUDICIAL MEMBER For The Appellant : Shri D.C. Mishra, Sr.DR For The Respondent : Shri S.N. Soparkar, AR ORDER PER SHRI KUL BHARAT, JUDICIAL MEMBER : This appeal by the Revenue is directed against the order of the Ld.Co .....

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ing bill No. of the corresponding sale [2] On the facts and circumstance of the case and in law, the Ld. CIT(A) has erred in deleting the addition of Rs.l3,00,000/-made u/s 68 and disallowance of interest expenses on that of ₹ 52,142/- without appreciating the fact that the assessee failed to prove the identity and genuineness of the transaction with sufficient documents and the information/signature of the lender party given were different. [3] On the facts and circumstance of the case an .....

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te of the fact that there was a huge difference between book stock and the stock given to the Bank, which the assessee was not able to explain satisfactorily. [5] On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing Officer. [6] It is, therefore, prayed that the order of the CIT(A) may be setside and that of Assessing Officer may be restored to the above extent. 2. Briefly stated facts are that the case of the assessee was picked up fo .....

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and disallowance of interest expense paid of ₹ 52,142/-, hence total addition was made of ₹ 82,79,078/-. The assessee being aggrieved by the assessment order, preferred an appeal before the ld.CIT(A), who after considering the submissions of the assessee allowed the appeal. Aggrieved by the order of the ld.CIT(A), the Revenue is further in appeal before us. 3. First ground of appeal is against deletion of ₹ 20,90,908/-. The ld.Sr.DR supported the order of the AO and reiterated .....

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f ₹ 21,03,552/- was paid and no bill number has been mentioned and the persons to whom commission had been paid were mutually related to each other and related to assessee and these persons were not those whose names appeared in the rest of the months. It was noticed that except in case of G.D.Enterprise, Commission of last year, i.e. AY 2007- 08 was paid in next year and in half of case after 3 to 6 moths and in some case even after 9 months. He contended that in brokerage business as soo .....

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nd TDS of such payments has been deducted as per law. 4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that the ld.CIT(A) has given finding on fact in para-2.3 of his order by observing as under:- 2.3. … . All these grounds taken by AO are very flimsy and superficial grounds. Without making any investigation or without identifying any defect in the books of account and bills or vouchers, conclusi .....

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s and all other required details have been filed by appellant during assessment proceedings as well as appellate proceedings which justify the claim of appellant that the commission expenses re genuine and incurred for business purposes. In such situation, there is no justification in disallowance made by AO, therefore, I delete the addition of ₹ 20,90,908/- and allow the group of appeal. 4.1. The above finding of the ld.CIT(A) is not controverted by the Revenue by placing any material on .....

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r.DR vehemently argued and reiterated the submissions as were made in the statement of facts. The ld.Sr.DR submitted that the ld.CIT(A) failed to appreciate the fact that the address on confirmation given by the party and in copy of return is different and also the signature in confirmation and signature in copy of his return provided is different. He submitted that in the absence of computation of income and merely submission of copy of return do not serve any purpose. 5.1. On the contrary, the .....

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ntaining complete address and PAN, copy of acknowledgement of return and copy of bank statement issued by banker of the creditor reflecting that loan was given by creditor by account payee cheque, during the assessment proceeding. It was further submitted that the said creditor is assessed to Income Tax in the same Range-2 in which appellant is assessed and has shown total income around R.5 lakhs for the year under consideration. The AO could have easily examined the facts related to creditor fr .....

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ined. The facts related to address, signature, etc. could have easily verified by him from the record of his own office were appellant as well as creditor both are assessed. He has not been able to find any defect or ingenuineness in the evidences given by appellant which prove the identity of the creditor, capacity of providing loan and genuineness of transaction. Identity and capacity of the creditor is proved by return of income filed and genuineness of transaction is also proved by filing th .....

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assessed to tax and the entire records were available to verify the same. Therefore, the AO treated the same as unexplained amount on the basis of superficial reasons. The ld.CIT(A) has given finding on fact that the loan is genuine, supporting evidences with regard to the identity of the creditor in the form of Income Tax Return, etc. was furnished to the authorities below, therefore, in our considered view, the AO was not justified in making the addition and disallowance of interest thereof. .....

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er in AY 2007- 08. As per the AO, the yield for the year under appeal was 79.86% while that in previous year, it was 81.64%. It was observed by the AO that in the textile mill processing, there is normal shortage of 15 to 17% while assessee has shown shortage of 20.14%. On this basis, the AO proceeded to make the addition. Therefore, he submitted that the ld.CIT(A) was not justified in deleting the addition. 6.1. On the contrary, the ld.counsel for the assessee submitted that the ld.CIT(A) was j .....

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e considered the facts of the case and found that as earlier two additions, this addition is also made by AO on very weak grounds. The basis given by AO for making disallowance that shortage of goods on account of job workers is not an acceptable theory, higher shortage leads to higher sale price of finished goods and only sample bills were produced by appellant, are again superficial and flimsy grounds. As per chart given in the submissions, appellant has shown better results in the form of tur .....

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ch details is not made clear by AO. Such details are not confronted to appellant which is clearly violation of natural justice. Why only 2% of shortage has been disallowed, it is not made clear by AO. The major part of job work has been carried out by outside parties to whom payments have been made according to quality and quantity produced by them and in this respect all the relevant documents have been maintained by assessee and in these details no defect could be found by AO. Simply by saying .....

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e ground of appeal. 7.1. There is no dispute with regard to the fact that the AO has not pointed out any specific defects in the books of account. The AO has also not resorted to the rejection of books of account, however, he made estimation on the basis that the yield as declared in earlier year which was higher than as claimed in the year under appeal. The basis of such finding as per AO is that normally in textile mill processing, there is percentage of shortage at 15 to 17% in the yield. The .....

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ld.CIT(A) was not justified in deleting the addition. The ld.Sr.DR submitted that the explanation of the assessee with regard to the difference between the statement of stock as furnished to the Bank of Baroda and submitted to the Department was that the sale had taken place on 31/03/2010 at Kolkata Branch and the date was not available. He submitted that such a huge sale cannot be left by the assessee. 8.1. On the contrary, ld.counsel for the assessee supported the order of the ld.CIT(A) and s .....

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