TMI Blog2016 (4) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... hich indicate that he has satisfied himself about the other claims made in the P&L A/c. As seen from the P&L A/c, apart from purchases of ₹ 2,05,05,123/-, the other charges are (freight ₹ 1,93,185/-), salaries ₹ 1,80,000/- and other expenses ₹ 1,78,008/-. The major item of expenditure is only rates and taxes of ₹ 38,20,875/-. Therefore, it cannot be stated that AO did not examine this major item. Be that as it may, in our opinion, furnishing of proof in the course of assessment on record may not be required in all cases, when AO takes up the scrutiny for examining specific issues since the case has been selected under CASS system. May be that AO is constrained to examine only the issue on which scrutiny was tak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an income of ₹ 2,06,130/-. The case was selected for scrutiny under Computer Aided Scrutiny Selection [CASS] method for verifying the sources of cash deposits above the threshold limit in saving bank account. In the scrutiny assessment, since assessee has produced the savings bank A/c copies and explained that deposits are made from sale proceeds of IMFL and the corresponding withdrawals were utilized for business purposes, AO accepted them. Since assessee did not furnish the evidence in support of expenditure claimed, Assessing Officer (AO) disallowed round-sum amount of ₹ 3 Lakhs to the returned income. However, while making the addition in the computation of income, AO added an amount of ₹ 2,75,800/- only. 3. Ld. CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T. Since there is no representation, no order was also received by assessee. Subsequently, it was noticed that the order issued by the CIT was stated to have been served on 23-12-2014 and that case was not properly represented before the CIT. Consequently, assessee s uncle approached another advocate/tax consultant, who prepared the appeal papers, obtained the signature and paid the fee also of ₹ 10,000/- on 19-02-2005. However, the appeal could not be filed in time and consequently filed only on 05-10-2015 with the delay of 281 days. It was explained that the fee payable was only ₹ 500/- but paid more, the consultant was requesting the bank authorities to rectify the same and pending that they did not file the appeal. In the me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of income. He further submitted that AO in the consequential order also did not make any addition which indicates that these two issues raised by the CIT do not pertain to assessee. 7. Now, coming to the issues at item No. 2 3 are concerned, the opinion of the CIT is not correct as assessee has maintained Books of Accounts which were not rejected by the AO. What AO has done after verifying the deposits which were required to be verified under CASS, has disallowed the expenditure claimed in the Books of Accounts. Since AO accepted the Books of Accounts, estimation of income on the purchases does not arise. Consequently, the opinion of the CIT for directing to estimating the income to 5% of net purchases is only a change of opinion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur view, CIT is not correct in exercising jurisdiction on this issue. Like-wise, the examination of license fee of ₹ 38,20,875/- which was claimed in P L Account. AO examined various deposits in the bank account and corresponding withdrawals. His finding in the assessment order is as under: When asked, assessee s AR says that the cash deposits are met from the sale proceeds of IMFL and the corresponding withdrawals were also utilized for business purposes . This indicates that the expenditure claim towards IMFL is either from the sale proceeds of the IMFL or withdrawals from the bank account. It may be true that AO did not leave any notes about the examination of various items. But having completed assessment by recording ..... X X X X Extracts X X X X X X X X Extracts X X X X
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